Cross border trade has remained the same since the UK left the EU in January 2020, but all this is set to change in the next few months – new customs rules, new problems for online sellers.
Starting with January 1st, 2021, there will be a new customs system implemented between the UK and the EU. Instead of waiting until the last minute and facing a great number of challenges, start transitioning now so you can successfully operate your business across the new customs border.
We’ve managed to put together a list of changes to help you get ready. December 31st is just around the corner, but you still have plenty of time to prepare for the coming changes so you can continue to operate your business with minimal interruption.
What will change on the 1st of January 2021?
Due to the UK leaving the EU’s Single Market and Customs Union from the 1st of January 2021, there will be new customs rules in place between the UK and EU. This means that sellers will no longer be able to freely ship products across borders and will have to supply the following information as part of the customs declaration:
- A VAT number for the country where they are storing the product
- Country of origin information
- An EORI – Economic Operations Registration and Identification number for the UK and EU countries they will want to ship the goods in and out of
- Licenses and certifications if necessary
- Harmonised System Codes to determine the level of duty and import VAT on their products
With the current EFN system, you are able to sell your products across all five EU marketplaces while being VAT registered in just one country. This is about to change starting from the 1st of January 2021 – you will need separate VAT numbers for every country your inventory is stored.
Negotiations between the UK and EU are still ongoing, including the tariffs that will be put in place for cross-border sellers. While we don’t know exactly what these tariffs are just yet, we know that there will likely be some changes and sellers should prepare accordingly.
These new regulations will have further implications on cross-border trade, including:
- Longer shipping times as sellers navigate new customs protocols
- More responsibility for sellers as they deal with upcoming changes
- An overall increase in operational costs to cover new laws and longer operations
- An increase in cost to consumers to swallow up additional operational costs
Let’s have a look at some Amazon specific changes
A couple of months ago, in July, Amazon announced that their UK FBA operations won’t function as they used to. From January, operations will be split from the EU, which means that UK sellers won’t be able to fulfill all of their European marketplace orders from a UK warehouse. Inventory transfer will also take a hit, as Amazon will no longer transfer inventory between UK and EU warehouses. Instead of shipping all of your inventory to a single warehouse in the UK for Amazon to distribute through Europe, you will need to ship inventory to another EU country to distribute your stock there. Please bear in mind that this will trigger new customs protocols.
What can you do now to prepare your business for cross-border trade in January 2021?
Move your inventory now
After January, Amazon will no longer transfer inventory from the UK to other EU warehouses for distribution. If you enjoy sales from other EU countries, then you will need to start moving some of your stock across the border now to avoid lengthy delays that might arise from the new customs system.
Deliver your stock directly to fulfillment centers
Since Amazon won’t move inventory between the UK and EU starting from January 2021, you will have to set up a system to ensure that a percentage of your stock will get delivered directly to the fulfillment centers around Europe.
Now is the time to research alternative providers that will ship your stock across the border without any hassle.
Get your new shipping model in place
There’s a high probability that shipping will be heavily affected by the new customs rules and regulations. Rather than waiting to see what happens, we recommend researching and setting up a new shipment model now.
Update your policies
Keep your customers in the loop and update your own shipping policies and tariffs to reflect the Brexit changes as soon as the details are finalized.
Set up warehouses closer to your customers
If you have a lot of customers from EU countries, we recommend setting up a warehouse or using a distribution center in the EU. This will reduce shipping time and will help you avoid any costly customs issues.
Research new suppliers
Check if your current suppliers are equipped for the change – alternative research new European suppliers or fallbacks, in case you will need them.
Explore other markets
Now is a better time than ever to investigate other potential markets outside of the UE. Adding a handful of extra destinations to your selling arsenal will provide a cushion for any potential revenue loss that might happen in light of the Brexit changes.
Use a shipping aggregator
Now is the time to have a look at all of your systems and operations. Try using a shipping aggregator to find the best services for your business and to access multiple carriers if necessary.
Put your customers first
While these changes are taking place, remember to put your customers first. This is why we recommend you do the following:
- Keep currency options open for your customers so they can pay in their own currency if possible
- Offer different delivery options and be let your customers know about the potential of longer shipping times
- Optimize your processes for customer transitions and make it as easy as possible for them to buy from you
- Be sure to have customer service processes in place to answer queries as quickly as possible
How can we help you?
We are currently updating JustShipIT to the new standards and we ensure that we will have everything in place by the time the new measures are in effect, we’ll implement the necessary fields for the new customs rules, etc. With these new features, we can make the Brexit transition as easy and as pain-free as possible for you and your customers.