Global Ecommerce and International Expansion | Pitney Bowes
The complexity of compliance in cross-border ecommerce
By Rachel Martin, Global Director Product Marketing, Global Ecommerce, Pitney Bowes
Online retail may still be relatively new to certain global markets, but in the United Kingdom, it’s practically second nature. The UK is Europe’s top ecommerce market, and ninety percent of UK shoppers purchased something online in 2013.
These factors make the UK an intriguing target for global retailers who want to sell cross-border. In fact, 28 percent of all UK ecommerce sales in 2013 were generated by overseas retailers. So, it stands to reason that, if you’re a merchant based in the United States, China or Germany, you might want to make your products available to British buyers.
And while getting started can be quick and easy, there are factors you need to consider for the long-haul that can slow you down. Online shoppers expect their retail experience to be fast, convenient and affordable. Inflated shipping costs, confusing taxation and long delivery wait times can overcomplicate your buyer experience. Even worse, it can put your business at risk for non-compliance.
How do you avoid these risks and sell into new markets with confidence? By connecting with a partner that has a strong understanding of international ecommerce regulations and simplified purchasing processes. Selecting a partner who’s an expert in cross-border ecommerce can turn what may seem like a risky venture into a profitable new sales channel.
Understanding Duties and Taxes
As one of life’s great inevitabilities, taxes will be an obstacle when selling into any country. Duties are often required for purchases that cross borders either by import or export. On top of that, buyers and sellers should be aware of value-added national and local sales taxes, which are also added on top of the purchase price.
UK buyers are also subject to a value-added tax (VAT), a type of sales tax in which a buyer at any stage of the supply chain must also pay a percentage of the item’s purchase price.
On average, UK import duty and VAT total over 32 percent. Of course, that’s just for the UK – other countries have different duty thresholds, may or may not require VAT, and may add on additional local sales taxes. If you aren’t accounting for each, you could be walking into a compliance minefield.
Simplify Purchasing for Cross-Border Shoppers
A simpler, clearer purchasing process not only assures compliance, it also removes complexity from the buying process.
For example, shoppers should know the total “landed” cost of a product, which describes all the costs involved in getting that product to their door. That means duties, taxes, shipping and even hidden costs like insurance, crating, handling and fees.
Global ecommerce technology can hide all that complexity by figuring in these costs ahead of time based on the shopper’s country of origin. That way, you can be sure that each transaction you process meets compliance requirements in each country you sell in to.
At the same time, you get the added benefit of providing a single cost of purchase to your buyer upfront, before they ever commit to a purchase. This ensures buyers aren’t hit with surprise duties and taxes after they’ve made the purchase and the item arrives in their country.
Find a Partner That Can Help
Every country has unique compliance requirements and restrictions when it comes to importing and exporting goods. To ensure you’re addressing each regulation appropriately and also crafting a buyer experience that is transparent, convenient and affordable, you need a global ecommerce partner that’s been there before.
The right partner can point you to a global ecommerce solution that serves up the right pricing information for each customer, or recommend the most cost-effective and compliance-friendly shipping strategy for your business. Cross-border retail may be a brave new world for some, but you don’t have to face it alone - and expert help can ensure your sales and deliveries won’t be slowed down due to non-compliance.
Evaluate your company’s ability to launch a cross-border ecommerce strategy and understand the buying preferences of global buyers, download the Pitney Bowes 2016 Global Online Shopping Study today.
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