ECommerce Sellers, The Brexit Clock’s Ticking – Act Now To Protect Your Business
On the 1 January 2021, when the Brexit transition period ends, shipping products to customers in the European Union (EU) will get a whole lot more complicated for online retailers. The UK will become what is called a ‘third country’ for the purpose of trade with the EU and all businesses, especially eCommerce businesses, will need to adapt to the new commercial environment.
The coming changes are big, they’re complicated, they’ll take longer than you think to address and all of this will coincide with the Christmas peak sales rush. The clock is running down fast, so to protect your business, if you haven’t already started, you need to prioritise preparing for these changes now.
Progress on a trade agreement stalled months ago after the Internal Market bill which deliberately breaks the Withdrawal Agreement the UK government signed with the EU last January, was introduced in Parliament and now with England once again under a COVID-19 lockdown, the chances of a deal being concluded in time for 1 January 2021 seem remote.
In the absence of a trade deal, the starting point for preparations is trading on World Trade Organization (WTO) terms which means there will be customs formalities at the border, additional paperwork to process and tariffs to pay and that’s just for starters.
If that’s not daunting enough, there’s much more to consider. When the transition period ends on 31 December 2020, the UK and EU legal systems will become entirely separate. Without a trade deal to replace the current arrangements, this means that mutual recognition of things like technical assessments of product standards, or product labelling agreements will end. The onus will be on you as the e-Seller to check every regulation around your business and the products you sell to find out whether you need separate licences or certificates for the EU market. You will also need to understand the local rules in each EU country.
The most common things you will need to consider in your continuity plans are:
- Supply chain/partners
- Licenses and qualifications
Start with your supply chain
In our experience, the best place for you to start is looking at your end-to-end supply chain. Consider each of your products (or services) and ask yourself either who handles it, or who adds value to it each step of the way. Most large organisations that you deal with - marketplaces, banks, or shipping services for instance - will already have prepared and will be able to support you. Visit their websites, contact your account managers, watch for any information they send you and draw heavily from the guidance they offer.
If you have any small or medium sized organisations in your supply chain, perhaps a niche local labelling or packaging supplier, you will need to find out if they have audited their own supply chains to ensure they’re robust enough too.
Consider the import/export flow of your goods
You’ll need to onboard with a customs broker and shipper able to ship your goods to the EU. Amongst other requirements, you will require both UK and EU EORI - Economic Operator Registration and Identification (issued by your tax office), a clear understanding of your HS codes (8-digit commodity codes) and compliance with EU product rules.
Take a look at your team
This is an important step, particularly for INCOTERMS (International Terms and Conditions of Service). Also review regulations that might affect your company (such as business, consumer, information security and intellectual property rights such as trademarks), sector specific regulations, financial and other regulations.
Obtain necessary product certifications, licenses and/or permissions from relevant Intellectual Property owners. Ensure you have proof of your official business/seller names, business registration documents, photo identification to hand (this task will also help with your discussion with customs brokers).
Review your contracts
If you employ EU nationals or plan to before the end of 2020, have you supported your employees and their requirements for any work permits or visas? Be sure to differentiate between those EU nationals already in the UK versus those EU nationals planning to arrive in the UK.
With so little time left, every day counts and if you want to continue selling your products to EU countries, this really can’t wait any longer.
For over 6 years SellerHelp.net has been selling online, racking up over 100,000 orders a year, with 60% of our business in the UK and 30% in the EU (and the balance, elsewhere). Our consultancy arm, ResilienceHelp.com, won a public tender to deliver Brexit readiness training on behalf of the Mayor of London to 1,500 of London’s Small and Medium Sized Enterprises (SMEs). Each of our principals has around 25 years of domain experience in e-commerce, UK-EU research and small business advisory, data privacy and Enterprise strategy.