Two years after the United Kingdom (UK) officially left the European Union (EU) businesses are still hitting speed bump after bump, with no relief in sight. Merchants have been scrambling to pick up the pieces following what has been called the “historic UK-EU divorce”.
This friction has led to falling revenues, additional tax and supply chain disruptions. It has also created new demands. Huboo’s co-founder and CEO, Martin Bysh, said Brexit continues to create challenges for ecommerce clients in the UK trying to ship products within the European Union.
“If you’re shipping items over a certain price you/ have to pay value added tax (VAT),” he said. “That can result in someone receiving a gift in Europe and then being asked to pay VAT on it, which is obviously not the way to build a business, Bysh explained in an interview with PYMNTS.
So, how are some businesses successfully cutting through the red tape to still expand and remain competitive in the domestic market? For those hoping to sell in Europe from the UK, Bush recommends shipping pallets directly to the country and to sell domestically.
“If you want to compete on an equal footing with domestic sellers, you can’t be shipping from miles away because it adds cost to the shipping process which you have to pass onto the client. It [also] adds two- or three-days shipping delay as compared to buying it from someone in the domestic market,” he says.
Riding the Wave: Ecommerce Boom
Since the pandemic, 90% of the UK’s population has been plugged into the online shopping trend. This has opened up massive opportunities for ecommerce fulfillment companies. These businesses store all their inventory they have for a client at the pick up phase. According to data from Amazon, that translates to about 10 miles a day for pickers.
Recently implemented time management techniques are intended to reduce the walking distance involved down to around half a mile, all without having to invest in extremely expensive automation. The new approaches have been incredibly helpful during lockdown periods when it was difficult to keep operations going and support couriers.
And the future? Bysh is hopeful that fulfillment centers will continue to evolve into something greater, like a one-stop shop for D2C brands. This would ultimately centralize all the tools needed to run ecommerce businesses under the circumstances merchants operate in today.
Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of pos uk. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice-cream on his backyard porch, as should all right-thinking people.