Ecommerce after Brexit

Selling internationally on eBay after Brexit: how to turn challenge into opportunity

In this article eBay sellers will read about the recent Brexit-related updates and recommendations so they’re better prepared for post-Brexit opportunities & challenges.

With Brexit now “getting done”, what can international eBay sellers really expect? Even though certainty levels are going up, the final trade agreement has yet to be determined.

For now ecommerce sellers should carry on, but also prepare for the future. It’s worth following eBay’s Brexit updates as the platform continues to monitor the situation. Sellers can also take matters into their own hands and prepare their business for potential challenges and opportunities.

In this article you’ll learn about:

  • The impact of Brexit on eBay sellers & how they can prepare for post-Brexit reality
  • The action points sellers should add to their to-do lists if they (plan to) sell internationally.

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International ecommerce: UK leaves EU

The UK left the EU on 31 January 2020 and entered a transition period till 31 December 2020. This is the date on which Britain will probably leave the single market and customs union. The transition time is to give both sides some breathing space while the future UK-EU relationship and co-operation are negotiated.

In the meantime the UK remains in the EU’s single market and customs union. It continues to obey EU rules, but is no longer part of the political institutions. This means that nothing changes for cross-border ecommerce and sellers can continue to trade under current rules until the end of 2020.

What aspects of the future UK-EU relationship need to be decided?

  • A new free trade agreement
  • Law enforcement, data sharing and security
  • Aviation standards and safety
  • Access to fishing waters
  • Supplies of electricity and gas
  • Licensing and regulation of medicines.

The final trade agreement is a key point for many eBay sellers. It may have various implications for businesses exporting and importing goods to and from the UK.

According to eBay,

Brexit will definitely mean changes to trading rules once the transition period has ended. But we won’t know more until the UK and EU have agreed these.

The platform will be monitoring the situation over the coming months and will provide updates on the latest advice from the Government.

Brexit-related updates for eBay sellers

eBay, which relies heavily on cross-border trade, announces Brexit-related updates. The platform has highlighted the contribution of Britain’s entrepreneurs to the UK export market. eBay wants to make sure policymakers and trade negotiators fully understand the role of international trade for SMEs.

For example, in a press release in August 2019, the data published was to show the role of British small and medium sized businesses to UK exports so their voices are heard in trade negotiations.

According to the data drawn from the 200,000 UK-based SMEs trading on eBay (in the past 12 months), almost two thirds (64%) of eBay’s UK-based sellers exported products internationally. Export sales grew more than 25% in the past five years.

British SME sellers on eBay are connected to millions of buyers in almost 200 countries. Their top three export markets are the USA, Germany and France. Other top countries include Ireland, Italy and Australia.

The products generating the highest spend globally are mobile phones, watches and laptops. The top products, however, may differ considerably, depending on the country.

For example, electric hair removal devices are top products in UK exports to the USA and Dyson cordless vacuum cleaners take the top spot in exports to France. Exports to Germany, in turn, are dominated by digital cameras.

Contribution of UK small businesses to international trade

According to Rob Hattrell, Vice President, eBay UK:

The debate about business in Britain has often ignored the contribution of UK small businesses to international trade. (…) Small businesses, which are the lifeblood of the economy, should have a far greater voice. (…) There are small businesses up and down the UK working hard, day in day out, to grow and build their businesses.

Liz Truss, Secretary of State for International Trade, adds: “SMEs are a great driver of the UK’s export success. (…) It’s more important than ever for British firms to take advantage of the global appetite for quality British products to grow their businesses and create jobs for their local communities.”

Top ten SME export markets in terms of money spent:

Top five product categories exported globally from UK SMEs on eBay:

  1. Mobile and smartphones
  2. Wristwatches
  3. Laptops and netbooks
  4. Music records
  5. Trainers

What can marketplace sellers really expect after Brexit?

During the transition period from now until 31 December 2020, sellers will get more certainty and direction, based on the agreements and trade deals reached. If, for some reason, the new trade agreement cannot be reached in time, the UK may end up trading with no deal in place, which would mean extra tariffs (taxes) and various trade barriers.

However, at this moment too much speculation is a waste of energy. Irrespective of the agreement reached, the most important thing is that things will be clearing up for eBay sellers.

quote icon
ecommerce expert mike 02
The moment the new tariffs and regulations are known, sellers will be able to make informed decisions and focus their future investments and daily activities.
Mike Bishop, CEO at Webinterpret

For sure, there will be changes as a result of Brexit, such as currency fluctuations, trade deals and tariff changes. Some changes will be positive for sellers and some may be negative. But still, a large number of sellers will be hardly affected.

How can eBay sellers prepare for post-Brexit reality?

Sellers are encouraged to be prepared for the different scenarios. For instance, they can register for a UK EORI number (Economic Operator Registration and Identification) at www.gov.uk/hmrc/get-eori. An EORI number will be required to import / export goods to and from the EU and to apply for authorizations to make exporting easier. If you’re already UK VAT registered, HMRC will automatically allocate an EORI number to you. Otherwise you must apply for one.

According to Mike Bishop, sellers that may be affected by Brexit should take a proactive approach to protect themselves against any potential disruption, e.g. by ensuring that they have enough/excess stock. If they trade across borders, relocating inventory to warehouses closer to their customers may make sense, too.

Many manufacturers will have a chance to become competitive abroad. Some merchants can improve profitability if they watch the currency situation closely and use the right moment to sell with a higher margin. There may be further advantages, depending on pricing/tariffs.

You can survive and even thrive in the face of changes. If you’re open-minded and on the lookout for opportunities, you’re likely to find them, especially in cross-border trade.

Selling in different markets gives sellers a chance to multiply their revenue. It can also turn out to be a business first aid kit in case of specific country challenges sellers may face, especially after Brexit.

For example, after losing revenue in one market at any point, for any reason, merchants can put in more effort in countries that can offer them the best possible ROI. In other words, it’s better not to put all your eggs in one basket and marketplace sellers should definitely consider expanding their country portfolio.

The reality is that there has never been a better time to test different markets in an effective and affordable way. For example, there are automated ecommerce solutions that enable eBay sellers to instantly expand worldwide and boost their sales.

Conclusion

The actual impact of Brexit on ecommerce is still unknown. However, things have started to clear up and certainty levels are going up. If eBay sellers stay proactive and consider the opportunities created by cross-border trade, they increase their chances of staying on the safe side.

According to Mike Bishop:

It’s more productive to be driven by the opportunities created by cross-border trade, irrespective of Brexit.

Despite the volatile times, there’s a general enthusiasm about trading abroad. According to eMarketer, the majority of retailers in the UK, the US, Germany, France and Canada offer online sales to international buyers and more sellers plan to do so. Furthermore, 70% of online buyers have recently purchased from foreign sites.

Cross border ecommerce on the increase

Despite the volatile times, there’s a general enthusiasm about trading abroad.

As a result, facing Brexit, growth-minded eBay sellers should put higher priority on making their products available to a wider circle of buyers internationally. Ecommerce is growing fast and on a global scale, which is unlikely to change any time soon.

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