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European Ecommerce Wants EU To Revisit Reforms
As you will remember, the EU implemented the EU Ecommerce VAT Package earlier this year. The package represented the biggest reform of Ecommerce VAT rules in a generation. However, many European ecommerce businesses believe that the rules need to be tweaked, especially in regards to the storage of goods. The calls for further reform have come from Ecommerce Europe and EuroCommerce, the two biggest branch organizations in Europe. So today we’re going to take a look at what they’re proposing and assess whether the proposed changes would benefit or hinder ecommerce sellers.
What Are The Current EU Ecommerce VAT Rules?
Earlier this year, ecommerce sellers saw the introduction of the One-Stop-Shop (OSS). From the 1st July 2021, rather than registering for VAT in every individual country in which they make sales, ecommerce sellers have been able to register for the OSS which allows them to submit a single VAT return quarterly, listing all pan-EU sales.
The service is open to sellers all over the world. To use the service, you simply have to be registered in at least one EU state. This makes a lot of sense and was originally met with a very warm reception from ecommerce sellers across the globe. So why are the European ecommerce organizations now voicing their discontent with the rules?
The European Ecommerce Organizations Believe That These Rules Should Be Expanded To Include Storage
The main reservation that the European ecommerce organizations have is that these rules do not include the storage of goods in multiple countries. As it stands, sellers need to register for VAT in every European country in which they hold goods. This means that businesses that offer fulfilment in multiple countries across Europe are not really benefitting from the OSS. It has been expected that this is costing these ecommerce providers an extra €8,000 per year.
Of course, this is also taking up a lot of time for sellers in the form of administrative and compliance costs. Ecommerce Europe and EuroCommerce believe that by expanding the current rules to include storage, the EU could save sole traders and SMEs valuable time and money in compliance costs. They also believe this will allow sellers to be more competitive in the current globalized ecommerce market. We find it hard to disagree with them.
Other Changes That We Might See
Those pushing for these reforms are hoping that they will be implemented before 2023. This is because 2023 will see the introduction of a new piece of EU legislation called the Digital Markets Act (DMA). This legislation is intended to curb the power of the digital giants such as Facebook and Google to allow for fairer competition in Europe.
However, ecommerce providers are already taking issue with this legislation. The DMA will be determining which companies are considered to be the biggest ecommerce players by monitoring the amount active end users each site receives. However, European ecommerce providers are already complaining that this may mean that more smaller providers will be targeted by the Act than intended, as they argue that active end users do not actually equal sales. They would rather the EU monitor conversions.
If You Are An Ecommerce Seller, We Can Provide You With Solutions
This an exciting time to be an ecommerce seller, but at the same time these constant rule changes can be distressing and confusing. Luckily, we are here to support you. Whether it is expanding your business to another country or you just need supply chain support, we at J&P Accountants have been supporting ecommerce sellers for years and can offer you a range of services.
If you are a business who participates in cross border ecommerce, we would be more than happy to help you register for VAT, file your VAT returns, and help you comply with VAT in case your account faces any issues. At J&P, helping your business is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the Coronavirus crisis and the busy festive period, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
Facebook To Launch New Delivery Service
Many ecommerce sellers are still reluctant to try and sell their wares on social media, despite the obvious advantages of access to a wide audience and quick click-through links. For the most part, vendors tend to prefer to sell through Amazon, with FBA contributing heavily to this preferences. With this in mind, ecommerce sellers should be excited to learn that Facebook is launching its own delivery service. This will hopefully convince more sellers to use the most popular social media platform in the world to their advantage. Here’s all you need to know about Facebook’s imminent postal service.
What Is Facebook’s New Delivery Service?
Anyone who has been selling on Facebook recently will know that the platform has been offering more shipping options. The new addition of the delivery service is definitely an exciting development in this field, but sellers should be aware that this service won’t be free. Unlike the services that have previously available, there will be a 2% service charge for sellers who wish to use the delivery service.
Facebook’s delivery service will be done through Hermes, whom Facebook have just made a partnership with. In order to use the service, sellers will have to drop the products off at a Hermes delivery pick-up point. Sellers don’t need to fear though, if they don’t wish to use this service Facebook will still offer the free collection option.
