How you can take advantage of Brexit to boost sales
How you can take advantage of Brexit to boost sales and delight customers
The eCommerce industry experienced a huge surge of growth in 2020 as online shopping became the new normal, largely due to the global pandemic forcing the adoption of eCommerce and a shift in buying habits from physical to digital stores.
The pandemic not only caused a boom in online sales but hampered the abilities of supply chain networks. This caused a host of problems with the quantity of trade exceeding the networks’ capacities. These issues coincided with the completion of the UK’s transition out of the EU leading to further chaos in the eCommerce world, you can read more about this here.
We believe that this presents a prime opportunity for e-commerce sellers that can navigate the present challenges to become market leaders. Many of the previously well-established brands have been left offering poor or non-existent cross-border sales. The e-commerce brands that act quickly to offer their products globally with a premium customer experience have a massive opportunity for growth.
Are you taking full advantage of the internet to sell globally? Borderless e-commerce presents an incredible opportunity for long-term growth, giving you access to the entire market for your products. But while this sounds great, putting it into practice can be challenging that’s why we have created a post Brexit e-commerce manual, click here to get a free copy.
The important part of e-commerce is delighting your customers. You know how important repeat customers are for your business, from word of mouth marketing to higher basket values. 25% to 40% of the total profits for most businesses originate from returning customers according to SumAll.
The changes introduced by Brexit have resulted in many customers, ordering from sellers on the other side of the UK - EU border, facing shipping delays and being lumped with unexpected VAT and customs duty charges. This has damaged the reputations of these sellers and put off customers from returning. To understand how to provide the best experience for your customers you will first need to understand the primary delivery options.
Delivery Duty Unpaid (DDU)
In this option, the seller arranges delivery and export of an order with a parcel carrier, but the customer is responsible for import.
When the order reaches the customs border, the customer will be contacted to pay any import duty and taxes which may include additional costs such as customs storage fees. Once the customer pays the charge the order will be delivered by the parcel carrier. If the customer refuses to pay, the order will be returned to the sender. As the customer acts as the Importer of Record (IOR), the seller does not require EORI or VAT registration in the destination country.
Delivery Duty Paid (DDP)
In this option, the seller arranges delivery with a parcel carrier and acts as both the exporter and importer, thus the seller usually requires an EORI and VAT registration for the destination country. They are also liable for any import duty and taxes incurred.
Once the order reaches customs the parcel carrier will pay any import charges to ensure a swift process, then invoice the seller for these charges and deliver the order to the customer.
What's best for your customers
The best option is to hold stock in both the UK and EU thereby eliminating the need for orders to cross customs borders. These orders can then be sent to customers without facing any customs charges or complications. Ensuring your customers get fast delivery without surprise costs.
To learn more about the requirements for all the shipping options, and use our easy to understand tables and flowcharts to see which one is best for you, you can download our full Brexit guide for free here. If you want to find out how we can get your European fulfilment sorted click here.
Optimising the experience
To create a great customer experience that instils loyalty, we recommend focusing on transparency. Unexpected fees at checkout are regularly cited in the top 5 reasons for cart abandonment, as a result, the earlier you can inform your customers about the import fees the better.
It is essential to at the very least clearly explain the import duty, VAT and other customs charges as early as possible at checkout. For DDU this will be informing the customer that the charges are not included and will be charged by customs before delivery, in this instance it is best practice to provide an estimate of how much this will cost the customer. For DDP this will be informing the customer that the import costs will be added to the cost of shipping.
The fees are challenging to work out and depend on the type of products, value and destination country. Luckily most e-commerce platforms have a way to provide estimates or to add the VAT and customs duty to the checkout. For example, on Shopify, there are third-party apps such as ‘Zonos Duty and Tax’ or ‘Easyship’ to do this for you.
Different brands have seen success with sales and long term customer retention by highlighting the additional charges at the start of the checkout process, or by providing an estimate under the price on each product page. We recommend testing how and when you inform your customers to see which option performs the best for you.
Post-Brexit fulfilment can seem challenging but getting it right will help your long term growth. Look at Brexit as an opportunity to outperform your competitors. To get to grips with UK - EU fulfilment and vice versa download our full guide for free here, or to learn more about how we can help to get your fulfilment sorted click here.