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Brexit implications for Marketplace Sellers

By Chris Dawson June 26, 2016 - 10:00 pm

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.

FBA

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

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.

  • JD
    1 year ago

    ~
    I think that the 2 biggest factors on all business will be the effect (if any!) on both the value of sterling vs other major currencies and UK disposable incomes.

    Very much wait and see.

    • Kieran
      1 year ago

      The value of sterling is going to impact on many of us selling goods manufactured in China, all paid for in USD, not good news at the moment, even $1.45 to the pound was rubbish.

      Pushing up retail prices is challenging so it really will end up meaning higher cost of goods and smaller margins.

      It is very early days but hopefully sterling will improve a after a couple of months when things calm down a bit.

      It is still likely to be supressed for a couple of years until the market knows how we will be trading with the world, but i feel brexit was already priced into sterling to some extent and was already supressed.

  • Neil
    1 year ago

    Your vat information is the wrong way around. At present, any seller exceeding the vat level in an EU country needs to register there. Outside the EU, the registration would only be necessary if the goods were stored and dispatched from that country, as posting inwards would mean the buyer potentially had to pay import vat.

    One of the big benefits of brexit in fact is that sellers will be likely able to sell more into Europe without registration, and would be able to zero rate and therefore offer a lower price, completing more directly with far east and USA sellers.

    For clarification, compare to HK sellers selling now into the UK. They must register for vat if they store and ship in the UK, but if they post from HK *to* the UK, they need not.

    • Kieran
      1 year ago

      Agreed, potentially we would be able to sell Zero rate VAT to 27 more countries, it would be like selling to the USA now.

      But we will have to wait and see, because it very much depends on the types of trade deal that is struck with the EU as part of the negotiations to leave.

      London will want and need to keep the passporting system to allow them to do currency trading with the EU and generally the UK will want to keep access to the EU market, but without accepting free movement of people or EU laws.

      If we are able keep some kind of access to the EU market then it is very possible that the VAT system will stay as it is now.

      I think it will be a while before we know what deal will come out of brexit.

  • TINKER
    1 year ago

    There is more to the Planet than Europe?

    17 packages exported this morning
    2 x Germany 1x Italy , the others world wide
    including USA , Australia, Isreal, South Africa, South Korea, Thailand,

    • Tim
      1 year ago

      Are your products made in the UK?

    • TINKER
      1 year ago

      about 99% are

    • Tim
      1 year ago

      I think there will be more issues for people whos products are made in the EU

  • JD
    1 year ago

    ~
    Less and less of my stuff has gone to EU Europe in the recent past.
    More and more has gone to non-EU Europe though, the likes of Iceland, Norway and Switzerland. Go figure.

  • TINKER
    1 year ago

    its not all bad
    the gold rings on your fingers are probably worth a fiver more now
    lol

  • JD
    1 year ago

    ~
    Some facts:
    Gold is worth less now than 5 years ago, even allowing for the £/$ change.
    The £ is worth more against the Euro than 5 years ago.
    In 1985 the £ was briefly worth less than $1.05.
    ……
    And we are all still here.

    • TINKER
      1 year ago

      more facts,
      gold is worth twice as much today than it was 10 years ago

    • Fred Frogley
      1 year ago

      And the pound is now 30 cents lower against the dollar than it was 5 years ago

  • 1 year ago

    Morning all,

    I work on the World First Ecommerce desk and wanted to give you an insight into the GBP:USD rate as this clearly affects you when importing your goods to sell online. This morning we have hit a 10 year low in GBP:USD with the currency pair currently trading at 1.3250 as I type. Unfortunately the leading FX Banks are forecasting that Sterling will continue to fall as uncertainty looms over the UK economy. On the plus side as Sterling does decrease in value, this will mean that your sales will become more profitable in the US and Eurozone. Though I do appreciate that there will be many other things to consider as highlighted in this article.

    If you wish to get a further insight into Sterling’s movements in the future, please go to: http://www.worldfirst.com/uk/blog/. On this page you will be able to access relevant insights from Jeremy Cook who is regularly featured on the BBC, Bloomberg TV and in leading newspapers such as the Telegraph and Guardian.

