U.K. merchant on likely impact of Brexit

Brexit is not that complex for the ordinary ecommerce retailer.

Large companies and providers that import goods may be affected by increases in tariffs. There might be delays in getting the goods. But this shouldn’t affect small to midsize merchants. And the majority of the problems will probably occur between the U.K. and mainland Europe.

If you’re located outside of the E.U. — in the U.S., for example — then sending to E.U. nations will remain unchanged. Additionally it is probable that sending to customers in the U.K. will stay unchanged. The customs declaration are the same following Brexit. It’s possible that shipping to the U.K. will take somewhat longer. Likewise, it’s possible your U.K. client might have to pay a new import duty. And it is possible the value-added-tax exclusion on low-cost items will no longer apply.

If you’re located outside of the E.U. — in the U.S., for example — then sending to E.U. nations will remain unchanged.

All these possibilities, if accomplished, are your clients’ problem if you don’t pay all import duties, which I don’t recommend. (If a U.K.-based customer fails, point out that Brexit is the cause.)

For U.K.-based merchants, it’s unlikely that the products which you can and can’t import will alter in the short term. Any change will be years down the road. Likewise, the U.K. will probably keep the exact criteria and testing regimes as the E.U. and will, likewise, continue to recognize equivalent U.S. criteria.

Product territories?

What could happen is that producers and vendors are no longer restricted by the U.K. and E.U. belonging to one sector. This may prompt producers and distributors to make territory licenses and constraints as to who can sell in the U.K. and the E.U.. This is presently illegal because of the Treaty of Lisbon.

This change could change the revenue terms that ecommerce retailers get from providers. Presumably, this wouldn’t happen without warning — until Brexit is verified and enacted. (A provider or manufacturer that intends to do this will probably keep it a secret until then.)

In the best case scenario, even merchants that ship between the U.K. and the E.U. will see no change — no customs forms, no change in allowable goods, and no change in standards, quality evaluations, and security certificates. In the worst case, however, it’ll be similar to the way U.K. merchants send parcels beyond the E.U. — fill in customs declarations and export certificates (as you do now) for many countries.

Value-added tax

The big distinction is value-added tax. Currently, if an E.U.-based company sells to a E.U.-based customer , the company must collect VAT. The U.K. is currently in the E.U.

If the U.K. leaves the E.U. with no deal, then E.U. and U.K. company no longer need to collect VAT for sales to customers in each locale. (as an instance, retailers in France selling into the U.K. customers would no longer collect VAT, nor would retailers in the U.K. selling to customers in France.) Therefore, corresponding prices would presumably be reduced. The customer may nevertheless be charged VAT on the purpose of import, but it would be levied from the importer rather than the merchant.

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All This could slow down postage for imports between the U.K. and the E.U., after Brexit. It will probably annoy those customers.

Thus in the event you ship internationally, Brexit will probably mean doing more of what you do. If your fulfillment program selects and matches in the applicable forms and labels based on the delivery location, then it will need to be updated to move the U.K. from the E.U. bubble.

Sales impact

One last consideration is projected earnings. It’s possible that poor feelings may develop over Brexit. Consumer demand may dip for goods marketed between the U.K. and the E.U. Scare stories in the media can cause U.K. and E.U. consumers to buy locally rather than internationally. So there is an chance to pick up national sales from loyal consumers.

However, the only certainty with Brexit is its instability. And doubt impacts consumer confidence and so reduces sales.

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