Dealing with Location for UK and EU Ecommerce Sales Growth and Compliance

Thursday May 20, 2021 | Posted at 11:28 am | By Paul Dicken
May 20, 2021 @ 11:28 am

In this post we talk about the complexities of successful multi-channel, multi-location, multi-warehouse selling.

We wrestled with the title of this blog post for a while, and it is a mouthful we admit, for reasons that will become apparent. One word we managed to avoid in the title was ‘Brexit’, yet as this post goes to virtual press it’s still having a major dampening effect, particularly for UK sellers selling to Europe. In fact, in a very recent survey on the biggest barriers to long term ecommerce growth which we presented at Tamebay Live this week, tax and customs changes in the UK and soon-to-be EU were the number 1 blocker.

The survey also revealed that 46% of all sellers are doing less than 10% of their total revenues cross-border. This gives you an idea of the Brexit factor, since almost a half are doing very little overseas. It will be very interesting to see how this figure changes in the second half of 2021, as EU marketplaces become responsible for collecting the VAT in many instances, similar to the situation in the UK, and we move to a ‘one stop shop’ OSS single EU VAT return for ecommerce.

Location is the key factor here, which is why it finds its way into the blog title. Marketplaces in the EU will charge import VAT from outside of the EU at the rate of the country where the buyer is located. So location of the stock to start with is also important, since this rule will apply if the stock is located outside of the EU before its journey to the buyer. With sellers who have stock housed in more than 1 location, therefore, especially if some is in the UK and some is in the EU, being able to account for what stock from where is being used to deliver to what buyer in what country becomes a major challenge. Confused yet?

Against this changing regulatory background, then, we’ve been working hard to make it easier for sellers to grow their cross-border sales while remaining compliant and being able to account for the fiscal detail behind each transaction. One of the fruits of these efforts is automated listing updates. These updates are based on the location of both the buyer and available stock. The knock-on effects of this should be two fold: it will help sellers increase their sales by presenting more accurate location-specific stock availability and handling times. It will also improve seller performance ratings by complying with the relevant marketplace, UK and EU regulations concerning cross-border trade.

As we’ve said, many larger sellers operate multiple warehouses across the UK and EU. They therefore have a requirement to sell stock to certain countries out of certain warehouses, favouring the warehouse most local to the buyer so they can offer the best delivery terms. The Volo Origin system first checks stock availability locally to the buyer, then in other locations, and finally going to back orders, before updating the listing automatically to offer the genuinely appropriate delivery time and shipping partners. This more ‘honest’ listing to the buyer should ultimately feed into the seller’s sales and marketplace ratings.

Being successful is a function of maximising the times sellers’ items are turning up in search. If a seller has got stock close to their buyer, then they’ll want to be able to promote that. Automating this process increases productivity and sales effectiveness. Additionally, apart from the commercial benefits, this approach also delivers marketplace compliance so that sellers’ accountancy packages are picking up the right charges and can demonstrate this accordingly.

At the time of this post, Amazon and eBay are dealing with the new buying process differently, with eBay making it part of the decision-making process and Amazon dealing with it after the order. For example, if a seller’s listing says that dispatch is from the UK, but the order ends up being shipped from somewhere else, this is fully visible on eBay, since eBay connects to shippers via APIs. Since it can see when an item was shipped, where from, the shipper/service chosen and the time to deliver, in this example eBay will issue the seller with a policy violation.

In addition, since eBay should also have taken tax at source for a ‘foreign’ company selling from the UK, it will also impose fee surcharges, affecting the sellers’ metrics. At the risk of repeating ourselves, this UK scenario will also play out in EU scenarios from 1st July.

Regulatory changes are a challenge, but as is usually the case the changes present opportunities for sophisticated and organised sellers. For example, international brands and manufacturers with a worldwide featured store and automated location-based listing updated can more easily control how stock availability and order delivery windows are presented in the different countries. Secondly, brands with a conflict of interest who don’t want to sell direct but do want a strategy for marketplaces can work with partners using this same approach, getting stock feeds from their fulfilment partners according to drop ship location.

To discuss how systems can help you navigate the complexities of selling across multiple online channels from multiple warehouse locations to buyers in multiple locations, get in touch with us here.

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