James Khoury, CEO of Zendbox, explores the challenges facing UK online sellers selling into Europe after Brexit.
Whilst grappling with a challenging peak and the lingering impact of Covid, online retailers based in the UK with an extensive European presence need to think carefully about how they will keep shipping to their customers in the EU.
One of the biggest operational issues affecting many online sellers is their current use of Amazon’s fulfilment service, FBA and its European Distribution Network (EDN) to store and send products across Europe.
Amazon is stopping this service and for many that means effectively closing the doors to European custom come January.
Therefore, this leaves three options to sell into Europe from the UK come January:
1 – Keep stock in the UK and risk shipping to Europe slowly and expensively
2 – Open your own warehouse in Europe to serve your European customers
3 – Find a fulfilment service that will store and distribute in Europe for you
Whichever option you take, you will still need to make sure your business is set up to legally trade in Europe. Although some things still remain unclear, to get the best indication of what you need to prepare for, visiting the government Brexit transition page is a good starting point.
It will guide you through a short questionnaire on how you currently operate and then produce an extensive checklist for you to complete. The list typically includes items such as applying for registrations, making sure you are compliant with regulations and importantly, that you have the correct codes and data to ensure your goods pass through the border without delay.
Missing or incomplete data will likely be the main cause of delays at the border. This will not only result in delayed shipments but more than likely heavy fines too.
Delays will be caused by:
- Incomplete or vague contents descriptions
- Licences or other paperwork related to the import of that specific item
- Missing and incorrect HS 6 codes – this is the World Customs Organisation Harmonised System that uses code numbers to define products. Shipments will be refused by shipping providers without this information
- Incomplete shipper and consignee data (including addresses, collection and importer details)
- Unrealistic valuation of contents – leading to tax and duty disputes. Values should represent the actual transaction value where possible
- Missing Country of Origin (COO) – as this could also affect tax
- Denied Parties (DPs)
There are also many operational areas to consider while planning for January and aligning with partners in your supply chain is strongly recommended. Whether suppliers are more or less prepared than you, having some knowledge of the set-up will give you a head start on planning alternatives if needed.
Sharing information and data on past stock quantities, sales frequencies and sales cycles may also prove invaluable for planning. If you plan to, or already work with an ecommerce fulfilment provider such as Zendbox, aligning with them on product data needs to happen sooner rather than later.
A recent McKinsey report said: “All consumer packaged goods companies should deepen their relationships with third-party e-commerce partners and work with them in new ways, such as category captaincy, deeper data exchange, or shared warehousing. At the same time, avoid overreliance on the e-marketplace giants—strengthen your relationships with second-tier e-tailers and owned e-commerce (such as DTC websites, owned marketplaces or ecosystems, or partnerships in which you control your brand presence and own the consumer relationships and data.)”
Shipping processes are also of paramount importance as you might need to consider requesting services in advance so that your providers will be able to accommodate you. In anticipation of increased demand, carriers are already implementing their own contingency plans in order to protect their service levels. This is where using a third party fulfilment service with a base in Europe could save you the resources of dealing with this, and would ensure your customers across the border receive the same services they know and expect.
In summary, ecommerce businesses facing Brexit should prepare in three ways;
- Know what you must do to trade legally, apply for any new registrations and make sure you comply with regulations
- Know your supply chain inside out, and leverage any existing data and technology to plan ahead. Use the opportunity to create more accurate and efficient processes in your business.
- Consider an ecommerce fulfilment provider that is set up to help you in either side of the border.
The key thing to do is to act now to prepare for Brexit before you experience delays later.