    Finally, World First does give you the opportunity to protect your business from currency volatility by enabling you to fix a rate for up to 3 years in advance. There are obvious pros and cons to this, however with the right strategy it is possible to get a profitable plan in place for your business. If you’d wish to look into this further, please give me a call on +44 20 7801 2394.

    I wish you all the best with your future trade.

    Mark Bond

  • glenn
    1 year ago

    some of my suppliers are based in HONG KONG , can i send payment in hong kong dollars , would this be better for me than sending payment in USD ?
    i have a payment of $7000 to send and i am holding it off a for a while

    • Mark Bond
      1 year ago

      Hi Glenn,

      I would recommend asking your supplier for a price in USD and HKD as they may build in different margins depending on which currency you pay them in. Once you have received both prices you can compare those against the current GBP:USD & GBP:HKD rates and see which payment is more favorable for your business.

      In terms of sending your payment to Hong Kong, please feel free to contact me as there may well be improvements we can make surrounding pricing and transfer times.

      Best,

      Mark

  • SAM
    1 year ago

    So many of our sales go into the EU now it is very concerning for us. Short term maybe not a lot change, there has been a bit of a drop in EU sales already this weekend. I want a much bigger market than the UK which I think supply is outstripping demand. Our whole business has done very well out the single market. I hope they do a deal and soon.

    Couriers may well start to be an issue sooner than you think. My RMG shares were 541 last week now down about 475.

    I would be more concerned about the wider economy and people’s disposable incomes.

  • Gareth Barns
    1 year ago

    As a small seller below the VAT thresholds, within the EU, who often sells to the UK, only the buyer would be liable for import duties. No idea what the threshold might be, but for sellers of low valued items, it may make no difference. I suspect it will cost more to send to the UK, a customs declaration will likely be required and as consequence it may take longer for people to receive their items.

    UK sellers, who sell to Europe, might also experience hikes in postage costs and more delays too.

  • Louis
    1 year ago

    I am relatively new seller on the Amazon marketplace so I may not be right. Feel free to correct me.

    I am not VAT registered currently and as result of not having sent Amazon my VAT number they still charge me VAT on the fees. Above you mention Amazon currently charges 15% VAT. Well… according to my monthly fees invoice from Amazon I am charged 20%.

    Also confirmed by details on this page:

    http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=3517791#qualify

    Anyone able to clarify?

  • Louis
    1 year ago

    I am relatively new seller on the Amazon marketplace so I may not be right. Feel free to correct me.

    I am not VAT registered currently and as result of not having sent Amazon my VAT number they still charge me VAT on the fees. Above you mention Amazon currently charges 15% VAT. Well… according to my monthly fees invoice from Amazon I am charged 20%.

    Also confirmed by details on this page:

    http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=3517791#qualify

    Once I register, according to Amazon I will no longer be charged VAT on the fees.

    Anyone able to clarify?

  • Chris Allen
    1 year ago

    The best thing to stop you getting affected by currency fluctuations is to speak to your bank about getting an account in the Eurozone and the USA.

    We have a bank account in Spain, so our Euros from Amazon and our website sales go into that. We also have a bank account in the USA so our USD from Amazon.com go into that. We then try and pay our suppliers directly from our US bank account. When we don’t have enough in that we can use either GBP or our EUROS account.

    If there is a bit of a crisis going on in the Eurozone you can use GBP, or if there is a crisis going on in the UK (as there is now) we can use EUROS.

    The problem with these currency companies saying oh we will open you a bank account in the USA, eurozone etc is that it’s not a proper bank account. You can pay in, but you can’t pay out, except to trransfer it back to GBP. False advertising really.

    • Tom
      1 year ago

      “The problem with these currency companies saying oh we will open you a bank account in the USA, eurozone etc is that it’s not a proper bank account. You can pay in, but you can’t pay out, except to trransfer it back to GBP. False advertising really.”

      Good point! I had the same issue in the past with one of this companies. Maybe Mark from World First will be able to share his thoughts about it..?

    • Faye
      1 year ago

      Chris – Have you set up your own bank account in Spain and the US? If so I’d be grateful if you could explain how to do it?

