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3 Ways China Is Shaping Global Ecommerce
Chinese ecommerce has exploded over recent years. This is partly due to the rate at which their economy is growing, but it is also undoubtedly a result of their innovative selling techniques. When one stops to consider the origins of many ‘new’ Western ecommerce selling techniques, it is quite easy to see how China have coloured the ecommerce landscape. We’re going to take a look at 3 of these innovations and suggest ways in which you could incorporate them in your own operations to increase ecommerce sales.
1) Constant & Varied Customer Service
When it comes to customer service, China are still ahead of the Western world. The kind of investment in customer service that we have seen as a result of the pandemic has been commonplace in China for some time. Chinese consumers expect rapid responses to enquiries or complaints regardless of the hour.
In addition to rapid response times, Chinese ecommerce providers tend to offer many different channels through which their customers can get in touch. One of the most common examples of this is WeChat, the huge networking service (very similar to WhatsApp). Many Chinese customers prefer to use this to contact businesses rather than conventional methods.
This has already been seen to have been reflected in the West with the increase of Live Chat options and WhatsApp/Facebook communication options. This hasn’t become wide practice as of yet, but sellers would do well to stay ahead of the curve and incorporate these channels as soon as possible.
2) Gamification Of Ecommerce
Anyone who has followed ecommerce for any length of time will now that ‘gamification’ has been a buzzword in the industry for years. If you aren’t sure what this means, it is essentially the incorporation of game mechanics into the buying process. This could be done in many ways, such as adding an element of luck into the purchasing process or giving rewards for purchases.
This has been commonplace in China for a long time and it has proven to be very successful; this is now being reflected globally. You only have to look at the amount of retailers that offer ‘lucky dip’ boxes with an assortment of products, or the leadership system that is based on reviews, such as Uber giving their customers and drivers ratings.
This can seem a daunting task to implement game mechanics into your selling process but it is actually easier than you think. Even as simple as allowing Facebook to give badges to your followers such as ‘Top Fan’ for those who comment and share on your content the most can encourage more interaction and exposure to your page and brand.
3) Shopping Festivals & Shopping Days
You are undoubtedly aware of Black Friday and Cyber Monday, but did you know that this selling technique actually originates in China? One of the biggest examples is ‘Singles Day’. Set up by Alibaba, the event was started as sort of a joke, as it is the antithesis of Valentine’s Day. However, this is now an annual event that is one of the most lucrative shopping events in the world.
Amazon have had similar success with Prime Day. Set up to celebrate the 20th birthday of the company, the sales weekend draws in millions of consumers each year. Many believe this was inspired Chinese retailer JD.com’s 618 that was started to celebrate their own anniversary 5 years earlier.
Whilst you may not be large enough to start your own global sales event, adding one to your calendar that attracts your regular buyers could be a good way to increase your sales and also grow loyalty to your brand from your consumers. Furthermore, it would be even easier for you to just make sure you had a strategy in place to make the most of the sales days such as Black Friday. These events get bigger each year with more and more consumers flocking to online stores.
If you need any help, we have provided a guide to preparing your business for Black Friday and Cyber Monday.
So, Are you Going To Get Inspired By China?
As you can see, Chinese innovation is clearly pushing the envelope when it comes to ecommerce. Hopefully this article has inspired you to try out some of these selling techniques. If you require any assistance when it comes to expanding your ecommerce business, let us know.
If you are a business who participates in cross border e-commerce, or importing of any kind, we would be more than happy to help you register for an EU and UK EORI number. We can also help you register for UK VAT, the UK VAT deferral scheme, file your UK and EU VAT returns, and help you comply with VAT in case your account faces any issues.
Everything You Need To Know About MTD Software
If you are a business owner or trader, you will likely be aware of the UK government’s Making Tax Digital initiative. The initiative is basically aimed at making the UK tax process completely digitalised. This will make the process easier and will also reduce the chance of fraud and missed payments. However, there have been some complaints from taxpayers as the HMRC have not created or released a software that taxpayers can use in order to comply with the new legislation. That’s why we thought it was a good idea to take a look at the kind of software that will be required, and also some good examples of software that you can use.
Brief Background For MTD Software
If you want a detailed explanation of Making Tax Digital (MTD) you can check out our article on the topic by following the link.
But, in order to understand the purpose and usefulness of the software we’re going to be talking about, it is important to have a little context. As stated in the introduction, the aim of MTD is to make the whole tax system digital. In order to do this, the UK government are now requiring businesses to implement a way of electronically recording their sales and then sending them directly to your tax returns records.
Despite the implementation of MTD being delayed due to covid, a lot of businesses have already been required to implement this form of reporting into their sales. At this point, businesses with an annual turnover of £85,000 and above have had to sign up for MTD. The deadline for everyone else is April 2022. By this point, all businesses and trader should have adopted Making Tax Digital software and should be reporting their VAT returns digitally.