So Is The Service Worth It?
We certainly think so. Recent research from Yodel has shown that around 30% of UK consumers are planning to do all of their Christmas shopping online this year. This is a massive increase from the 7% that said the same the year before. When consumers were asked if they planned to use a hybrid approach to their gift shopping (online and offline) over 61% of those surveyed said that they would be taking this approach.
There is also evidence that social media shopping is on the rise. 61% of UK 18-25 year olds and 50% of 26-35 year olds have said that they have made a purchase after seeing an ad on social media in the last month alone. This is primarily through Instagram and Facebook. Thus, utilizing the Facebook delivery service could help you deal with orders from social media consumers.
But Is Facebook’s New Delivery Service Better Than The Free Collection Option?
The answer to this question comes down to personal preference, but we are seeing more and more consumers opt to buy from sellers that favour customer satisfaction over convenience. This trend is even more prevalent in the UK, where research has shown that consumers are more impatient than any other country. 81% of UK consumers say that they would look for another supplier if an item was out of stock or their delivery expectations were not met.
This is why this holiday season sellers should really be considering the best way to get their products to consumers. Supply chains are under more stress than ever, which wouldn’t be such an issue but consumers are concurrently more impatient than ever. Utilizing tools like Facebook’s new delivery service really could be the best way to ensure that sellers make the most of this holiday season.
If You Are An Ecommerce Seller, We Can Help You
Whether it is expanding your business to another country or you just need supply chain support, we at J&P Accountants have been supporting ecommerce sellers for years and can offer you a range of services.
If you are a business who participates in cross border ecommerce, we would be more than happy to help you register for VAT, file your VAT returns, and help you comply with VAT in case your account faces any issues. At J&P, helping your business is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the Coronavirus crisis and the busy festive period, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
Is The Ecommerce Surge Slowing Down?
Ecommerce sellers from all over the globe have enjoyed a surge in sales since the beginning of the pandemic. Whilst most experts predict that this is a trend that will continue for the foreseeable future, recent data has suggested that the staggering growth of ecommerce may be about to start losing pace. Today we’re going to take a look at the latest data and discuss whether ecommerce sellers should be concerned.
So, What Data Is Suggesting That Global Ecommerce Growth Is Beginning To Slow?
The Salesforce Q3 Shopping Index has published data from across the globe that has analysed the current state of ecommerce. Before you get too concerned, it is worth pointing out that whilst the data has shown that ecommerce growth is slowing, it is still growing nonetheless. Global online sales enjoyed an 11% growth in the third quarter of 2021.
This is obviously a positive development, but the only slight concerned is that this is a big drop from the 63% growth that sales enjoyed during the same period last year. Of course, on the face of things this isn’t the best news, but it would probably be unrealistic to expect ecommerce to continue growing at such an unprecedented rate, especially with countries currently recovering from the pandemic and brick-and-mortar stores reopening.
What Does The Data Look Like When You Delve A Bit Deeper?
Looking a bit deeper in the data, you can see that the results are differing depending on which country you’re looking at. For example, Netherlands are an interesting country to look at in Europe due to the staggering growth the country’s ecommerce industry has exhibited.
Dutch consumers are now shopping less from cross-border suppliers from the EU. In addition, the growth of Dutch online stores has also began to lose pace. This is obviously due to consumers returning slowly back to brick-and-mortar stores. On the other hand though, Dutch omnichannel sellers have recorded growth of 20% higher than last year.
Other countries are also showing varied results in other aspects. Whilst countries such as the UK and Netherlands are showing low rates of cart abandonment, Belgium are doing even better. They are averaging cart abandonment as low as 66% which is much lower than the global average.
So Should You Be Concerned?
The really simple answer is no. The truth is that ecommerce is still growing and will continue to do so. The decrease that research is currently displaying was inevitable. During lockdowns, consumers had no choice but to shop online in most cases. With brick-and-mortar stores reopening it was inevitable that ecommerce would see a slight drop off.
