Navigating E-Commerce Logistics from the UK to the EU: A Hands-On Guide

Since Brexit was implemented on December 31, 2020, many e-commerce merchants from the UK have been having a hard time selling to online shoppers in the EU. Some of them stopped serving the market and others continued selling while facing increased costs. In this article, we explain how to set up your e-commerce logistics to tap into this vast and growing e-commerce market in the European Union, with countries like Germany, France, Italy, and Spain leading in total e-commerce expenditure. Expanding your e-commerce business from the UK to the EU is a strategic move that can open up new markets and increase sales. However, this expansion comes with its own set of logistical challenges and regulatory hurdles. This guide provides detailed steps to help you navigate these complexities effectively.

Understanding Regulatory Compliance in the EU

Customs and VAT:

1. Customs Declarations:
   
   Post-Brexit, all goods shipped from the UK to the EU are treated as imports and must go through customs. You need to consider the following:

• HS Codes:
  Use the correct Harmonized System (HS) codes for your products to classify them accurately, determining the correct duties and taxes.
  
• Customs Declaration Forms:
  Complete the necessary customs declaration forms (such as the Single Administrative Document (SAD)) with precise information about your goods
  
• Customs Brokers:
  Consider employing customs brokers who can manage these declarations and ensure compliance.

EORI & VAT Registration:

• VAT Number:
  Ensure you have a valid EU VAT number if you are selling directly to EU consumers. This might require registration in multiple EU countries depending on your sales volume​.
  
• IOSS:
  Alternatively, the Import One-Stop Shop (IOSS) can simplify VAT collection by allowing you to pay VAT at the point of sale for goods valued up to €150. This system can streamline the process and avoid surprises at the border
  
• EORI number for exporting goods
  An EORI number is essential for importing or exporting goods within the EU. It’s required for all customs declarations and helps prevent delays and additional costs. Apply for it through the UK government’s website or the relevant customs authority in the EU.

Documentation

Accurate documentation is crucial for seamless cross-border shipping. Here are the key documents required:

Commercial Invoice:

This should detail the buyer and seller information, a comprehensive description of the goods, their value, and the terms of sale. Ensure:

• Accurate Valuation:
  State the correct value to avoid penalties for undervaluation.
  
• Clear Descriptions: Provide detailed product descriptions to avoid misclassification​
  

Packing List:

Lists all the items in the shipment, including their quantities, weights, and dimensions. This helps customs officials verify the contents.

Bill of Lading:

This legal document between the shipper and carrier details the type, quantity, and destination of the goods being shipped.

Entry Summary Declaration (ENS):

Required under the Import Control System 2 (ICS2), this must be submitted electronically before goods arrive in the EU to ensure security and compliance​

Product Compliance

1. Safety and Standards
   
   Ensure your products comply with EU safety standards, such as CE marking for electronics, which signifies conformity with health, safety, and environmental protection standards.
   
2. Labelling:
   
   All product labels should meet EU requirements and be in the local language of the destination country. This includes ingredients for consumables, care instructions for textiles, and more​.
   
3. Intellectual Property:
   
   Verify that your products do not infringe on any trademarks or copyrights. Shipping counterfeit goods can lead to severe penalties.

Choosing the Right Fulfilment Approach

When expanding your e-commerce business from the UK to the EU, selecting the right fulfilment approach is crucial. Here, we compare the advantages of cross-border shipping from the UK to the EU with those of using international warehousing (fulfilment centres in the EU).

Cross-Border Shipping from the UK to the EU

1. Cost-Effective for Smaller Volumes:

If your business deals with lower sales volumes or high-value items, cross-border shipping can be more cost-effective as it eliminates the need for multiple warehouses.

2. Centralised Inventory Management:
   
   Maintaining a single inventory in the UK simplifies inventory management and reduces the complexities of managing multiple stock locations.
   
3. Short-Term Scalability:
   
   This approach allows for quick adjustments in inventory levels without the need for long-term commitments to warehousing contracts in multiple countries.
   
4. Control and Oversight:
   
   Keeping fulfilment operations within the UK ensures tighter control over the entire supply chain, from packaging to shipping.
   

International Warehousing (Using Fulfilment Centres in the EU)

1. Faster Delivery Times:
   
   Storing inventory in fulfilment centres within the EU significantly reduces delivery times to your European customers, enhancing customer satisfaction and potentially increasing repeat business.
   
2. Reduced Shipping Costs:
   
   Shipping within the EU generally incurs lower costs compared to international shipping from the UK. This can lead to substantial savings, especially for high-volume or bulky items.
   
3. Simplified Returns:
   
   Efficiently handling returns becomes more efficient with local EU warehouses, as customers can send returns to a local address rather than shipping back to the UK, which can be costly and time-consuming.
   
4. Regulatory Compliance:
   
   Fulfilment centres in the EU are often better equipped to handle local compliance issues, such as VAT and customs declarations, ensuring smoother operations and reducing the risk of non-compliance​.
   
5. Local Presence:
   
   Having a physical presence in the EU markets can enhance your brand’s reputation and reliability, making it easier to gain the trust of European online shoppers.

How Absolute Collagen, a British Family Business, is Expanding to Europe

Absolute Collagen is the UK’s original collagen specialist brand. It was co-founded by leading beauty entrepreneur and CEO, Maxine Laceby, and her daughter Darcy. Before Brexit, Absolute Collagen was only using its warehouse in Ireland to ship to the UK and the EU. But after that, due to increased logistics costs and long delivery delays (5-7 days), they realised they needed another approach to reach their main customer base in France. 

This is why they decided to work with byrd, a pan-European fulfilment provider, that has helped numerous companies like Manuka Doctor with optimising their cross-border setup. This partnership enabled Absolute Collagen to overcome the challenges of Brexit and meet their customers’ expectations better. Now they are in a position to deliver the parcels in 48 hours and have significantly improved their delivery performance which contributes to an improved customer experience.

Conclusion

Expanding your e-commerce business from the UK to the EU involves understanding and navigating a complex regulatory and logistical landscape. This guide gives you the basis to ensure compliance and to optimise your logistics processes. Stay informed and proactive, leveraging the right tools and partnerships to navigate these challenges effectively.