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Post-Brexit: How to conquer all of EU and the UK with just one store
Brexit happened and the pandemic is still ongoing - but the online retail scene has been thriving as businesses have pivoted online and discovered the opportunities to scale their brands worldwide. This post is for eCommerce businesses having difficulty navigating selling outside of the UK into the EU...
For eCommerce businesses having difficulty navigating selling outside of the UK into the EU...
Brexit happened and the pandemic is still ongoing - but the online retail scene has been thriving as businesses have pivoted online and discovered the opportunities to scale their brands worldwide.
Yet, the reality of cross-border e-Commerce is a lot more complicated than just shipping a parcel across the continent, and now even more so barred by Brexit restrictions and ever-changing tax rules and legislations.
Feeling the impact, many businesses split their brands into a UK entity and an EU entity separately to mitigate the situation, and for some, gave up on trading into the EU altogether.
However, having multiple websites realistically creates more headaches and double the workload to keep the branding consistent.
But what if we told you there was a platform that allows you to run one brand across multiple countries, under one dashboard? Create unique URLs for each country but without multiple accounts and log-ins. Without the exorbitant “Enterprise” fees and excessive plug-ins just to build your dream website. Techsembly’s got your ideal solution to build multi-storefronts with different configurations all-in-one.
Seller's Biggest Headaches
As a seller in the UK, here are the top three things you need to adapt and get right per country (only treat this article as friendly guidance – for legal advice, please consult a qualified consultant for any particular matter of concern):
1. Taxes & Shipping
UK companies can no longer make use of the EU distance selling rules when shipping from the UK to the EU. Now, anything being sent outside of the UK to the EU counts as an export which means a customs declaration is now needed. Certain items may also require duties or a special license.
For the UK seller, exports to the EU are zero-rated (meaning the UK VAT at point of sale no longer applies) but instead passed onto the customer having to pay the import tax at the point of delivery. Sounds like a European thing and you’re off the hook, right? Actually no, aside from inter-country relations being tarnished from Brexit, so have many retailers and customer relationships. No shopper has enjoyed paying for the surprise duty fees when receiving their online shopping, and instead have sent back their orders, leaving courier companies facing a colossal number of returns, and retailers paying a surcharge for it all.
There are two ways to handle this situation:
Delivered Duties Unpaid (DDU)
Seller ships from the UK and let customers pay any VAT, duties and charges (often a hefty fraction of the product cost!). This has upset many customers (you wouldn’t enjoy paying for a different price you signed up for either) – causing them to send back items and demanding refunds. If you still insist on opting for this solution, best to update your shipping policy to explicitly let customers know in advance they are classified as importers and are expected to pay all import taxes and customs duties.
Postal Delivery Duties Paid (PDDP)
Seller is responsible and absorbs all import costs to prevent customers from paying any surprise fees upon arrival. This requires registering for VAT in each EU country you ship to or can pay customs agencies via shipping carriers. At the current time of writing, any goods up to a value of €150 (£135) are charged a VAT import tax which differs at the point of entry, depending on the country.
However, as of 1st July 2021, UK B2C sellers can now join the Import One Stop Shop (IOSS) scheme for low-value goods of under £135 (€150) into the EU (anything exceeding adheres to the normal import rules on VAT). This scheme streamlines the entire VAT process for UK merchants exporting to the EU, removing the need to register VAT in different countries and most importantly, be able to collect import VAT of B2C orders at the point of sale. This now means the buyer of goods are charged a final price at the time of purchase with no unexpected fees at delivery, enabling you to continue providing great customer service.
What Techsembly can do for you:
1. Set country-specific tax
If opting for the Postal Delivery Duties Paid option where the customer pays for the VAT at the point of sale, Techsembly’s dashboard allows you to manually adjust your tax rates custom to the country your consumer is in. You can also control the shipping logic, offering preferred shipping options to local customers with different shipping rates for customers to choose from. Let your customer be well informed and in charge of their shopping journey, with a seamless shopping experience no matter which country they’re shopping from and a transparent final price at checkout. Happy customer, no complications, no returns.
