Can Brexit impact my U.K.-based ecommerce enterprise?

To read the papers and listen to the tv commentators, some would believe the surprise vote at the U.K. to leave the E.U. is a tragedy, to change everything. This is an exaggeration.

The U.K. won’t leave the E.U. until, at least, two years. There’ll be a good deal of noise and bluster till afterward. U.K. politicians and E.U. officials will create all sort of threats and counter threats. Uncertainty will continue. The markets will fluctuate as a few will make a killing from this and others will lose. But the laws won’t change for at least two decades. It’s as easy today to export and import from the U.K. as it had been before the vote.

The actual question, for me, is how will Brexit — the”British exit” in the E.U. — impact my ecommerce company here in England? What plans if I make to grow and survive?

Ecommerce businesses typically operate globally. All such businesses, no matter their location, will be probably influenced — some more than others. Since I’m U.K. based, a substantial amount of my earnings are from the U.K., in British pounds. I also sell to clients in Europe in euros and to the rest of the world (mainly the U.S.) in dollars. Dollars are looking good to me at the moment as I can swap them for comparatively more British pounds, as a result of its fallout from Brexit.

I’ve revised my earnings forecasts and thus my buying budgets. I’m assuming a drop in earnings to U.K. buyers, as uncertainty will inevitably reduce customer confidence. I’m also assuming an increase in U.S. and E.U. earnings because I will lower my prices as a result of fall in the pound. I get more for my goods once I sell in dollars or euros. My U.S. and E.U. opponents don’t enjoy this economies and are hit when selling to U.K. clients.

Therefore, for the short term, it’s business as usual whilst being careful to track prices and my opponents.

I also have considered my suppliers. They are bigger companies, exporting and importing heavily. Brexit may negatively impact them.

1 major U.K.-based provider has a E.U.-wide distribution permit for a favorite U.S. manufacturer. This provider also includes a U.S. and E.U. distribution permit for a U.K. producer’s products. Brexit will probably hurt this supplier. The U.S. producer’s goods could, finally, have trade restrictions to export into the U.K., and the U.K. producer’s goods may have different limitations to export to both the U.S. and the E.U.. The provider could have to do fulfill regulations and limitations for each country, where previously it could freely sell products in the E.U. and fulfill restrictions only for exporting and importing in the U.S.. The supplier’s costs will increase and its freedom to move goods around will be limited. I intend to reduce my reliance on this provider.

Luckily most of my other providers distribute only in the U.K.. So they’ll be largely unaffected by changes to international trade legislation.

My one remaining potential difficulty supplier is a German distributor with E.U.-wide rights. It’s possible this supplier won’t retain the right to market in the U.K., or it may have added costs to market to me. I will therefore have to monitor the discussions and change my business model so that in two years I could shed the supplier free of loss. This, incidentally, is a shame as the organization is quite good to us. Before I do anything that I will certainly visit with the corporation’s staff, as they might well have programs that could help.

Generally speaking, however, I’m lucky. All my providers are in pounds and all of my costs are in pounds. I am not going to be directly influenced by the currency changes. It’s very likely that many of my providers will be buying products in dollars, but this should represent a lower percentage in my retail earnings.

For me personally, being based in England, selling products within the U.K. will be unchanged. For U.S. retailers, however, it will become more difficult to sell in the U.K. once we depart the E.U.. It’s too early to state. It’s definitely not the time for to plan expanded sales in the U.K.

I plan to expand my earnings from the U.S. and Canada, but not invest too much into E.U. sales. There’ll probably be an element of bias against U.K. retailers in the E.U. nations as we’ve disrupted their system. That could help U.S. retailers that sell in the E.U.

So on balance, as a U.K.-based company, if I do not panic and should I aim carefully, Brexit could really benefit my company by making it more economical to sell beyond the U.K. and the E.U.

Regardless, Brexit is a remarkably stupid move.