The United Kingdom’s exit from the European Union in January 2020 reshaped the landscape of international trade, leaving many E-Commerce sellers, particularly those on Amazon, scrambling to adapt. This article discusses the state of E-Commerce sales before Brexit, the transformations brought about since its implementation, and the logistics models sellers can utilize to optimize their operations on Amazon.
E-Commerce Before Brexit
Prior to Brexit, E-Commerce trade between Poland and the United Kingdom operated with remarkable ease. Sellers on Amazon could ship goods without encountering significant barriers, as the process was streamlined and lacked many complex customs formalities. Products seamlessly reached the UK market, with operational challenges mainly revolving around storage and distribution. Sellers capitalized on Amazon’s European warehouse centers, enjoying the benefits of a well-integrated logistics system without additional hurdles.
Changes Post-Brexit
The scenario shifted dramatically following Brexit. The UK’s departure from the single market and customs union introduced new obstacles for retailers, including customs duties, customs clearance procedures, and VAT implications. As a result, merchants who were slow to adapt to these changes risked delayed deliveries, customs issues, and inflated operating costs. For those on Amazon, selecting an appropriate logistics model became essential. Sellers now needed a clear understanding of the new customs procedures, tax requirements, and compliance obligations when serving UK customers.
Choosing a Logistics Model on Amazon: FBA vs. FBM
E-Commerce sellers can select from two primary logistics models on Amazon: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). Each comes with distinct operational necessities and advantages.
1. Fulfillment by Amazon (FBA)
FBA allows sellers to send their products directly to Amazon’s distribution centers, where Amazon manages logistics and delivery to end customers. For sellers opting for FBA, this model effectively simplifies operations, as there is no need to handle the intricate logistics of parcel delivery and returns. Amazon assumes responsibility for distribution, making it an attractive choice for many. However, it is crucial to partner with reliable logistics providers like ACP Global Forwarding Sp. z o.o., which can ensure timely delivery of pallets to Amazon’s warehouses and smooth compliance with Amazon’s shipping requirements.
While FBA is convenient, it’s important to note that sellers must factor distribution costs into their budgets. The ease of use comes at a price, and effective financial planning is key.
2. Fulfillment by Merchant (FBM)
In contrast, FBM places the entire logistics responsibility on the seller. This model gives merchants the flexibility to manage packing and direct shipping to customers themselves. FBM can be quicker since it doesn’t involve transferring products to Amazon’s warehouses. However, sellers need to work with global courier services like DPD to ensure efficient deliveries. Handling returns independently can be challenging in the FBM model, particularly as order volumes increase. Sellers can mitigate this burden by collaborating with partners who specialize in returns management.
Importer Requirements Post-Brexit
After Brexit, compliance with new customs and tax regulations became imperative. Sellers must procure a UK VAT number and an EORI (Economic Operators Registration and Identification) number to import products legally into the UK. Customs clearance must be conducted under a single entity, and readiness for full compliance with UK regulations is crucial. Logistics partners like ACP Global Forwarding can assist sellers in navigating these complexities, from obtaining necessary identification numbers to managing customs clearance effectively.
Additionally, sellers should look into tax simplifications available post-Brexit. For instance, Postponed VAT Accounting (PVA) allows sellers to defer VAT payments on imports, enhancing financial liquidity. Utilizing a Deferment Account can also enable merchants to postpone customs duty payments, allowing for improved cost management strategies.
Conclusion
Selling online to the UK post-Brexit may appear daunting, but leveraging the right logistics and support can turn challenges into opportunities. With a logistics partner like ACP Global Forwarding Sp. z o.o., sellers can efficiently navigate the complexities of import regulations and customs requirements. By adopting the appropriate logistics model—whether FBA or FBM—sellers can position themselves for success on Amazon, delivering products seamlessly to UK customers.
