We still don’t know what’s going to happen during the negations and whether or not the free movement of goods between the UK and the EU will remain unrestricted. If restrictions are introduced as part of the trade agreement, which is a strong possibility, every package your business delivers to a customer within the EU would be required to go through customs in the recipient country. This would result in slower deliveries. Furthermore, packages over a certain value would be subject to VAT, import duties and tariffs, all of which leads to additional costs to your business and/or your customers.
Nothing is going to change in the next year or two until the negotiations have been finalised, so you can continue to deliver goods and packages to your EU customers in the same way you always have. However, it would be wise to start planning ahead in preparation.
- Contact your courier company - they will be taking pre-emptive action to prepare for the potential changes to European deliveries and may be able to offer some useful advice.
- Consider ways in which you could reduce overheads and production and manufacturing costs. These savings would allow you to absorb some or all of the potential VAT and duties of restricted movement, rather than passing the additional costs on to your customers by hiking up your product prices or increasing delivery charges.
- Review your suppliers. Look for more cost-effective alternatives or strengthen relations with your current suppliers to place yourself in a better position for negotiating more favourable terms.
- Foster good relations with your current customers to strengthen the value of your brand and establish customer loyalty. This will stand you in good stead if you have to increase your prices and alter delivery terms.
One potential benefit of Brexit is that you may attract more UK-based customers. The resulting depreciation of the pound has made the UK a less attractive market to online retailers based in the EU and US. Now is the time to make your move and find ways to increase your customer base right here at home.
Graeme Donnelly, CEO and Founder of Rapid Formations, the UK's leading company formation agency enabling individuals to set up a company on 5 easy steps.