Partner Article

LEAVE OR REMAIN: Sell cross-border

Ahead of the British referendum vote, it’s an uncertain time for British retailers operating cross-border in EU member countries. The EU is the UK’s biggest trading partner, as member countries buy 44% of all the goods that Britain, and British businesses, sell abroad. It is therefore important that retailers continue long term plans to take advantage of rapid growth in cross-border ecommerce.

Trading in overseas markets

If the borders go up post referendum, it is likely there will be confusion among SME retailers about where and how they can legally trade with the EU. Our research shows that very few retail businesses are prepared for this, as 60% of small to medium-sized retailers say they have made no plans whatsoever should a Brexit go ahead.

If the UK does vote to leave, new trading agreements will most probably be set in place with the EU, which may make the sales process more complex for both the retailer and for European shoppers. Retailers may face new import duties and be liable to pay tax to EU countries as applies today to businesses in non EU member countries. These changes could be off-putting to consumers, so retailers must have contingency plans in place in order to maintain or get their cross-border business up and running in EU countries, without impacting the customer experience.

Customs Duties

If the UK votes to leave, the status of customs duties is totally dependent on what the government can negotiate on behalf of British business. Retailers must be ready to react to changes in legislation, however they must be cautious of the impact this could have on the online customer experience if they are not currently providing an import duty calculation.

To avoid deterring EU customers, retailers must provide clear and concise messaging to their customers that import duties will be covered in the total basket price, or to offer them the option to prepay duties and taxes, no matter what the legislative changes will be.

The value of sterling

Earlier this year HSBC warned that a Brexit could wipe 20% off value of sterling, however the value of sterling post-Brexit doesn’t have to be the biggest issue surrounding the referendum. The weaker pound could increase exports, with British businesses becoming more attractive and better value for money to customers across Europe.

High-quality British products will become cheaper in real terms as the value of sterling decreases, therefore retailers should prepare to offset lower list prices and add more cost price items to what they’re selling internationally. Being reactive to consumer demand cross-border will be key to success whatever the outcome is on the 23rd June.

With the right preparation for both scenarios, technology and processes in place, retailers can see international sales grow and conversion rates improve whether the UK is in or out of the European Union.

Nir Debbi, co-founder and CMO at Global-e

This was posted in Bdaily's Members' News section by Nir Debbi .