But it is clear to see that ecommerce will continue to be the strongest business model for sellers, and this will only increase as supply chains regain some of their resilience. Once again, we would like to encourage you adopt a omnichannel approach to your ecommerce business. This doesn’t necessarily have to be in the form of opening up a physical premises, but perhaps you should consider beginning to sell on an online marketplace such as Amazon. As we support many Amazon sellers, we can definitely help you out should you wish to go down this route.
If You Are An Ecommerce Seller, We Can Provide You With Solutions
Whether it is expanding your business to another country or you just need supply chain support, we at J&P Accountants have been supporting ecommerce sellers for years and can offer you a range of services.
If you are a business who participates in cross border ecommerce, we would be more than happy to help you register for VAT, file your VAT returns, and help you comply with VAT in case your account faces any issues. At J&P, helping your business is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the Coronavirus crisis and the busy festive period, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
How To Make The Most Of Alibaba Single’s Day
As the avid readers of these articles will have noticed, we have written quite a lot about Black Friday recently. Black Friday is one of the biggest dates in the ecommerce calendar so we won’t apologise for that. However, what we will apologise for is making the same mistake that countless Western ecommerce sellers make every year – overlooking Alibaba’s Single’s Day. Single’s Day (or double 11 as it’s sometimes known) is probably the biggest sales day in the world. However, as the event is primarily focused on China-based consumers, many Western sellers fail to capitalize on the opportunity presented by Single’s Day. That’s why we’ve put together this quick guide on Single’s Day, so you can take advantage of the giant sales event.
What Is Single’s Day?
Single’s Day is an event held yearly in China by Alibaba. The day is thought of as a kind of ‘anti-Valentine’s day’ and was initially created as a way to celebrate single people. This is why the day is held on the 11th of November every year as the date, 11/11, is meant to represent 4 single people (FYI, this is why the event is sometimes known as Double 11).
It is actually staggering to think that many people in the West have never heard of the Single’s Day considering the amount of revenue generated from the sales event. In 2020, JD.com and Alibaba (the two biggest ecommerce platforms in China), enjoyed record sales, with combined sales surpassing $115 billion. Another awe-inspiring statistic is that 800 million consumers participated in the event. In short, Single’s Day truly dwarves Black Friday.
So Why don’t More Western Brands Get Involved?
Traditionally, this is because China is just a harder place to import products and Chinese consumers tended to prefer local brands. However, this is all changing. Many Western brands, such as Gucci and Prada, are beginning to showcase products in China for the event. Indeed, $5 billion of Alibaba’s sales were from US brands.
In addition to this, this year looks set to be the first time that Western-based retailers attempt to hold their own sales for the event to their domestic consumers. ASOS have already confirmed that they will be holding a sale for UK and other European consumers on the 11th of November. So of course, the question now is: How can you get involved?
How To Get Involved With Single’s Day As A Western Ecommerce Seller
First step, partner with the local ecommerce providers
This might seem counter-intuitive, but the harsh reality is that you will be unlikely to make Single’s Day worth it for your business without partnering with one of the major Chinese ecommerce platforms. These platforms are so dominant that is basically means that all consumers will be glued to their web pages.
Alibaba is the most logical choice. We understand that it may seem daunting to attempt to partner with a foreign ecommerce provider but don’t worry, that is why we wrote a guide on how to get started on Alibaba which should help you get started.
Be aware of supply chain issues
Supply chains all over the world are obviously experiencing issues, but perhaps none more so than routes between China and Europe. This is because there is still lingering delays as a result of the Suez Canal blockage from earlier in the year as an unwelcome addition to the delays caused from the pandemic and the subsequent surge in ecommerce.
Whilst this means that it would be very difficult to get a large portion of your inventory to China, those of you who import your inventory from China could definitely look into the possibility of rerouting your products directly to Chinese consumers rather than importing them here, only to export them back. This would also obviously reduce logistics fees considerably.
Finally, be aware of the cutting edge marketing techniques on showcase at Single’s Day
If you can sell products at the Single’s Day event, something you have to be aware of is the vast array of technological marketing techniques that are on show. Livestreaming in particular has become particularly popular with Chinese consumers. It is also not uncommon for brands to use interactive videos or Virtual Reality to advertise their products.
