Watch our Q&A with James Hyde and Luke Nava from ecommerce fulfilment specialists, James & James to hear the latest on changes you need to implement to continue operating with minimal disruption from 1st January 2021.
From the 1st January 2021, there will be a newly implemented customs border between the UK and the EU. Instead of waiting until the last minute and facing a potential onslaught of challenges, start transitioning now so you can successfully operate your business across the new customs border.
We’ve put together a checklist 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.
Summary of the changes on 1st January 2021
Customs The UK is due to formally leave the EU’s Single Market and Customs Union from the 1st January 2021. This means there will be a new customs border in place between the UK and the EU. Sellers will no longer be able to freely ship products across borders. Instead, you will need to supply the following information as part of a customs declaration:
A VAT number for the country where you’re storing the product
An EORI (Economic Operators Registration and Identification number) for the UK and any EU countries you want to ship goods in and out of
Country of Origin Information
Harmonised System Codes to determine the level of duty and import VAT on your products
Licenses and certifications if necessary
With the current EFN system, you’re able to sell your products across all five EU marketplaces while VAT registered in just one country (usually the UK if you’re a UK seller). This is about to change. From the 1st January 2021, you will need separate VAT numbers for every country your inventory is stored.
UK-EU negotiations 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 rules and 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
In July, Amazon announced that their UK FBA operations won’t operate 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.
Pan-European FBA will no longer transfer inventory between the UK and EU countries. Instead of shipping all of your inventory to a single warehouse in the UK for Amazon to distribute throughout Europe, you will need to ship inventory to another EU country to distribute your stock there. Bear in mind that this will trigger new customs protocol.
Your Brexit Checklist for EU Cross-Border Trade in January 2021
1. Move stock now
After January, Amazon will no longer ship inventory from the UK to other EU destinations for distribution. If you enjoy sales from other EU destinations, start moving some of your stock across the border now to avoid lengthy delays that might arise from the new customs system.
2. Deliver stock directly to fulfillment centres
Amazon won’t move inventory between the UK and the EU after January, but that doesn’t mean you can’t. Get a system in place now to ensure a percentage of your stock is delivered directly to fulfilment centres around Europe.
3. Find alternative providers
Research alternative providers that will take your stock across the border without any extra hassle.
4. Get your new shipment model in place
There’s a high chance that shipping will be heavily affected with the new customs regulations. Rather than waiting to see what happens, we recommend setting up a new shipment model now
5. Set up warehouses closer to customers
If you have a glut of customers in one EU destination, we recommend setting up a warehouse or using a distribution centre there. This will reduce shipping time and avoid any costly customs issues.
6. 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 finalised.
7. Research new suppliers
Check the suppliers you use are set up and equipped for the change. Alternatively, research new European suppliers or fall backs should you need them.
8. Explore other markets
While the Brexit transition takes place, it’s worth investigating other potential markets outside of the EU. 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.
9. Use a shipping aggregator
Now is the time to analyse all your operations and systems. Use a shipping aggregator to find the best services for your business and to access multiple carriers if necessary.
10. Consider your customers
While these changes are taking place, remember to put your customers first. We recommend you do this by:
Keeping currency options open for your customers so they can pay in their own currency if possible
Offer different delivery options and be transparent about the potential of longer shipping times
Optimise your processes for customer transitions and make it as easy as possible for them to buy from you
Ensure you have customer service processes in place to answer queries as quickly as possible
At Linnworks, we provide the tools brands and merchants need to sell to customers wherever they are. Through our suite of powerful features, we can make the Brexit transition as easy and as pain free as possible for you by managing and moving your stock across borders, using our Composite feature to bundle complementary products and shift slow moving stock, fulfilling orders with FBM instead of FBA, and helping you communicate extended dispatch times.