Feb 18, 2021 - 08:12 PM
Image Credit: Habib Ayoade
Brexit is a hot topic because of the far reaching effects it will have on many areas of life for people in the UK. Online trade is just one of those areas and the financial implication cannot be ignored.
It essentially means more taxes and more bureaucracy for e-commerce and there were forecasts that many experts in different fields foretold concerning the future after Brexit.
A few predictions that were made included:
• Online sales would plummet
• A recession would ensue.
• Harsh controls by the European Union.
• Higher tariffs and taxes.
• A jump in export costs for retailers.
• Increased sales from abroad due to the newly weakened pound.
Not all of these have come to pass at this point however, and even though it still seems like early days, it's good for the discerning small e-commerce owner to stay ready for the inevitable changes.
Although it has already been four years since the vote was cast to exit, many businesses haven't yet made plans on their next course of action. The COVID-19 pandemic threw an extra spanner in the works and so the paperwork is apparently still in preparation for the final stage. The hammer is yet to fall and lock the new policies in place.
E-commerce After Brexit
The state of the UK as the top e-commerce market in Europe will be affected immediately the exit is through in these three ways:
• Supply chains will have an issue as shipping companies, sellers, and border protection agencies begin to adjust to the new norms and a host of new rules and protocols that may not have been in existence before.
• This will lead to new tariffs and clearance fees which will be transferred to the buyer, seller, or both. If a foreign seller can retail at lower prices than you therefore, this is an obvious disadvantage and a potential drop in international sales. Local sales may thrive though because shipping within borders will be cheaper than outside of them so UK residents will probably prefer to shop locally.
• Finally, longer shipping times and higher customs will make it that much harder for people to want to make purchases from British online shops.An Uphill Struggle
A survey done in July 2020 by whistl showed that about a quarter of respondents from the EU and UK believe that Brexit means delivery of goods from the UK will be slower so they may not be too keen on making purchases from British ecommerce shops.
If the sellers can somehow manage to prevail against this forecast, then there may be hope for a bright e-commerce future for the UK yet.
Focussing your marketing efforts within the UK and outside of the EU until things calm down is bound to help out as well because if you can capture this market, things may not be as rocky for you as they will be with new customs and regulations in the EU.
Those sellers who are flexible enough to adapt fast to the new e-commerce landscape are the ones who will find most success in future.
Feb 19, 2021 - 11:33 AM
One potentially massive problem for anyone doing ecommerce from inside the UK for the EU market would be the loss of their .eu domain name. Since the EU rule is that anyone running an .eu domain must reside in the EU, after Brexit thousands of such domains where frozen and the owners then asked to prove they in fact comply with rule: