Can your e-commerce fulfilment partner deliver for you after Brexit?
Diego Lijtmaer the co-founder of Bezos.ai, discusses imminent European expansion and the Brexit challenges we solve for e-commerce SMEs.
It’s less than a month until the UK’s transition out of the EU. The complications this creates for e-commerce businesses on both sides of the Channel are vast. Currently our e-commerce sellers ship an average of 30% of their orders to the EU, so we are working closely with them to be prepared for the changes that are coming
- “What are the tax implications?”
- “Should I consider splitting my stock in two locations (UK and EU)?”
- “What extra documentation will be required?”
These are a few of the recurring questions from the e-commerce sellers my team have been providing support and solutions to this year [Update: 09/02/21, download our full guide to post-Brexit eCommerce here. Our European expansion is part of our goal to provide more value to e-commerce sellers whilst addressing the issues posed by Brexit. Our first European warehouse in Germany is scheduled for Q1 of 2021, this will be followed by a further expansion to the US in Q2.
Our global network will provide e-commerce sellers with a single fulfilment solution to simplify their domestic and international logistics. Unified data analytics from multiple integrated sales channels and an international network of warehouses will ensure sellers' stock is kept as close to the consumer as possible, allowing for faster and cheaper shipping options.
Taxation on goods in and out, plus increased courier costs
Many e-commerce sellers in the UK and Europe utilise the EU customs union to source and sell goods, without paying import or export taxes. But soon this won’t be the case.
Thousands of e-commerce sellers will need to pay import taxes on goods arriving in the UK from the EU, and then export taxes to sell those goods back to the EU from the UK. This will result in double taxation for these e-commerce sellers.
The actual cost of shipping goods will rise, and couriers have started issuing notices of increased shipping costs from the UK to the EU and vice versa. This will further squeeze margins for e-commerce sellers who ship across the Channel, and drive the need for strategic fulfilment locations to store stock based on insights from data.
This is why we are expanding into Europe to offer a solution to this problem for e-commerce sellers. If they source from the EU they will be able to send stock to our European fulfilment centres directly from their suppliers. This will save them from double taxation and additional shipping costs.
Splitting stock between UK and EU fulfilment partners will become the norm
Amazon, which many e-commerce sellers rely on for both selling and fulfilment (FBA), have already told their UK and EU sellers that they will no longer transfer their goods across the Channel for them. Sellers on both sides of the Channel will effectively need to split their stock and send themselves to separate Amazon fulfilment centres.
“To mitigate the impact of these changes, you should consider splitting your inventory and sending it to a fulfilment centre in the UK and the EU, so that you have sufficient stock-either side of the new customs border” - Amazon. (Stevens)
Shipping stock themselves to separate fulfilment centres will increase costs for UK and EU sellers and they’ll need to evaluate their position in each market to check the margins are still there. If e-commerce sellers decide to do it themselves they will need to correctly split their stock to ensure they are meeting the demand for their goods in each market.
Our platform helps e-commerce sellers by offering insight into which SKUs need to be based in certain fulfilment centres to maximise profit margins. Our expansion into the EU will reduce costs for them, as we will be able to aggregate volume from all our sellers to our EU fulfilment centres.
E-commerce sellers will need to do more documentation and processes
At this moment the future relationship between the UK and EU is still to be confirmed, but Brexit will increase documentation and processes for e-commerce sellers importing and exporting goods between the EU and UK. This will be a huge change for e-commerce sellers who currently are used to minimal documentation and processes.
For goods imported from the EU, UK e-commerce sellers will need to declare all imports and extra documentation will be required for custom declaration checks. Further documentation related to VAT, safety and security and certain types of goods will also be required.
For goods exported to the EU, UK e-commerce sellers will need to prepare documentation for export declaration checks and clearances. Extra documentation will be required such as certificates for certain goods, transport documentation and commercial invoices.
Imports and exports will take longer due to additional checks, so it will be vital that all this documentation is correct to ensure the timely delivery of goods.
Once the agreement between the UK and EU is confirmed, Bezos.ai will have a deep understanding of what is required, and combined with our experience and expertise we will provide even more support and guidance to our e-commerce sellers. By partnering with us we can manage the documentation and processes on your behalf, and our EU expansion will help reduce these further as e-commerce sellers can ship goods directly to one of our fulfilment centres.
Picking the right e-commerce fulfilment partner will be critical
From the 1st of January 2021, it will become much more complicated to source and sell goods between the UK and the EU. For e-commerce sellers, it will be critical that their fulfilment partner can help them mitigate the costs and complications associated with Brexit and provide solutions to maximise profits.
We are confident that our platform and imminent EU expansion will help e-commerce sellers navigate and overcome the challenges posed by Brexit. Our solution will provide relief to potential double taxation, give insights into how sellers should split their stock, and reduce documentation and processes. Saving them time and money, so they can focus on growing their business.