With all coverage surrounding Covid-19 this year, Brexit has been somewhat overshadowed in the media. But with just over one month to go, and still no deal in sight, it’s a topic which remains high on the agenda for many businesses.
The United Kingdom officially left the European Union on January 31st of this year. However, an additional 11 month transition period was granted to allow businesses time to prepare for the subsequent changes affecting trade between the UK and the EU. As a result, international trade talks which were intended to resolve outstanding issues have yet to reach a conclusion.
What happens if no agreement is reached?
As the deadline looms, it’s becoming increasingly unlikely that an agreement will be reached. Should discussions result in a ‘No Deal’ Brexit, all trade between the UK and the EU will take place under World Trade Organisation rules. This means tariffs for most goods, at least until a trade deal is reached.
While terms had originally been agreed regarding Northern Ireland, they may not survive a No Deal outcome. Under a No Deal, it’s likely that trade between Northern Ireland and the Republic of Ireland will be subject to the same terms as trade between the mainland UK and the EU.
While trade talks continue, Government advice today is that UK businesses should prepare for a No Deal Brexit.
Brexit and E-commerce
One of the biggest implications of a No Deal scenario for E-Commerce is the scope of the EU E-Commerce Directive which applies to all EU countries, Iceland, Norway and Liechtenstein; from January 1st 2021 the directive will no longer apply in the UK. From this date onwards, any British company operating within the geographical boundaries of the E-Commerce Directive will need to comply individually with the relevant legislation in each country in which it operates.
The primary changes which come into play for traders post January 1st include:
- Increased costs due to tariffs and more complex operational arrangements
- Longer shipping times due to border checks and customs clearance
To find out more about these changes, the UK Government has prepared a guidance document which can be accessed here.
What is the impact on Amazon FBA?
Earlier this year, Amazon announced sweeping changes to its UK FBA operations which coincide with ‘Brexit Day’ on January 1st 2021. The changes mean that FBA sellers will no longer be able to fulfil every European sale from a British warehouse.
What’s more, they will no longer be able to transfer inventory across EU borders either. The only solution will be to ship inventory to an EU country for Amazon distribution to fulfil from there. In addition to this, sellers will no longer be able to sell across the five EU marketplaces under a single UK VAT number. In fact, VAT numbers will be required for each country where sellers store goods.
Whilst SKUs remain unchanged, multi-country inventories must be switched on in order to ship FBA stock to Amazon fulfilment centres within the various EU countries.
For further information, visit the ‘Prepare your Amazon Businesses Brexit’ help page, accessible via your Amazon Seller Central account.
How can E-Commerce Retailers prepare?
Whatever your business plans post Brexit, there are some fundamental actions which you can take in preparation for whatever may come:
- Ensure your policies are up to date:
- Returns and refunds
- Brush up on taxes, duties and other legislation:
- Prepare and move your inventory now to avoid delays later on.
- If you intend to continue to sell into the EU, you should consider moving inventory before the deadline to avoid delays in January.
- If you’re an FBA seller, switch on the Multi Country Inventory option now
- Check your delivery options.
- Will they be fit for purpose after Brexit?
- Also consider shipping aggregators
- Evaluate your suppliers.
- If your suppliers are in the EU, you may face delays in receiving stock after January 1st; you may wish to seek alternatives now.
- Keep an eye on the latest developments in the trade talks.
How can Cloud Commerce Pro help you to manage your business after Brexit?
Cloud Commerce Pro’s all-in-one business management software is a complete multi-channel e-commerce solution. It’s not off-the-shelf software – we build it around your business.
To find out if your current solution will support your business through Brexit and beyond, ask yourself the following questions:
Can you manage orders from any country in one centralised system?
Does your system integrate with your chosen carriers? Also, do it automate shipping rules to select the best shipping options by product, destination or other criteria?
Will it automatically create shipping labels, picking lists and packing slips and invoices?
Do you centralise your for all channels and marketplaces? Also, provide stock alerts and automatically create Purchase Orders for replenishment?
Does your current system track customers and conversations in one place?
Can you centrally manage your returns?
Does your system provide complete billing management?
Can you supply wholesale as well as retail through one system?
In summary, the good news is that Cloud Commerce Pro can do all of these things. That is, we bring every element of your e-commerce business together into one system.
If you’d like to find out more, or for a live demo of the system, give us a call on 01524 230 252 or contact us here.