Whilst this can sound daunting, we would encourage you to look into alternative forms in advertisement. You can easily find firms that can help you, and hopefully the chance to get creative and innovative is an exciting one to some of you!
So How Can We Help With Single’s Day?
As you may know, we at J&P Accountants have branches in China and serve thousands of Chinese ecommerce sellers. The fact that our network spans across China and the UK means that we have a unique insight when it comes to helping Western consumers expanding their business into China. If you have any concerns about dealing with the upcoming holiday season, we at J&P have the qualifications and knowledge to help you plan ahead, so please do not hesitate to get in touch should you have any further questions about selling on online, or if you need any help with adapting your business. We can get you VAT registered across the EU and can file your returns. Essentially, we sort out your tax so you can deal with selling your products. You can contact us at enquiries@jpaccountant.com, on our social media, or give us a call on 0161 637 1080.
Our Top 5 Black Friday Tips For Ecommerce Sellers
Black Friday is almost upon us and, if you ecommerce sellers have taken our advice, you’ve already been preparing. If you haven’t, don’t worry. There’s still 4 weeks until the big day. With this in mind, we thought now was a good time to give you some last minute tips on things that you should definitely be considering before Black Friday. Here’s our top 5 things for ecommerce sellers to consider before Black Friday.
1）Prepare Your Black Friday Sales
This one seems painfully obvious, but you would be surprised how many sellers think that putting a 10% sale on all of their products is enough to ensure they maximize their profits on Black Friday. The sellers who will benefit the most are those who hand pick which products they wish to offer a deal on and use more creative sale techniques, such as offering 2 for 1 on items that might be bought as a gift.
In addition, sellers should consider how they are communicating these sales to their potential customers. If you have a mailing list of previous customers, it might be an idea to send out an email detailing which products are up for sale. Ebay sellers could also take advantage of the coded coupon feature. For more information on this, checkout our article on Ebay coded coupons.
2）Ensure You Meet Your Customers Delivery Expectations
If you are in the ecommerce industry you are no doubt aware of the issues that supply chains all over the world are facing. Research has shown that 57% of consumers are open to buying products from across borders this Black Friday, but almost all of them are concerned about receiving their purchases on time.
Due to the issues surrounding deliveries that all ecommerce sellers are facing, it is vital that you make sure you are planning ahead and are ensuring that all your supply chains are as robust as they can possibly be. As for Amazon sellers, you need to make sure that you are aware of all the upcoming changes to FBA. If you haven’t already, you should definitely read our article on the upcoming Amazon FBA changes that are coming into effect before Black Friday.
3）Use Product Recommendations
Another area that is sometimes neglected by ecommerce sellers is upselling. If a customer is buying a product from you, chances are they might be interested in something else you sell. Recommending more products for customers to buy from you is a great way to sell more, and it also reduces the chances of delays as you can put all the purchases in one package.
On top of this, you should consider offering package deals for your customers. Rather than selling each item individually, maybe if they bought a hamper of products you could offer a discount price? If you are going to go down this route, just ensure that all the items in the hamper are related.
4）Start Your Black Friday Sales As Soon As Possible
I know you’re probably bored of hearing this from us by now so we won’t dwell on it, but it really is worth mentioning. Major retailers such as Walmart have already confirmed that they’ll be starting their sales from Monday. Ecommerce sellers should consider doing the same in order to keep up with the big retailers.
5）Make Sure To Offer Diverse Payment Options
This is yet another issue that many ecommerce sellers fail to address. Almost 15% of consumers say that they have backed out of a purchase recently at the last step because the seller doesn’t offer their preferred payment option. As we’ve stated before, PayPal is a must, and ecommerce sellers need to recognize that buy-now-pay-later options are becoming more and more popular.
Another thing to consider with this point is the fact that consumers from different places have different payment preferences. UK consumers and those from the Netherlands tend to favor PayPal, whereas French consumers seem to like mobile payments and buy-now-pay-later options. Sellers should ensure that they are fully aware of their consumers’ preferences and offer them accordingly. It could be the difference between making a sale and losing a customer.
So How Can We Help You This Black Friday?
Whether it is expanding your business to another country or you just need supply chain support, we at J&P Accountants have been supporting ecommerce sellers for years and can offer you a range of services.