Records You Must Keep Digitally, According To HMRC
HMRC have provided the following list for records you must keep digitally:
You need to keep the following records digitally:
- your business name, address and VAT registration number
- any VAT accounting schemes you use
- the VAT on goods and services you supply, for example everything you sell, lease, transfer or hire out (supplies made)
- the VAT on goods and services you receive, for example everything you buy, lease, rent or hire (supplies received)
- any adjustments you make to a return
- the ‘time of supply’ and ‘value of supply’ (value excluding VAT) for everything you buy and sell
- the rate of VAT charged on goods and services you supply
- reverse charge transactions – where you record the VAT on both the sale price and the purchase price of goods and services you buy
- your total daily gross takings if you use a retail scheme
- items you can reclaim VAT on if you use the Flat Rate Scheme
- your total sales, and the VAT on those sales, if you trade in gold and use the Gold Accounting Scheme
What Does The Software Do?
Fundamentally, the software will allow you update and store your records digitally. The software will be able to pull information directly from these records and then communicate directly to HMRC. Clearly, this will mean a lot less administrative work for you.
If you are already using some form of bookkeeping product or merely just using spreadsheets, you can also use bridging software. As suggested by the name, bridging software allows you submit your information via software that is not compatible with MTD.
Good Examples Of Available Software For Making Tax Digital
As you might expect, a lot of the usual suspects are present when looking at the best accounting software for MTD. QuickBooks, Xero and SAGE have been the most popular so far, and which one you decide to use depends on your business.
For example, Xero is a cloud based software that is very useful for bigger businesses. However, it does not yet connect with all UK banks, so you would have to check whether your bank is supported. QuickBooks has access to all banks, but it’s cheaper options, such as their starter pack, have quite limited features and would be more suitable for a smaller soler trader.
Make sure to check the features of each software thoroughly before signing up. HMRC have conveniently provided a list of available software, which you can find here.
What About After That?
After that, it is time for you to sign up for MTD and begin submitting your returns digitally. It is recommended that you then employ an accountancy service to ensure you are VAT compliant. With an accountancy firm, you can even still comply with the new MTD rules by sending your spreadsheets to them and let them handle the issues posed by making your tax digital, without the need to use the software.
That’s where we come in.
J&P is a registered accounting firm in the UK. We have the qualifications and strength to help you plan ahead, so please do not hesitate to get in touch should you have any further questions about this policy, or if you need any help with submitting your VAT returns. You can contact us at enquiries@jpaccountant.com, on our social media, or give us a call on 0161 637 1080.
Our Guide To Trading With Northern Ireland Post-Brexit
Whilst many of our previous articles on importing and Brexit have touched on Northern Ireland, we haven’t yet provided a full guide. Northern Ireland has been a point of confusion for many traders since Brexit as the rules of importing and exporting from the country are unique. The continued dispute over the Northern Ireland Protocol, which we covered earlier this week, is adding further uncertainty for sellers. Despite the presence of some specific rules for specific products are extremely complex, there are some basic rules that you need to be aware of when trading in or out of Northern Ireland. Here’s an outline of these rules and how to apply them to your operations.
You Will Need An XI EORI Number When Trading With Or In Northern Ireland
If you are moving goods to or from Northern Ireland you will need an XI EORI number rather than a GB EORI number in order to ensure that these transactions can be separated from UK transactions.
If you are unsure what an EORI (Economic Operator and Registration Identification) number is, you can find our article on the topic here. In brief, it is an identification number that you will need to get goods through customs. Through this number, the HMRC are able to keep track of all your transactions.
Usually, British sellers would have one that begins with GB. However, you will need to obtain a ‘XI’ one in order to move goods to and from Northern Ireland. This number must be present on all your relevant customs forms. The HMRC should have automatically given a code to all traders they believed would need one. If you need one and have not already received one you should contact the HMRC.
Where Is VAT Due When Trading With Northern Ireland?
This is another issue that traders have faced when it comes to dealing with the Northern Ireland Protocol since Brexit. Depending on who is buying the products and where the buyer is located will change the VAT implications.
Northern Ireland & GB
If the goods or services are moving between the UK and Northern Ireland they are still considered to be UK domestic transactions. Thus, the VAT is owed to the UK. This also includes B2B transactions.
Northern Ireland & EU
In the case of Northern Ireland and the EU the transactions of goods and services are considered to be intra-community transactions, just like with any other two EU member states.
The above is the result of the dual status that Northern Ireland enjoys as a result of the Northern Ireland Protocol.
What Is The Northern Ireland Protocol?
In brief the Northern Ireland protocol was the mechanism employed by both the EU and UK in the Brexit negotiations in order to protect the Good Friday Agreement. Essentially, the agreement attempts to allow Northern Ireland to be considered both inside the UK and the EU simultaneously.
You can find more information on the Northern Ireland Protocol and the Good Friday in our last article. As the issue is still being debated by the UK and the EU, it is unclear how the result of discussions will affect the way traders will have to trade with Northern Ireland.
Trader Support Scheme
The trader support scheme is an initiative that has been set up to support you with navigating the Northern Ireland Protocol. The Trader Support Service can help your business adapt to the changes. The service is free to use and offers comprehensive education, training and advice about the changes to the way your goods move under the Northern Ireland Protocol.
