Amazon warns UK retailers to plan ahead

Sellers should consider sending stock to European “fulfilment centres” or warehouse as stock currently in the UK may not be able to be sold to EU countries.

A recent warning by online retail giant Amazon indicates that Irish consumers and indeed EU consumer may experience difficulties buying products on the platform in the aftermath of a no-deal Brexit.

Reports in the UK last month say that Amazon is actively encouraging British businesses who trade on the platform to take significant steps to prepare for no deal to continue selling to EU consumers customers.

Irish Time reporter, Conor Pope, noted that: “The online retailing giant warned that no deal may temporarily prevent cross-border trade” (Irish Times, 18 Jan 2019). Pope continued that a “letter from Amazon said sellers should consider sending stock to European “fulfilment centres” or warehouse as stock currently in the UK may not be able to be sold to EU countries including Ireland”.

UK retailers have until St Patrick’s Day to stock inventory at an EU fulfilment centre. Amazon recommends a “minimum of four weeks of inventory coverage at all times”.

Autofulfil Fulfilment Centre in Ireland offers such a solution for tradres, the services that ecommerce stores need such as storage, pick and pack, shipping and kitting.

Regardless of what sellers choose to do, EU consumers that shop online with UK based retailers may very well experience a more challenging journey in the event of a no-deal Brexit.

Amazon is actively taking steps to mitigate the impact of a no-deal Bresxit. For example the US power-shouse has developed an English language version of its German store. In fact, the ecommerce website has gone one step further by reducing the price of many products, thus competing with their UK site. This presents an opportunity to boost in EU sales so UK and EU retailers should act on this insight.

A scenario whereby the UK out of the EU without a deal, EU shoppers could face hefty import duties because the UK will become a “third country”. So for the purposes of tax the UK will in effect be categorised the same as the US or China.

Chairman of the Irish Revenue Commissioners said that “if an Irish shopper buys online from a UK-based business it will be exactly the same as if he or she were buying from a US-based business”, post-brexit.

Two obvious implications are a) prices may climb and b) stock availability may be a problem for UK-based retailers, however a third threat is that consumer protection is also at risk.

Under EU law, EU consumers have significant protection when shopping online within the EU. These EU rules state that consumers have a 14-day cooling off period and the right to a refund for non-delivery, damaged goods or a delayed order.

If the UK leaves the EU without a deal in place, EU retailers won’t be covered by EU law when buying online from the UK, that is that these rules may no longer apply.

UK eCommerce retailers and indeed B2B product providers based in the UK but selling, supplying and shipping product to EU markets must seriously consider a contingency plan and act soon to protect their business while maintaining SLAs.

Contact our dedicated team to explore your options on: +353 1 541 5460.

David & GeorgeAutofulfil