If you are a business who participates in cross border ecommerce, we would be more than happy to help you register for VAT, file your VAT returns, and help you comply with VAT in case your account faces any issues. At J&P, helping your business is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the Coronavirus crisis and the busy festive period, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
The Most Important Points From The Autumn Budget
One of the standout quotes of Sunak’s budget announcement was “higher borrowing today means higher interest rates and higher taxes tomorrow”. This was no doubt a reference to the fact that the UK government has borrowed at a rate not seen since the Second World War in order to support the economy throughout the coronavirus pandemic. The issue that now faces the UK government is that they have to somehow find a way to support businesses through the backend of the pandemic, whilst also recouping some of the money that they borrowed without breaking their manifesto pledges of lowering taxes. Whether the Chancellor will succeed in this seemingly impossible task will remain to be seen. In the meantime, here’s our collection of the most interesting points from the Autumn Budget Announcement.
The Economy Seems To Be In Surprisingly Good Shape Post-Pandemic
The overall tone of the Autumn Budget announcement was much more positive than the previous Budget announcement in Spring. Sunak seemed to suggest that the economy will be back to pre-Covid levels by 2022. He also revealed that research has suggested that unemployment will peak at 5%, rather than the originally forecasted 12%.
What was slightly less positive was the fact that inflation will reach 4% by the end of this year. Unfortunately, this seems to be an issue faced by countries all over the world as everyone attempts to recover from the pandemic. In reaction to this, Sunak revealed that the National Living wage will be increased to £9.50.
Something else that the Chancellor seemed to be quite concerned about is global supply chain issues. The demand for goods around the world has increased since the pandemic and it is no secret that supply chains and the logistics industry is struggling to keep up. In order to try and support the logistics industry, Sunak announced that their will be a reform to the Tonnage tax for ships, who will now be rewarded for flying the UK flag. He went on to announce that excise duty for HGVs will be frozen.
Business Rates A Hot Topic
As we predicted in our earlier article, business rates were a hot topic. From the offset, Sunak squashed any hopes of abolishing the tax altogether, claiming that now was not the time to be getting rid of a tax that brings in roughly £25 billion a year. However, he did recognize the need for reform and has thus made some big changes to the tax.
Firstly, as we predicted, he has introduced an investment relief, meaning that businesses who want to improve their buildings for the good of the environment will not be charged more. This means that businesses can now add features such as solar panels without having to pay more in business rates as their building increases in value.
Another change he made was that any improvements made to a building, such as installing CCTV or air conditioning, would not have to pay anymore in business rates for a year. He also cancelled the business rates multiplier and, perhaps most importantly of all, he has slashed business rates for the hospitality, leisure and entertainment industries by 50%. This means that establishments such as pubs, restaurants and theatres will now have their business rates cut by 50%, up to a maximum of £110,000.
More Support For Hospitality Announced In The Autumn Budget
The Autumn Budget also saw more support for the hospitality sector in the form of a reform of alcohol duty. The Chancellor claimed that there will be more ‘common sense’ used when taxing alcohol, with the new system now taxing different drinks based on their alcohol content. This means that strong alcoholic drinks such as spirits will face higher fees than beer.
Also, from 2023 sparkling wine will face the same duty as normal wine. This is apparently in response to the increase in popularity of sparkling wine such as prosecco and champagne. 2023 will also see the introduction of a ‘Draught Relief’ on pulled pints. This has been introduced as research has shown that the way we consume alcohol has changed drastically since the last time the alcohol levy was changed, making the current rules outdated.
Conclusion – The Autumn Budget Mostly Positive
The announcement has been mostly positive for business owners. Of course, some will believe that the new measures don’t go far enough to support businesses, but considering the lingering effects of the pandemic we believe that the Autumn Budget will be met with a positive reaction for the most part.
Should you require any help when it comes to business rates or any of the issues discussed in this article, we can help. We help 100s of local businesses to ensure they remain tax compliant and we can do the same for you. Please feel free to contact us on enquiries@jpaccountant.com or give us a call on 0161 637 1080 to have a quick chat to find out how we can be of service to your business.
