Brexit in many ways feels like it happened a long time ago, but the impacts are still being felt and post Brexit selling to Europe isn’t anywhere near as easy as it once was.
Post Brexit selling on Amazon Germany down 70%
A major challenge for Amazon sellers is that Amazon FBA in the UK is no longer part of Amazon FBA in Europe, this means stock in the UK won’t be sold into the EU and stock in the EU won’t be sold into the UK and Amazon won’t move your stock across the English Channel for you.
UK Online Stores, who track sellers on Amazon & eBay European marketplaces, reports that almost 70% of UK sellers on Amazon Germany have now stopped selling.
“Back in November 2019 over 9,500 sellers from the UK had made at least one sale on Amazon.de. Nearly 50% of these sellers had made over 500 sales. However, by May 2021, 6589 sellers had not made a sale in the previous 3 months. That’s nearly 70% of sellers that have stopped listing products and making sales on Amazon Germany.”
– UK Online Stores
French marketplace VAT SNAFU
As well as the logistical challenges of post Brexit selling to Europe, there are also regulatory challenges and one seller has told us of a massive VAT bill they’ve incurred due to the vagaries of trading with the EU. Since July they were shipping with a major UK carrier, but had consistent issues shipping to France with customers being charged VAT by the carrier on top of the VAT they paid through IOSS collected by the marketplaces (such as Amazon and eBay).
The carrier suggested that they send parcels DDP (Taxes Paid) as they were aware of the issue and implied that they could credit them back once resolved. Now, 3-4 months down the line, the carrier is finally saying that French Customs rules mean they don’t acknowledge IOSS on an “Unpublished list of Commodity Codes”. This has left the seller liable thousands of pounds of VAT collected by the carrier as well as the VAT already paid through IOSS by eBay and Amazon.
Post pandemic Post Brexit selling to Europe
Many businesses have seen unprecedented levels of domestic online sales during the course of the pandemic, but as the pandemic pressures start to ease picking up regular selling will become more important for future growth once again. If you used to sell to Europe and now don’t, whether through the likes of passive Amazon FBA selling or by directly shipping to the EU, how are you meeting these challenges. Do you still sell to the EU at the same levels as before Brexit or have you virtually ceased trading with the continent?
12 Responses
As someone who sells original artworks from the EU to the UK on occasion (I’m not VAT registered), for most of 2021, eBay have been taking 20% VAT from customers. Only in the past month I’ve noticed they’ve finally started charging the correct 5%, which is helping a little with the sales. However, I’m waiting for regular customers to notice the change and ask me why the big difference in VAT, and why were they overcharged previously? Sure, they could try to claim it back, but by and large the government are getting extra revenue, and sellers are charged higher fees. It’s been the same problem with book sellers and a few other niches. It shouldn’t have taken this long.
EBay IOSS is a complete mess in France under UPS deliveries. When sending from UK, the continental buyer correctly pays the VAT due on the eBay system only for UPS to try to charge the VAT again upon delivery. All documentation has been filled in correctly, all paperwork submitted on time, all parcels clearly labelled. Parcelforce at present however don’t seem to be too bad when using the IOSS method.
I think the problems are
1) The Domestic market (which many are now locked into) is flooded with competitors. Many who seem to move huge volumes, are not based in the UK and yet seem to be unaffected by the shipping crisis. Meaning weak margins, weak volumes, lack of ability to invest, and lack of opportunities.
2) Shipping to the EU is friggin expensive, and all those same offshore competitors also operate there, meaning you cant be competitive.
3) Getting goods returned generally means you will lose the product & the have to refund the fees, as returns are simply not worth it. (i.e Amazon where 90% of returns can be unused, unopened – But marked as faulty)
4) Domestic wages are rising, meaning when you look at the work involved with selling online, the lack of opportunities and margins., working at £11 an hour your local Lidl, seems a better ‘opportunity which means more people are likely to not only give up selling to the EU, but domestically as well. Another example is Royal Mail is offering £15.75 an hour to sort parcels this Christmas on nightshift, near Heathrow (Wonder where these are coming in from duty-free).
