FedEx has released a report that says that UK SMEs are bullish about the export opportunity and those that embrace it are enjoying growth. Apparently 63% of British small businesses are trading overseas and of those 81% are ecommerce businesses.
The FedEx SMEs Export Report says 30% have seen growth in the past year. 86% of exporting British SMEs trade within Europe and 63% export to non-EU countries.
The case has never been easier to make: it’s a good time to embrace exporting with ecommerce. The relative weakness of Sterling after the Brexit vote in June 2016 is one reason (although that also has ramifications for traders sourcing stock from overseas) but even before that cross border trade offered a huge opportunity to tap into a much larger buying public than is on offer in the UK domestically.
So why doesn’t everyone who sells online sell overseas? The answer is that there are barriers, there’s much to learn and it can be a tricky business. Here are some of the key concerns:
Shipping and logistics: Sending items overseas can be unpredictable and fraught with problems. For instance, how do you live up to marketplace standards on returns when the cost of administering such a return might very well not be worth your while? Plenty of international couriers exist and can help, but can the cost be justified? It’s interesting to note that just this week Royal Mail reported changes and increases to international postage prices.
Tariffs and duties: Here the rules really are complex too. Whether it’s Canada, America, Australia, Peru, the Philippines or anywhere there are usually import and export duties that apply. And they differ from nation to nation. To know the full code for even a clutch of nations is a huge undertaking. Obviously, usually, buyers bear such fees. Make sure they know that.
VAT: One of the benefits of trading within the EU (and the UK is still in it, will be for at least a couple of years and we have no idea what the exit deal will be.) is that you don’t have to deal with import and export duties within the EU bloc. That’s the free movement of goods. But it isn’t all plain sailing. If you export goods from the UK to all of the EU member states and comply with all the VAT regulations then you’ll be posting over 60 VAT returns over the course of the year. Talk about red tape.
Language: Not all the world speaks English and even if you translate your listings effectively there will be customer queries and emails to deal with. Even if you or your team have language skills, it’s a big ask to be fluent in all the languages you may have to communicate in. Of course, services are available to help but it’s a stress.
Fear and complexity: It’s hard enough doing the day job, keeping the wheels on and just fulfilling the orders you have. Growing your base and embarking on new ventures can be scary and complex. So, it’s hardly reprehensible that you may feel apprehensive or put it off. There is plenty to learn. And when life’s busy, taking on new challenges isn’t easy.
Solutions
All of these problems can, of course, be solved. And in the Tamebay Guide you’ll find a stack of solutions to grease the wheels, but why aren’t you selling overseas? We’d love to know what the barriers you perceive are and why they stop you from selling abroad. Tell us why you don’t. And if you do sell online, tell us all how you overcame the most difficult challenges. And tell us how well it worked. 🙂
4 Responses
Well we are selling overseas it is essential for us. RMG are not helping however with 2 prices rises in a few months plus all these marketplaces take a cut out of courier fees on top (a legitimate cost), we have managed to find a courier in the EU for some of our markets and have cut RMG out, but still need them for many others.
The UK market has become more of a battle to the bottom and the margins are now at the bare minimum to make it worthwhile it is also heavily saturated.
It is about finding the right market, but it does not take long till the box shifters start following and kill the market it is happening now to a gem we found last year.
Some countries are simply just not there with E-commerce, my partner still uses Classified ads in the Republic a country of all things, opportunites are getting thinner however.
Leaving the EU is of a major concern to us, being stuck with a UK market dominated by US multi nationals and Chinese sellers there is no future here, we am fortunate as we have a get out of jail card with the EU issue as I have no trust in the Government supporting SMES no sweetheart deals here. Language is not a major issue, have no fear, main issue is finding a decent courier with decent rates out of the UK, we have more issues with couriers in the UK than we do overseas. You will see the supply chain using Brexit as an excuse to increase prices for profit a lot in the next few years also, this is will be the biggest barrier to overseas trade.
We currently sell on eBay and list every item under their Global Shipping Program but it does not work due to the type of product we sell. Tools for garages come under the main category of vehicle parts. Vehicle parts are prohibited to most Countries on GSP. eBay will not listen to us when we point out tools are not parts. This should work for international sales but fails dramatically
We do a third of our trade overseas, but the pressures come from two sources – Ebay and Royal Mail.
Ebay do not help overseas trade by failing to provide a smooth seemless buying experience for buyers.
For example, although it’s all “Ebay”, buyers from .com trying to buy on ebay.co.uk cannot access the basket.
Buy items listed on 2 different sites, .com and .co.uk and you cannot combine them on one invoice.
The list goes on. One of the other sites we list on can combine invoices automatically converting currencies – buy an item in dollars and one in euros and the invoice combines them all in the currency of your choice.
If a smaller site can do it, why not Ebay???
As for postage, Royal Mail continues to abuse it’s monopoly position, hopping from foot to foot justifying its price hikes with veiled threats about the universal service and mysterious cost increases.
We are being slowly priced out of our sector (small collectables) by the high cost of postage overseas.
We are also unique in the UK for having no express international delivery, unless you wish to pay a fortune for a courrier.
Since Swiftair was axed and not replaced, there is no service to get items overseas in a couple of days.
Our overseas buyers refuse to believe there is no express international service offered by Royal Mail.
As for taxes, VAT and customes, these will always be there – but Ebay and Royal Mail could make things a lot easier for overseas trade.
The fact is that they don’t and have no intention of doing so.