What can I do if an EU customer refuses to deliver the goods I have sold?
What has changed in terms of exports to an EU customer after Brexit?
The most significant changes will result from the withdrawal of the United Kingdom from the internal market and the customs union. Any EU customer who purchases products from a UK-based retailer is now subject to fees that include import duties plus courier or postage handling fees. The opposite is of course also the case, as there are additional paperwork and costs for British consumers buying goods from Europe.
Unfortunately, as long as retailers find ways to adapt to these new regulations, consumer standards will not be relaxed. Workarounds are available and will be gladly adopted. But the customs fees and additional paperwork have significantly increased the complexity and cost of shipping products in and out of the EU.
Besides unwanted delays, all additional costs have to go somewhere. For companies that could not cover this themselves, many had to pass this on to the end user. At a time when consumers expect online shopping to completely offset the shopping experience, these effects are building up on many dissatisfied customers. Suffice it to say, this is a hard pill to swallow for smaller businesses trying to compete with Amazon.
> See also: Small businesses selling to the EU face additional administrative costs of £ 180 million
What can I do if an EU customer refuses to deliver the sold goods and sends them back?
Consumers have the right to change their mind after each purchase and, as standard, can return their products within two weeks from the date of sale. The retailer must therefore put in place a return procedure that is convenient for the consumer. Denials are a normal part of doing business online and should be expected as part of the process.
The brand has the right to deduct the return shipping cost from the refund provided the customer has changed their mind, but it is at the seller’s discretion whether this will be deducted automatically – it is worth checking the law of the jurisdiction in which the online retailer is based to ensure that you are fully compliant.
How much will it cost me if a European customer refuses to pay for the delivery?
Most retailers offer free shipping above a certain shopping cart value. An EU customer can refuse to pay for a delivery due to a delivery problem with the carrier. If so, they can contact the brand’s customer service and usually issue a refund or offer a coupon code for the next purchase.
It would be extremely rare for an EU customer to refuse to pay for the delivery. It is more likely that the customer will cancel or empty the shopping cart before confirming and finalizing the order. While you hear of lost sales at the brands, it is almost guaranteed to be due to lost sales, not denied delivery charges.
I’ve heard that some retailers are threatening to burn goods sold to EU buyers, right?
All of this showed a lack of preparation. We are now seeing that many retailers are unable and unwilling to deal with this increased complexity, causing many to rethink the value of proper returns management. Even in the first few months after the Brexit deal began implementation, this aversion to reverse logistics has led to numerous stories in retail, including many reports of retailers threatening to burn returned products.
> See also: Half of small business exporters are struggling with new rules after Brexit
What can my small business do to work around this problem?
While the challenges are daunting, they can be summed up into a single problem: the increased complexity and cost of shipping across borders between the EU and the UK. Companies therefore do not have to withdraw completely from the process. The key to success lies in their ability to distribute inventory, fulfillment and processing capabilities across the UK and EU. This is known as Multi-node fulfillment, and this should now be an important consideration for cross-border retailers.
What is multi-node fulfillment?
Simply put, multi-node fulfillment means that retailers have numerous fulfillment points in different areas rather than having a central distribution center. By realizing that distribution center inventory across a range of regions is one of many benefits, retailers can try to avoid customs controls entirely, as inventory only flows within the EU or UK.
This can be a way to make returns easier as retailers ship from within the EU while processing UK returns to nearby UK facilities (and vice versa).
Retailers and brands can stay ahead of the curve by reviewing existing data to determine where customers are. By drastically reducing processing times, the ability to pick multiple orders at the same time, turn “dark shops” into mini distribution centers or implement an advanced Distributed Order Management (DOM) system, this can ensure that your order management system (OMS) can redirect orders to the corresponding inventory pool. Flexible fulfillment is the answer.
Multi-Node, with its distribution points, can really help ease the pressure that comes with the volume of resource dissemination during peak season or other episodes of important promotional activity. As we saw with Covid-19, peak seasons have changed a bit so this will be a significant benefit going forward.
How much does it cost to use multi-node fulfillment?
Ultimately, it depends on the size of the company. The cost of the multi-node is essentially determined by the space that inventory will take up in each node, plus some minimum costs to cover logistical activities like managing inventory and being ready when sales transactions come up. Depending on the complexity of the implemented solution, there may also be some IT costs to support the order management system (OMS).
What is the minimum size of a company that can use multi-node fulfillment?
It’s hard to tell without asking for more details from the business and its general expectations. The model we follow helps us (and our customers) simulate the size of the business when it comes to transactions that require implemented solutions while keeping things cost-effective at the same time. Local carriers that are closer to the node are used if they can keep costs down.
Overall, this is totally dependent on the brand and where you are on your journey and certain questions need to be asked:
- Are you an established brand?
- Do you see this as a business cost versus lost revenue and how does this affect the bottom line of the business?
- Are there other options that SMEs can consider (e.g. “pop-up” distribution center)
The concept of the “pop-up” distribution center (DC) is another alternative.
Mostly used during seasonal peak periods like Christmas, January Sales, and Black Friday, pop-up DCs are micro-fulfillment centers that are known to take only two weeks to set up. These DCs, which traditionally include both rented and on-demand space, can take the pressure off your primary fulfillment center and can be a significantly cheaper and more strategic option for SMBs. This is especially the case after the Brexit changes, as pop-up DCs offer benefits similar to multi-node, e.g. B. the ability to ship to and from customers in the region.
Since many stationary shops are shrinking the size of Hauptstrasse after a difficult year, we are also increasingly seeing the “dark shop”Model is becoming an increasingly popular means of micro-fulfillment, with brands trying to use excess warehouse space as distribution centers to bring products closer to end customers.
With our multi-node solution RetailConnect, this helps guide employees through the pick / pack / ship processes and organize orders using simple, lightweight hardware that can be kept in storage rooms. This cloud-based technology drives the multi-node fulfillment process and helps meet customer requirements. The importance of an omnichannel approach cannot be overlooked in order to maintain customer satisfaction.
Christophe Pecoraro is Managing Director at PFS Europe
This will avoid paying £ 130,000 in VAT registration fees when exporting to the EU