2. Offer multi-currencies and payments
Selling in a new market is more than just switching up the currency symbol. There is an importance and reasoning behind offering multi-currencies as customers will abandon carts due to unreliable currency conversions. Further factoring in the new import taxes into account, sellers are best to remove any currency risk by reviewing your pricing. It is inevitable to increase your costs (reasonably) now having to cover VAT and duties.
Avoid currency fluctuations and the odd cents by setting a dedicated base currency per storefront so that your pricing is not reliant on XE rates. Our multi-base currency tool instantly provides the correct currency for your customer. With multi-base currencies, you can set pricing in its local currency to ensure consistency, with the options to markup or markdown based on costs per country. You can also set custom price rounding rules and price adjustments based on specific countries and regions.
As part of post-Brexit, interchange fees will also be another levy on businesses enacted by payment companies on 15th October 2021. Visa and Mastercard will be increasing their interchange fees from 0.3% for credit cards and 0.2% for debit cards to 1.5% and 1.15% respectively. Granted, not every European consumer have the habit of using a credit card or debit card for payments, but customers should have the option of their preferred payment methods at their currency of choice. Consumers naturally feel more secure and familiar when being offered their preferred payment options. We work with Adyen, Stripe, Braintree, PayPal and many others to offer the most secure and convenient way of payment for your customers.
Since the European General Data Protection Regulation (GDPR) came to enactment in 2018, businesses have the full responsibility of protecting their customers’ data and holding a compliance strategy in adherence with the new law. Regardless of the size of the business, GDPR rules apply to anyone operating within the EU or offering goods and services to customers and businesses in the EU.
As a bitesize recap - this means proactively offering consumers the choice to opt-out of receiving marketing emails and making sure consent boxes are not automatically ticked. Businesses are to only capture essential information needed (e.g. email address), alert consumers cookies are being tracked and used and lastly for consumers to be able to easily withdraw and opt-out of any marketing materials.
Due to Brexit however, the UK's data privacy regulations are no longer covered by the GDPR. However, as of 28 June 2021, the European Commission has adopted an adequacy decision for the UK, recognising the UK’s data protection regime as on par with the level of data protection within the EU. This new adequacy decision permits cross-border data transfer outside of the EU, and vice versa, uptil 27 June, 2025. The European Commission now recognises the UK's data protection regime as “UK GDPR” where it shares the same values as the EU GDPR but with its own independent framework under review. This is particularly aimed at UK businesses who receive data from, or have establishments in the EU and European Economic Area (EEA). For companies looking to operate inside of the UK would in turn need to comply with the UK’s Data Protection Act 2018 (DPA 2018) though it generally shares the core values of the data protection principles, rights and obligations.
As Techsembly already hosts in many different regions with its multi-shopfront feature, you can apply different privacy policies set by region but also available to customise by storefront locations to ensure compliance has been met.
There may be a lot of changes since Brexit, but don’t let that bar you from expanding into the EU. Duplicating one site may seem manageable, but to scale across the whole of Europe, you will need an eCommerce platform like Techsembly. We support multi-shopfronts, languages, currencies and most importantly, the ability to localise each storefront to their country with full visibility of all sites down to the granular level of product analytics with a decentralised management system for regional colleagues and third-party vendors to contribute. Whether you’re looking for a total brand refresh or you’d like to keep your front-end design, our Headless eCommerce API will ensure everything looks the same while we power the backend with all the solutions you need.
We’re also happy to open a conversation for any eCommerce Brexit transition queries to help you navigate through unprecedented times. Let us share with you the right tools and techniques to successfully launch a brand abroad, and be mindful of any cultural missteps and legal requirements to pay attention to. Contact our team for your first consultation call on how to run EU from home, all within one dashboard.