Brexit implications for Marketplace Sellers
The Referendum is over, the country as a whole voted to leave the EU, so what does this potentially mean for marketplace sellers? We don’t know all the answers, or even all the questions, but here are some things you’ll be thinking about over the next couple of years.
Don’t forget though, today the referendum has changed nothing yet and it’s business as normal. It’s simply an expression of the collective nations wishes which the Government is expected to take into account when deciding what to do next (but isn’t actually binding).
Fees and Taxes
Marketplace fees are still generally paid in Sterling unless you’ve registered on another country site. What is likely to change is the VAT. We may see eBay and Amazon fees charged with 20% UK VAT instead of the current 15% VAT. This might look like an instant 5% discount for VAT registered sellers, but in the past fee increases have soon swallowed up any potential VAT savings.
A bigger issue may be small businesses having to register for VAT in EU countries, but for larger sellers that’s already the case and whilst definitely unwelcome and onerous there will always be software solutions to take care of this.
Fulfilment by Amazon is going to get more complex. Currently you can hold stock in a UK Amazon warehouse and fulfil sales through other Amazon EU country sites from you UK stock. That’s not likely to change and makes the shipping into the EU Amazon’s problem rather than yours.
Some sellers have chosen to hold their inventory in Amazon’s warehouses to serve customers on the continent and qualify for Amazon Prime service to consumers in Germany or France. If a UK seller outside the EU is holding stock in EU warehouses that could have some complicated tax implications over and above any current requirements to register for VAT in the country your stock is held in.
PayPal and Payments
PayPal is your friend, they’re used to moving money around the world and, apart from regulatory issues which (with the recent exception of Turkey) they have proved more than capable of handling, there’s no reason it shouldn’t be business as normal.
Other companies such as Currencies Direct, OFX and WorldFirst could prove to be even more attractive in the future. If the cost of repatriating funds from sales rises and exchange rates go up, then a business which can save you fees or offer more attractive exchange rates is going to be welcomed.
Couriers, if they voiced an opinion, have generally been in favour of the UK remaining within the EU. Any customs barriers automatically add in paperwork, cost and possible shipping delays. Potentially shipping costs could increase and import/export duties applied along with the tedious filling out of customs declarations.
This all depends on what form of trade agreement (if any) is bartered for with the EU and we won’t know that for months if not years.
eBay Global Shipping Programme
Smaller sellers could be forgiven for pulling up the drawbridge and deciding to sell to the UK only if customs and tax administration becomes too complicated. There’s no need to do this however, you can simply make use of services such as eBay’s Global Shipping Programme and make it eBay’s problem to do the exporting.
As soon as your product arrives in their Midlands processing centre, you’re responsibility is over and it’s eBay’s problem to ship the item, handle any customs import documents and to handle any tax or duty that needs to be paid.
Cross Border Trade around the world
If you’ve been selling on marketplaces you’ve probably already made sales to countries around the world with which we have no trade agreements at all. Lack of a Trade Agreement doesn’t mean you can’t buy and sell, it simply means that you may be disadvantaged compared to a local seller in the destination country by import tariffs.
It’s worth remembering that the Internet has enabled millions of people running small businesses around the world to become importers and exporters. Brexit isn’t going to change that although it may make it more difficult or costly. It’s unlikely to be as easy as the Leave brigade promised in the run up to the referendum, but perhaps not as burdonsome as the Remain camp would have had you think.