What does Brexit mean to online sales from EU to UK?

Brexit negotiations have been going on for years, which finally at 1. January 2021 were effectuated. However, planning for what Brexit would mean to trade between UK and other countries, has been almost impossible.

In this short post we have highlighted some of the Brexit consequences for selling online from the EU to UK:

• On the positive side, trade between EU countries and UK, will not be restricted by quotas or taxes as long as the traded goods are manufactured in EU.

• The reality is though, that a lot of goods are manufactured outside of EU and therefore taxes will be applied when shipped to UK.

• Taxes vary on different product groups, and even if only some of the product value is manufactured outside of EU, this will be calculated and taxed accordingly.

• UK's previous rule of VAT free imports on products below 15GBP is also removed, so VAT (currently 20%) is paid on all sales. VAT registration in UK is now also required.

Credit card fees to quadruple?

Mastercard recently announced that they will increase the fees by at least 400% from 0.3% on credit card payments and 0.2% on debit card payments to 1.5% and 1.15% respectively on payments from the European Economic Area (EEA is all EU countries + Iceland, Liechtenstein and Norway) to the UK. Why? Well, because they can: Since 2015, the EU has capped these fees across the EEA countries, including within the UK. But now, card issuers apparently can set the price themselves, and that could turn out to be very expensive for the selling party.

Should I start selling in UK now?

Historically, UK has been one of the toughest e-commerce markets to enter in many years. Although the demand-side is very strong, UK has always been one of the first markets to enter for brands and webshops from around the world. With the extra hassle and costs involved in doing business with UK currently, it would be worth considering other large European markets inside EU as an alternative, unless there's a special opportunity or gap in the UK market for your product. Hopefully over time better trade agreements will be gradually introduced between EU and UK. Consider a Market Scan to find the best fitting market for your shop/product.

Sources: ehandel.se, dhandel.se & theguardian.com

Here is why local experience is important to succeed abroad!

Whether you are doing marketing in Denmark, Sweden or Germany, Google Ads and Facebook algorithms are the same. But why shouldn’t a marketing specialist such as me be able to run campaigns in all three countries? I am a native Dane; I can read Swedish and I studied German in high school.

The answer is quite simple, culture. Even though Denmark borders both Sweden and Germany, the three countries have significant cultural differences when it comes to online shopping. So, what should you consider when launching your business in a new country?

One thing is language. It is important not just to have category texts and descriptions in the native languages, it is also important to have product texts translated in order to both help the customer but also to support the feeds needed to conduct online marketing campaigns. If a potential customer in Germany is searching for a “lederjacke” and your product text is in English and the product is called “leather jacket” your product will not be eligible to be listed on Google Shopping.

Therefore, by having well-written category and product texts, your Google Ads click prices will in turn be lower and your ad budget will be able to generate more traffic. An increase in traffic from Google Ads will help feed your Facebook Pixel, thereby making it possible to create better audiences for your paid Facebook campaigns. Accordingly, better audiences for your Facebook campaigns combined with Google Ads campaigns that are able to showcase your products locally will result in higher revenue, seen as you are able to find the right customers through both push and pull media. This is perfectly displayed through the week on week revenue from one of our clients, where customer service, marketing efforts and algorithms go hand in hand and ensure the success of our client abroad.

Graph displaying the week on week increase in users combined with revenue. Highest revenue being 57.000 SEK weekly and highest number of users being 5.050

But what should you as a webshop owner do? How do you make sure that you take both the online shopping culture into consideration as well as having product descriptions that are not just translated but also optimized for search engines?

In my position as a Marketing Specialist at MakesYouLocal, I work closely with our native E-commerce specialists. We cover 10 different languages here in Copenhagen as well as 16 across Europe, all native speakers. I am therefore able to get feedback and inputs on marketing campaigns targeting a specific country or region, as well as getting insights on questions and concerns from customer service calls, emails and our monthly customer service reports.

By collaborating and sharing knowledge about our end customer's issues, desires and needs, as a marketer am able to create campaigns focusing on exactly what the customers need and our native E-Commerce specialists are able to get both paid and organic search data. Data they in turn can apply when writing well-written product and category texts, thereby optimizing for search engines.

Read more about our marketing approach and how we can help you succeed abroad here.

Amazon, one channel among many

The media has been writing up and down about the launch of Amazon here in the Nordic countries - and the launch has not even happened yet (early September 2020)! This seems to overshadow the real challenge: that e-commerce is entering a new phase, where the complexity has moved from setting up a platform and making logistics smooth, to actually getting your products in front of the consumer.

Amazon, Facebook, Zalando, CDON, Google and your own shop are all potentially profitable channels!

We, the consumers, are navigating many websites, market places and social media channels every day. Most of them are free, or at least partly financed by ads, making them the "shopping streets” for the modern consumers. This is where we, as online sellers, can find the consumer and offer our products.

Source: Broadbandserach.net

Today Amazon is the "mega-mall" where you can find anything and Zalando is the "fashion district". Instagram is a new upcoming area with high-end brands, and maybe you just learned that all the unique and handmade home decor is to be found on its own street called etsy.com. 

The challenge for the future is that things will change. If one street is very popular, the price of having an outlet will go up. This will be too expensive for the new and trendy brands, they will turn to new and less expensive areas and the influencers will join them because "main street" is boring.

How to navigate in this world as a brand owner?

Instead of trying to guess which channel(s) you should sell through the next month, next quarter or next year, it is much more important to create a platform of your own, allowing you to direct your products to new channels tomorrow, if it looks promising, and somewhere else next week, if it is a better idea at that point of time.

To be able to navigate the future of e-commerce you need to have two things.

1. Your own localized webshops in the countries you sell in. This is the home for your brand, this is where products are sold in your environment and surrounded by the values that you find important. This is also where your loyal customers return to to see new products for themselves or to buy presents for their friends and loved ones. This is also where you can guide traffic from your own channels; newsletters, events, influencers, physical stores etc. Finally, this is where you will turn complaints and bad experiences from all the channels you sell in, into happy endings and loyal customers.

2. A world-class product feed This is the new SEO. In order to be visible in all the existing and up-coming sales channels, you need to meet the formats and have the elements in your feed, required by these channels. Your product also needs to be valued attractive by the algorithm in order to be presented to the consumers. Is your product a match for the visitor on their platform, are your price and other terms attractive, is the product title length correct, is the language on the landing page the same as the consumers? All these questions are asked in different ways by each channel. Your product feed needs to be compliant and easily adjustable, making it easy for you to move your products to the channels with the attractive customers giving you the best ROI.

If you have these two things in place, you can make your products available to the world on your own terms. You can connect to end-users and you can choose between the sales channels that provide great value for you this week - and change them next week.