BREXIT and eCommerce - Access to the Digital Single Market got a lot harder and more expensive

The UK leads eCommerce exports, in 2013 UK companies exported products direct to consumers in the USA and the EU. In both cases roughly $1.1Bn worth of products. There is no FTA with the USA and UK companies export their successfully though there are barriers.

Those barriers don't exist on EU sales, though BREXIT will bring them back, but just for UK businesses. Fashion drives sales from the UK but other areas such as musical instruments and sports and leisure, are also strong. 

The EU Digital Single Market strategy is working on a number of initiatives, in areas such as reducing VAT burdens and developing cross-border enforcement of consumer rights. 

So what will BREXIT mean for UK businesses? Well for those just selling within the UK these will not make any difference. UK VAT and consumer law may be modified post-BREXIT and UK companies will have to work to those standards.

For those large eCommerce businesses selling cross-border, most of them will already be registered for VAT in EU countries. If they want to continue to sell, then they may still need to meet existing and new EU VAT and consumer laws. 

The real complication, though, is the UK will be outside of the EU VAT scheme. So goods coming from the UK will go through the non-EU channel processing and import VAT (and duties) as below. This incentivises UK businesses selling into the EU to move their warehouses within the EU to avoid this problem. 

Note that there is no post-BREXIT model that supports VAT on cross-border eCommerce sales, Norway, Switzerland, Iceland and Turkey are all outside of the EU VAT scheme. On B2C sales, when goods cross their border with the EU, Import VAT must be collected. The UK wants sovereignty over VAT so it cannot continue to take part in the EU VAT scheme if it wants to remove VAT on fuel and tampons. So there is no way of negotiating this. 

Unless UK eCommerce businesses move their warehouses within the EU, their current EU customer faces a much worse customer experience than they currently have. Sadly for UK businesses we have very few exclusive products, so in most cases it will be simple for those EU consumers to switch to an EU website to avoid this poor customer experience.

These are the types of eCommerce projects that we can run for you, from zero to small to large budgets.

Adding Amazon Affiliate store to your website. Why write reviews and not get any benefit. Amazon affiliates is a great way to earn without holding any stock.

If you have a strong, brand or theme then you may want to add a printables stores to your website. You can create a brand and then you can design you logo or message and have it printed on t-shirts, sweatshirts, mugs etc. These are not held in stock but are created once ordered.

These projects are easy to implement from a day to a week. Get online today, get in touch. 

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