5 Tips For Cross Border Trading Post Brexit


By Kiel Harkness - Marketing Director United Kingdom, Ireland and Nordic Countries at UPS

The UK government has signaled its intention to trigger Article 50 in March, and officially notify the EU of its intent to leave the union, setting off a two-year period of legal negotiations, including new trade relationships and parameters.

The time since the referendum result has been one of uncertainty and the economic conseqences of Brexit were still unclear. When and how  Britain was going to leave the EU was a matter of fierce debate.

Now, with a little more clarity on timelines, the consequences are still hard to predict. It’s likely that the UK and EU governments will implement new customs procedures. But what they will look like is  unknown.

This article will look at the some of the essentials of cross-border online retail trading , regardless of the circumstances.

The import of export

While the UK has always been a nation of exporters, in a post-referendum environment small businesses have lost confidence in exporting. In a study conducted by UPS both before and after the vote to leave the EU – the 2016 European SME Exporting Insights Study – we found that before the vote, 36% of UK SMEs forecasted an increase in exports, which fell to 20% after the vote. Companies forecasting a decrease in exports rose from 7% to 16%.

SMEs from all countries surveyed in our study revealed that they are mostly held back from exporting by the practicalities of cross-border shipping.

The biggest concern for SME exporters — whether exporting to other EU countries or beyond — is the risk of damage or loss to their shipments. And if exporting beyond EU borders, customs clearance and regulations are a significant concern as well.

While these barriers to exporting can seem overwhelming, there is an undeniable online retail opportunity for SMEs who are hopeful and willing to expand to new markets, whether in the EU or beyond. UKTI estimates that in December 2016, the value of exports (EU and non-EU) amounted to £31.4 bn.

The opportunities and reward of export are there for the taking, to help you overcome some of the uncertainty, here are five easy steps to help guide retail SMEs’ thinking and activity when trading cross-border post-Brexit.

1. Get to know your market

There is no substitute for visiting potential markets and experiencing the local culture first-hand. Getting to know your target market is immensely helpful when preparing your delivery strategy, as it provides priceless insights into a market’s trading values. You can travel on your own or take part in an organised trade mission. 

Governments and industry groups organise different kinds of trade missions, which provide an excellent opportunity for business owners to explore a potential market. They often include ‘meet and greets’ with potential trade partners, as well as the opportunity to connect with local businesses, and the possibility to speak with their peers about similar experiences and assess the competition.

Last year, we participated in three trade missions in partnership with Enterprise Nation to Ireland, Germany and China, which included focused educational sessions in addition to networking opportunities. 

2. Know the rules and regulations

Before committing to entering a new market, it’s important to identify and understand what local laws and regulations apply to your product or industry.

Regulations are also subject to change, and it’s vital to remain up-to-date on these changes. This due diligence can help SMEs avoid expensive customs holds and resulting delivery delays.

The recent change to the de minimis threshold in the U.S. is a good example. UK businesses stand to benefit from an increase in the value limit on imported items that are exempt from import duties, making it more attractive — and cheaper — to sell your products in the U.S.
If in doubt, check out these useful tools which can help you export to 150 markets around the world.

3. Get to know your customer

It’s important that your website appeals to your target audience. Our research has shown that online retail customers have unique needs in their respective markets. So, it’s vital to assess what shoppers in various markets like to have, and what they take for granted.

As consumers’ online buying matures and increases, they expect more from online retailers — particularly regarding website capabilities and delivery options; visibility and traceability of a package are also important variables. Be sure to keep this in mind when choosing the services and technologies you need to deliver excellent customer service.

4. Convenience is key

Delivery is a vital part of the customer experience, indeed our research found that almost 40% of a customer’s considerations when shopping online relate to the delivery and returns process. 

Speed of delivery determines the service level that you use and plays a role in determining your shipping rate. Customers are also demanding greater visibility of information such as delivery costs and time-in-transit much earlier on. Successful retailers will be those that provide this information clearly and at the outset, with all-inclusive costs for international customers.

By providing customers with more reassurance and control over the shipping and delivery experience, you will ultimately create confidence and loyalty, and you’ll also drive repeat sales.

5. Don’t forgot returns

It’s not just about getting your products to your customer. If someone from overseas is buying a product online, they need to know they can return it easily if it’s not quite right. One of the main reasons people don’t want to buy from a retailer abroad is that they don’t want to experience any difficulties and incur extra costs with a return shipment. 

Our Pulse of the Omni-channel study found that managing returns is a key retail success factor for online retailers. In fact, 61% of consumers will shop more often with a retailer if they offer a hassle-free returns policy.

In our study, retailers noted that their key challenges in this area are managing defective goods (65%) and performing quality checks (61%). Customer confidence and brand integrity depend on efficient returns.

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