How Will Brexit Affect My Fulfilment And International Deliveries?
On a traditionally rainy day in June 2016, the UK astonished the world by voting to leave the EU. Since then, Brexit has been a topic of hot debate, only fizzling out this year in favour of a more pressing (and infectious) issue.
However, with Boris' Internal Market Bill clearing the first hurdle, Amazon FBA making a shocking Brexit announcement, and January falling closer and closer, Brexit is once again dominating conversations. Especially for online sellers.
Whatever happens between now and 1 January 2021, Brexit will affect your eCommerce fulfilment and international deliveries. How much? eCommerce fulfilment experts Huboo are here to tell you.
Brexit & eCommerce - what do we know so far?
Brexit officially happened on 1 January 2020. However, both the UK and EU have until 31 January 2021 to figure out the rules of their new relationship; rules including trade.
Trade negotiations are ongoing, with Boris Johnson aiming for completion by 15 October at the latest. If no trade deal is reached by the end of the year, the UK automatically drops out of the single market and customs union.
Recap: The single market means that all EU countries share the same rules on product standards and access to services. The customs union removes any taxes or tariffs on each other's goods.
For eCommerce sellers, this means if we don't reach an agreement, World Trade Organization rules, tariffs and border checks apply to goods sent to the EU - and may apply in reverse too. Even if we reach a deal, there will likely still be checks and tariffs in place.
How will Brexit affect your fulfilment operations?
While we don't know exactly how Brexit will impact eCommerce sellers in the UK, we do know that it will affect your fulfilment operations in three key areas.
Supply chain issues
International supply chains will suffer delays, increased costs and interruptions, as early as this month. Businesses are stockpiling products in readiness for Brexit and a second wave of the pandemic - placing a strain on already weak supply chains. Experts predict that 2020 will be full of border hold-ups too, as agents and sellers get used to the new rules.
If you source products internationally, this could affect your ability to stock enough products to meet consumer demand. Even if you don't source internationally, these delays could affect the availability of packaging materials, fulfilment equipment and other resources you rely on.
The proposed Australian-style immigration points system will have severe consequences for the logistics sector, where low-skilled EU workers represent 13% of the workforce.
It will be more challenging to obtain warehouse and operational staff in the future, especially during busy periods such as the holiday season.
On the plus side, industry experts expect UK eCommerce to boom following Brexit. Many EU companies will leave the UK, decreasing competition; more people will shop nationally, creating more demand; and new trade deals with other countries (such as Japan) will widen your audience.
However, this increased demand places more pressure on your fulfilment - especially as UK shoppers now expect free and fast delivery as standard.
How will Brexit affect your international deliveries?
Huboo spoke with the DIT (Department of International Trade) recently on How to manage your international deliveries and avoid disruption. If you sell products internationally, your deliveries will face the following hurdles next year:
Orders leaving the UK will be subject to full-border checks, which naturally take more time and lengthen your international delivery speeds. Additionally, you must complete the necessary paperwork and tax calculations, which will take your fulfilment team more time too. Failure to comply will be costly and result in an unfulfilled order.
Duties and taxes
It's likely to cost more to ship products into the EU. While we hope this isn't the case, HMRC has already announced the abolishment of Low-Value Consignment Relief for consignments until £15. More duties and taxes equal higher shipping costs for you or your EU customers.
Finally, Amazon FBA recently shocked users by announcing that from 1 January 2021, all "pan-European FBA inventory transfers will stop between the UK and EU". This means that FBA will not transfer your stock into its EU warehouses or ship products from the UK to EU customers. A big problem for FBA users.
How to prepare your eCommerce business for Brexit
But enough of what's going to happen - let's talk about what you can do about it.
1. Start preparing now
First and foremost, start preparing now. You're going to be busy with Christmas shortly, so use this time to analyse your risk and put plans in motion.
2. Mitigate your risks
Once you identify the critical Brexit risks to your online business, start mitigating them. For example, if your supply chain is international, diversify it by using suppliers based in different countries with different supply routes.
3. Increase your capacity
If the thought of a boom in UK orders fills you with both delight and fear, speak with an outsourced multi-channel fulfilment service about how they can help. Whether you're concerned about capacity, labour availability, resources or fast shipping speeds, they are best placed to advise and help.
4. Involve a UK-EU fulfilment partner
Following Amazon's announcement, it's a good idea to involve a UK-EU fulfilment partner if you sell within the EU. They can aid EU deliveries, either using international shipping carriers or splitting your stock across their UK and EU warehouses.
Teaser: watch our eCommerce blog for a relevant upcoming Huboo announcement.
5. Build up your UK business
Take advantage of the growth in UK sales by growing the UK side of your business. You can do this using UK-based marketplaces - such as OnBuy.com, who've seen an incredible 24,000% growth in just four years - and increasing your national delivery speeds to next-day delivery.
6. Stay up to date
Finally, keep up to date by following eCommerce blogs and news sites for the latest on Brexit and the impact on your eCommerce success.
The future may be uncertain, but we're in this together, and we're here to help each other succeed.
Founded in 2017 by Martin Bysh and Paul Dodd, Huboo is an eCommerce fulfilment partner for UK sellers wanting fast, reliable and cost-effective fulfilment in the UK and EU.
Our technology integrates with popular sales channels and marketplaces, and our one-stop dashboard makes it easy for you to oversee orders, inventory and deliveries.
To find out how Huboo can help you following Brexit, visit our website.
Modified on 2023-04-02