MENU

Brexit: Where does it leave online sellers?

LinkedIn Twitter Facebook

 

Author: Luke Trayfoot, Head of Partnership Sales, World First

 

With the UK deciding to leave the EU a month ago, many online sellers have been left wondering the potential impact on their business. A lot of uncertainty remains about what happens next as Britain looks to redefine its relationship with the rest of Europe. This article looks at the potential implications for e-tailers and assesses how your business could be affected.

 

Importing and Exporting
UK-based merchants selling overseas will benefit in the short-term from a weakened pound making their products a lot more competitively-priced against overseas rivals. Many of our clients have already seen an increase in sales with a weak pound working in their favour.

 

On the other hand, eCommerce merchants with suppliers overseas have seen their costs increase which has made it difficult to maintain profit margins. Overall, the volatility in the currency markets has made it difficult for e-tailers to plan and budget effectively and now, more than ever, online sellers should look at fixing their currency strategies so as to minimise the impact of further volatility in the currency market.

 

Trade
Most of the uncertainty lies in what the UK’s relationship with the EU will look like in the future. What Brexit will look like is still unclear and will depend on the result of future negotiations of trade deals. Britain could join the European Economic Area (EEA), which means it could still get tariff-free access to the trading bloc or it could exit completely and then have to negotiate a whole new set of trade deals with the EU and beyond.

 

How trade negotiations go will ultimately affect online sellers in a number of different ways. These include: the implementation of tariffs, if you need an EU base to sell to one of the remaining member states and how businesses are treated when selling to member state countries.

 

Also, as the EU already has in place a number of trade deals with other nations like Japan and South Korea (both big markets for eCommerce), many online sellers may find they face a whole new set of regulations when selling overseas.

 

Affect of Brexit on Importing and Exporting Goods

The European Digital Single Market
Depending on what the UK’s relationship with the EU will be, its ability to influence the development of the EU’s digital single market strategy will be severely weakened or completely lost and will have a significant impact on those who provide online goods and services.

 

Some of the initiatives in the strategy include simplified VAT measures and creating a more efficient and affordable parcel delivery service for EU member states. According to the European Commission, more than 60% of companies trying to sell online say that high parcel delivery costs are a barrier.

Affect of Brexit on Online Business Confidence

Business Confidence
There is no doubt that the sharp fall of the pound in the days after the vote, volatility in the currency markets and negative economic sentiment has created a climate of uncertainty for many UK businesses. World First research also shows that almost half of UK SMEs do not believe that Brexit will be a positive thing for their business. Such negative economic sentiment could have a knock-on effect on consumer confidence and therefore spending.

 

Uncertainty and volatility is here to stay for the near future and as online sellers try to navigate the business environment following Brexit, preparing for the unexpected is the best strategy you could have.

 

LinkedIn Twitter Facebook

Building an eCommerce fraud prevention strategy for Germany

Building an eCommerce fraud prevention strategy for Germany

Being the world’s fifth largest eCommerce market, Germany has become an exceptionally popular destination for online merchants looking to sell their goods and services. However, retailers should still be aware of the high levels of fraud to do with their number one payment method. Therefore, what do you need to know about building an eCommerce fraud prevention strategy for Germany?
Interview with Kai Li, Vice President of International at Revolve

Interview with Kai Li, Vice President of International at Revolve

eCommerce Worldwide Cross-Border Summit 2017 - Ahead of our annual event on 24th May, we interview Kai Li, Vice President of International at Revolve Clothing, to learn from his experience and knowledge in cross-border trading.
How does device usage differ in France, Germany, and the UK?

How does device usage differ in France, Germany, and the UK?

It is well known that the use of smartphones and tablets has grown rapidly but which device dominates the traffic and at what time of day across France, Germany and UK? And how does device usage differ between these Countries?
Delivery into Russia: what you need to know

Delivery into Russia: what you need to know

Online retailers know the opportunities that comes with expansion into Russia but entering this massive market comes with its delivery challenges. However, what do you need to know about trading and delivery into Russia?
Using non-commercial organisations to grow your online retail business in Russia

Using non-commercial organisations to grow your online retail business in Russia

Russia is frequently perceived by foreign retailers as a complicated and risky environment but there are a number of organisations in Russia that can help you understand this market environment and the rules by which the market plays. But who are they?
Agenda Announced for eCommerce Worldwide Cross-Border Summit 2017

Agenda Announced for eCommerce Worldwide Cross-Border Summit 2017

The agenda has been announced for the eCommerce Worldwide Cross-Border Summit and it boasts a wealth of retail experts with years of experience between them in expanding their brands overseas.
What can UK online retailers learn from major sales events in China?

What can UK online retailers learn from major sales events in China?

By cleverly orchestrating a string of headline-grabbing shopping holidays throughout the year, China is reinventing retail. But why are Chinese consumers embracing these shopping frenzies so readily and offers and how can overseas retailers learn from this to gain and maintain the competitive edge?
How WeChat is used for Business

How WeChat is used for Business

WeChat has been a hot topic for many marketers for a long time. However, how much do we really know about the most used social network in China? And how is WeChat used for business?
Ecommerce in Australasia

Ecommerce in Australasia

The New Zealand and Australia cross-border eCommerce markets are booming and it is looking to continue this way for the coming years. With almost 17 million savvy and highly engaged online shoppers in the region, what do you need to know about these eCommerce markets and which are the most successful retail sites there?
Ecommerce shipping to Australia

Ecommerce shipping to Australia

It’s easy for any retailer to be attracted to the impressive digital adoption Australia has taken with online retail sales of USD $9.5 bn last year. However, this success is not without its challenges as shipping into this widely fragmented country can affect your business - but how?

Contact Us

eCommerce Worldwide
2 Ching Court
49-53 Monmouth St
London
WC2H 9EY

Tel: 0203 696 0980
2016© eCommerce Worldwide

Keep In Touch

powered by Affino

About eCommerce Worldwide

eCommerce Worldwide provides online retailers with all the information, and resources, they need to develop cross-border strategies for entering new markets around the world
Read More