    • Chris Allen
      1 year ago

      If you have a business account, just speak to your bank. Most banks now are international and have a presence in most countries. We use Santander.

  • Sam O'levski
    1 year ago

    Ways to avoid some problems long term is to ‘encourage’ more UK manufacturing, more employment (forced if some cases) of UK citizens who would then have money to spend in the UK rather than sending it ‘home’ to a foreign country, and adding import duties to stuff from China etc, where they use slave labour.
    Not going to be popular with everyone, but remember how most of our textiles were made in Leicester or parts of the Empire, plastic goods were made in Hong Kong and toys are still being sold/used today as collectibles.
    I don’t think I’m trying to live in the past, and I wonder how much of our politicians’ reluctance to solve these problems is down to their own vested interests with regard to paid directorships, consultancies etc ?

    • Martin
      1 year ago

      We already had the best. Huge investment from car manufacturing, aerospace, pharmaceuticals, hi-tech – except we put it all at risk, and may live to reap the “benefits”. I believe we have killed the goose that laid the golden egg, and we will come to regret it.
      This is a global market and a global economy. Companies put their manufacturing where it makes sense, and there are so many products where the west can not compete with Far East nations.
      Try being objective. Unemployment has been falling, we have a very high number of people employed here (I think the highest ever) and every single one of these people, wherever they come from, is contributing to the British economy. Repeating the old “they all send their money home” is just nonsense. It is proven EU citizens in the UK are net contributors to our economy. They have made their homes here, and they see their future here. Without them we will have a labour shortage. Our hospitals already have a 9-10% vacancy in nursing, schools can’t get teachers, we don’t have enough doctors. We need people to do this, and we need people to continue picking, packing and distributing all the fresh food you buy every day in your supermarket. If you buy from Sports Direct or Amazon FBA who do you think are packing the goods and despatching them? If we are to be competitive in the world markets we need the brightest and best working in our hi-tech industries and in our research establishments, to give British business the cutting edge. This is nothing to do with politicians whatsoever. We choose where we buy and what we buy, you do, I do, every consumer does, and our choices support import of product and the necessity for EU workers in this country.

    • Chris Allen
      1 year ago

      Depends what’s important though doesn’t it? Money and the economy isn’t everything. Do we really want 300,000 + people a year coming in to the UK? Building towns the size of Newcastle every year over vast areas of our beautiful countryside? Me and the other 52% don’t. I like Britain just how it is, thanks.

    • Sam O'levski
      1 year ago

      Martin – where to begin ?
      We have a number of qualified teachers who do not actually work as teachers because they are fed up being attacked and abused by either feral children or the parents (for example). A number of good teachers have gone overseas for the same reason.
      The lack of nurses might be improved if salaries and working conditions were such as to attract school leavers into the profession rather than choosing to breed, take drugs and party because nobody tells them it’s wrong to sit around without a job.
      I don’t think I said ‘they all send their money home’, but I know for a fact that many of them do – I live in a small community where a number of foreign workers are employed manly in tourism/hotel type jobs.
      There are more than enough unemployed British people here to do those jobs, but they’d rather claim benefits because the split shift system of hotel work doesn’t suit their social life of going out and getting so drunk as to be unable to start work at 6.30 am for example.
      Please tell me why there was no labour shortage in the 1970’s as an example, before any influx of economic migrants ?
      I realise things have changed, but go to a smaller town like mine and you’ll find out quite easily how many of the foreign workers send money back home – of course they have made their homes here, and in doing so are helping to destroy their homeland (Bulgarian and Romanian governments have complained loudly ).
      I have lived and worked in Eastern Europe, and understand only too well why many of them will not want to return home to longer working hours, no job security or legal protection etc etc
      The ‘good life’ we offer here was created by my ancestors (and probably yours), for their descendants to enjoy rather than to attract cheap labour from poorer countries, who in many cases are using money earned here to buy/renovate and furnish property in their home country (I’m sorry but it’s a fact where I live, as I personally know the foreign workers who have made no secret of it) – some will spend money here it’s true, but I can see with my own eyes in my local post office when foreign workers send money by moneygram, so please don’t say it doesn’t happen.