The profits is in helping offshore companies sell into the UK (as has been for a long time), rather than selling into it yourself, is you sell anything that you cant be in small quantities from a UK distributor.
We use DHL Global Mail and France seems to still be an issue when it comes to IOSS.
Just had a customer from France claim she was not going to pay the tax bill.
Most items seem to get through fine, but France appears to be “Struggling”.
Some French customers reported being charged the tax on the doorstep, and the La Poste postal worker putting the cash in their pocket but no receipt was given.
Very strange behaviour.
Even though the information is transmitted electronically, we started adding labels with the IOSS information and a large TAX PAID sticker so the customer didn’t pay again, if possible.
We also use DHL global Mail and IOSS have been a massive ball ache, since day one, Irish customs have simply invented there own requirements which require additional information that no over courier in Europe requires, that are additional to the IOSS requirements!!!! German customs rejecting IOSS information an item l if phone number are not in a specific format ie they don’t include “/” which lots of European customers put in there phone numbers as standard, despite the fact that a phone number isn’t even a mandatory requirement and they are happy for customers to leave this field blank. It seems it took Deutsche Post at least 3 months to realize that this was happening and get Linnwortks to update the integration to fix this, so if you are not on Linnworks I’d check that this is happening on your order managament system.
Only 3 years ago I was selling on EU marketplaces like Coolshop and Wupti etc and it was great business. High margins a good postal service as most sales were into the affluent Nordics.
Now I am stuck with the low margin high cost race to the bottom UK market.
The likes of eBay are far to expensive and they constantly run 15% 20% deals for the corporate pals also.
EBay is overpriced everywhere now.
When you do get a EU sale the eBay IOSS does not even port over to click and drop.???. The EU sales are dead I the water now we are simply far to expensive.
The only shining light has been Google listings are so much more prominent they account for 50% of business , as I think people know marketplaces are overpriced they will try independent websites more.
The wife it basically looking after the ecommerce day to day running these days while she brings up the baby and I have had to become a FT slave to a wage again after all these years. Loss of EU sales have been a real blow.
We talked about selling up and moving over to Ireland but that is as big a mess as the UK overpriced just about everything and your basically paying through the nose to live in a giant Fife .
Still to actually find a benefit of this Brexit yet…Tories however they always leave a bigger mess.
My professional opinion, after importing and exporting for 15+ years is that Brexit is the single worst thing that has ever happened to trade in this country.
IOSS does not work.
Importing is an expensive nightmare
Exporting to EU countries is nearly impossible.
It’s killed at least 11% of our annual trade is only set to get worse.
I do not blame Brexit voters, they were voting for a better future and I’m afraid it was ALL lies. We will end up rejoining the EU, I will bet my house on that.
Just had another French customer saying that they paid the tax on the doorstep.
I asked amazon a few months ago IF a customer has no proof that they paid the tax and the tracking shows delivered but no tax demand, then will they protect us.
Every three days I get an auto response saying they are still looking in to it. I know amazon is all about the customer but it’s interesting to see their responses, although they mean nothing!!
I’m a seller from Spain and I have to stop to buy on Ebay UK. With taxes it’s not worth it.
More angry French customers saying they are getting doorstep VAT demands despite paying their duties already on the eBay IOSS.
All of our parcels are clearly labelled and all our documentation is correct.
This is beginning to become a real problem.
Brexit is to blame for all of this. It’s killing small businesses in the UK.
I can’t see a sensible route to selling into the EU when posting myself. I’m in the process of setting up the VAT services provided by Amazon and trialling PanEU FBA sales for Q1 and Q2 2022.
Any other way of doing it seems to have a lot of potential pitfalls. Especially with UK government seemingly ready to ditch the Brexit deal when they feel like.
Prior to 2016 we had a growing trade in the EU, especially Germany. Fortunately, even though it was growing, it never amounted to more than 5% of the business.