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Logistics and delivery second biggest cost faced by UK SME online retailers

Logistics and delivery is the second biggest cost that UK SME online retailers face, according to new research for the Royal Mail. It showed that 32% of retailers expected logistics and delivery to be their biggest cost this year. 34% expected purchasing to be their biggest cost and 27% said advertising.

69% of SME retailers expect costs to be higher this year. Despite growing costs however it seems UK SME retailers are confident for the year. 70% of retailers experienced an uplift in sales in 2017 compared to the previous year and 74% said they were confident of further increases during 2018.

The study also found 68% of UK SME online retailers currently sell overseas. 80% of these retailers sell to Europe, followed by USA (35%), Canada (31%) and Asia (17%). In the fashion sector, 88% sell to Europe, 53% to USA, 28% to Canada, and 25% to Asia. 78% in the electronics sector sell internationally, followed by 72% of health and beauty and 67% of fashion retailers.

USA is the country where retailers sell the most to, followed by France and Germany. The most popular European destinations to sell to are France, Germany and Spain.

In 2018, 64% of UK SME online retailers want to increase international sales with simplifying the sales/ordering/delivery and payment process (45%) the key way such retailers hope to do it. 

Nick Landon, managing director of Royal Mail Parcels, said: “It’s great to see the level of business confidence from UK SME online retailers at the start of 2018. Although obvious challenges exist, retailers are grasping the available opportunities for growth and have a clear view of the actions they need to take to win new customers at home and abroad.”

UK SME online retailers are planning to target Europe (50%), USA (34%) and Canada (28%) in 2018 due to demand, good ecommerce structure and the ease of shipping and delivery. Europe holds the greatest opportunity, according to UK SME online retailers.

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