    • james
      1 year ago

      in the same sentence, you condone slavery (forced labour) and condemn countries that use slavery?????

    • TINKER
      1 year ago

      not to mention the plight of ebay sellers
      slave labour and charged a fee for the pleasure
      with all you can eat daily abuse and insults

  • Sam O'levski
    1 year ago

    james – in no way do I condone slavery, the ‘forced labour’ you refer to was about forcing able-bodied Brits who sit on benefits, to actually do a paid job and thus save on the benefit payments they receive.
    I’ve never understood the ‘logic’ in foreign workers paying their taxes and thus helping to pay the benefits of lazy idle Brits, which is trotted out quite often in these sorts of debates. I believe it would be better to ensure everyone has a job or else gets no benefits health care etc.
    Why should those who go to work in fact support those who cannot be bothered ?
    If someone is genuinely unable to work then that’s a different matter, but even then I believe many of them would love to feel useful and be able to do some sort of work just like everyone else, no matter how trivial the task, then let’s treat those with ‘problems’ (not self-inflicted drugs or alcohol ones) as ordinary valuable citizens.

    • Gerard
      1 year ago

      Hang about Sam; you claim that people who work in this country shouldn’t support those who don’t, yet want skilled, intelligent and settled workers to be fired so that the ‘feckless’ can take their jobs? Explain that logic. Why should a worker who will undoubtedly destroy my productivity by dint of being a) unmotivated and b) coddled by the system and society (especially one he feels enfranchised by even though he played no part in it) be favoured only because through sheer fluke they were born on this island. I don’t identify with that. I don’t identify with a slim majority (as declared by both Boris and Farage) that was riled up by scare stories and lies. Actual lies. Admitted lies. The farm I grew up on regularly employed European workers because the English ones would do the bare minimum then bugger off home, whereas the Europeans would take advantage of the piecemeal payment system and work solidly and competently, earning their way and increasing the farm’s profits. Sure, you may think they smell, but from a business point of view it made all the sense. This narrow view of Britain ignores our past, both good and bad, and will hold us back. We’re not a super power. We no longer punch above our weight and the world looks at us as if we were the kid who wet his pants during the school play. Pitied. Slow clap. Slow clap.

      As for Chris Allen and his “I like Britain just how it is, thanks.”, you, my friend, are simply deluded. What do you like? The growing racism? The inequality? The loathing felt between regions? I love Britain, but I see it for what it is, a collection of tribes who try and get on for the sake of it. It’s not Albion, it’s simply one country amongst others. Life moves on regardless. Life evolves regardless. Nobody cares if you want to ossify the land in the twilight summers of your youth. You can either let it develop and let it be great, or shut off the funding and let it whither and die.

      Anyone that starts claiming the 52% to put home minor points is ignoring the fact that many voted for many different reasons. Some sensible, many frivolous and a significant minority unsettling and dangerous. Claim kinship with all and be treated as such.

  • 1 year ago

    Hi

    If the UK adopts the the same agreement as Switzerland, then this could also have implications.

    The EU is by far our largest route with daily vehicles to Amsterdam, Brussels and Paris and a charter flight to Kassel in Germany.

    Many MP or leave campaigners tend to think that Switzerland is simple to export too. If you are not a registered exporter and you do not show the EFTA declaration on your shipping invoices, then the consignee will have to pay duty and VAT. For consignments over 6000 euro’s you also need to apply for an EUR1 form which needs to be stamped at the local Chamber of Commerce.

    My concern is that there would be customs controls in place. So imagine the queues at our ferry ports, rail terminals and the administration required for air movements.

    If we send a vehicle to Switzerland, we’re on the border for 30 minutes arrange the clearance. Would this be the case for every vehicle entering or leaving the UK.

    If so, our vehicles to Amsterdam, Brussels and Paris would not achieve an overnight transit and I’m sure the flight to Kassels would have to be scapped.

    Transport costs would also increase by between 30% to 40% based on moving more freight by air than road to meet delivery deadlines.

    At the moment, there are so many unknowns that we do not know the impact the above will have.

    What I do know is that the market has gone quieter over the past few days.

    Martin

    • Derek Duval
      1 year ago

      Speak for your self…my sales are booming…It seems the worst the news gets the better my sales…I hedged my bets with Buying 2 years worth of stock in early June…
      Come on Nigel stair the shi*…

  • Maximus
    1 year ago

    Sam O’levski
    I am an immigrant in Britain, i came to this country to work then go back home some day.

    I do not wish to settle in this country, i wish no immigrant would settle.

    I employ people in this country: British and non British.

    When i earn my hard earned money, I pay council tax, national insurance, income tax, pay other peoples wages, VAT and whatever tax there is.
    I pay into a pension i would not use.

    I buy goods and services in this country I also SEND MONEY HOME.
    Whats wrong with that?

    I don’t tell you how to spend your money so what gives you the right to tell me how I should spend mine?

    People choose to spend and save their money differently, so why should that be your problem?

    A bit of history for you, your ancestors: the Colonial British did not spend their money in the colonised lands, they sent it to Britain(their homeland).

    Britons in Spain, US, Europe etc who are there temporarily save their money back home or for use when they return back home.

    No immigrant who intends to go back to their homeland will spend their entire income in the temporary country so get over it, it has never happened before and it wont happen, its just common sense.

    What has happened to Britain and most western countries is the negative effects of globalisation, those manufacturing jobs (Textiles, Plastics etc) may come back but how competitive will they be?

    If you were a factory owner would you pay £8 per hour to an employee as opposed to £2 elsewhere?

    As a consumer, would you rather buy an item for £10 than £4 because it was made in Britain?

    If your answer to both questions above is yes then manufacturing in this country has a future, otherwise governments should focus on re-skilling people who have lost globalized job and people should educate themselves to how to deal with a globalized world.

    • 1 year ago

      Hi Maximus, I don’t get all this anti-immigration sentiment. The truth is unemployment is at 5% in this country – about as low as it can get. Anyone who voted in the referendum purely on immigration was in my view a little ill-informed.

      We need people like you to generate wealth. We need skilled (and unskilled) labour. We need clever employees at companies like eBay and Amazon to run those marketplaces and generate revenues. We need people who are hard working and contribute to the economy. We need a skilled governor of the Bank of England (currently a Canadian).

      Britain’s history with the commonwealth generated a huge influx of immigrants in the last century. This century immigration from the EU is just the same.

      Britain is a great country and a healthy proportion of the people I know aren’t from a “British” ancestry. Many of these people are my friends and work colleagues. My life would be much poorer without them.

    • Harry
      1 year ago

      Well said, Chris.

      The demonising of the immigrant has been a particularly ugly undercurrent in the past decade of politics and it reached a boil in the referendum. Oh well.

    • Chris Allen
      1 year ago

      I think most leave voters will admit that some immigration is needed. But the question is do we really need uncontrolled immigration? 300,000 a year is far too many. Building a city the size of Newcastle ievery year is ridiculous. 30-40k is acceptable just letting in the people with the skills we require.

    • 1 year ago

      One of the policies that the Leave side made repeatedly during the recent Referendum Campaign was that we should have a Points Based System that allows those with the skills and knowledge that we need to be able to live and work in the UK. So Engineers, Doctors, Nurses, etc are welcome but Aggressive Beggars, Rapists, Murderers and those with no skills at all are not welcome. Why does the EU think that we want or indeed need such as Aggressive Beggars living under Motorway Bridges and bringing terror to surrounding areas?

      There have been reports of Rapists and Murderers from EU Nations coming to the UK to get a new start. But within a short period of time they are back repeating their Criminal Activities that they followed in the their home Countries.

      The UK is an over crowded Country. Those who want to live and work here and make their long term home here are welcome.

      Maximus is totally wrong when he makes out the all Immigrants intend to go home to their Country of Origin eventually. Look at the US. The vast majority of their Population are descendents of Immigrants or are indeed Immigrants themselves. If all those Immigrants or descendents of Immigrants were to go back to the UK, Italy, Ireland, Germany etc the only population of America would be Native Red Indians.

      In reality the vast majority of Immigrants intend to make their homes and indeed bring up their families and eventually die in the Countries that they have migrated to.

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