It can complete customs and safety and security declarations on your behalf where these are required for movements between Great Britain and Northern Ireland so you do not have to access HMRC systems directly.
The service can be invaluable to traders, and you can sign up for the trader support scheme here.
How Can We Help?
If you are a business who participates in cross border ecommerce, or exporting of any kind, we would be more than happy to help you register for UK VAT, the UK VAT deferral scheme, gain an EU, UK and XI EORI number, file your UK and EU 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 Brexit, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
The Northern Ireland Protocol Debacle Continues…
Regardless of whether they were a remain supporter or a Brexit supporter, almost everyone was relieved when the drawn-out negotiation process was finally brought to a close. However, anyone who believed that this would signal the end of the drama was sorely misinformed, or at the very least, very optimistic. Since signing the agreement, the most hotly contested issue seems to be the Northern Ireland Protocol, with the EU even going as far as to open legal proceedings against the UK. Since this issue doesn’t seem to want to go away, now seems a good time to look at what the Northern Ireland Protocol is, why the UK and the EU can’t reach an agreement, and how you can continue to trade with Northern Ireland.
What Is The Northern Ireland Protocol?
At it’s core, the Northern Ireland protocol is the result of the efforts of the UK and the EU to honour the Good Friday Agreement, which cemented Northern Ireland’s place as independent of the UK. Of course, the Good Friday Agreement gives Northern Ireland an interesting position as being both within and outside the UK simultaneously.
Thus, when it came to Brexit, the UK and the EU formalised this dual-status that Northern Ireland holds by creating the Northern Ireland (NI) protocol. This meant that Northern Ireland had to maintain the food standards set by the EU in order to allow free trade to continue between the EU and NI.
However, as non-EU countries must have products inspected before they arrive into the EU, this meant that NI had to check the food products that were entering from the UK. Some products, such as chilled meats, are not permitted to enter at all.
So How Has The Disagreement Come About?
The main source of the disagreement has been regarding the products which are not allowed to enter Northern Ireland. Under the protocol, which, as the EU are keen to point out, the UK agreed to, chilled meats can not be transported from the UK to Northern Ireland.
In order to allow for adjusting, there was a grace period that was scheduled to end at the end of June – this has now been extended until the end of September, much to the dismay of the EU.
What Is The View Of Both Sides?
There is hope for an amicable solution, as both sides concede that the protocol does not work in its current form. However, the disagreement is over how to solve the issue.
The EU have suggested that the rules be tweaked in order to make the protocol more easily applicable. They have also suggested implementing a Swiss-style agrifood agreement, which would likely see the end of a lot of the Northern Ireland checks.
On the other hand, the UK are requesting a complete renegotiation of the deal. Whilst they have said they are not ready to incur Article 16, which states that either party can suspend parts of the Brexit agreement if it is causing sufficient difficulty, they have made it clear that they would be willing to do so if a new agreement cannot be reached.
As it stands, the EU have paused legal proceedings.
How To Trade With Northern Ireland?
The processes for Northern Ireland are extremely complicated – so much so that you can expect a full article on the topic very soon. However, the main aspects are if you are a UK based sellers and sending goods to Northern Ireland your usual UK VAT will be owed.
If you are moving goods between NI and the EU, you will need an EORI number that begins with XI rather than GB. To obtain one of these you must already have a GB EORI number. HMRC should have automatically issued these to traders who they believe will be in need of one.
As previously stated, the rules are too complicated to compile them all here. However, you can expect an article on the matter on Friday, so be sure to be check back on our website then.
Conclusion – Northern Ireland Protocol Will Be Solved, But It Is Not Clear How
There is no doubt an agreement will be reached, and the EU halting legal proceedings is definitely a good sign, but it is still not exactly clear what the exact outcome will be. Please feel free to get in touch if you have any further questions.
If you are a business who participates in cross border e-commerce, or exporting of any kind, we would be more than happy to help you register for UK VAT, the UK VAT deferral scheme, gain an EU and UK EORI number, file your UK and EU 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 Brexit, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
What Is The Outlook For European Dropshipping?
Regular readers of these posts will remember how we recently took a look at the problems that UK dropshippers could face following Brexit. Essentially, the abolishment of the low consignment relief has meant that UK sellers who use the dropshipping business model will now struggle to maintain profit margins as the price of importing small products has risen. Considering that the EU have also abolished their low-consignment relief, you would be forgiven for thinking that dropshipping would also be suffering in Europe. However, it seems that dropshipping may actually still be viable in Europe…
Why Are The New Regulations Affecting European Dropshipping?
The main thing affecting dropshipping is the increased price of importing goods from outside of Europe. As of July 1st 2021, all imported good are subject to VAT. Previously, goods that were less than €22 in value were not liable for import VAT so it was easy enough for sellers to ship a small product from outside of the EU and sell it on to an EU consumer for a profit. With the new rules this is now extremely difficult.
Dropshippers are then put into a tricky situation. Unless they increase the prices of their products, they are unlikely to be able to maintain profit margins. However, if they do this, they will probably lose customers and business. So, what can they do?
European Alternatives
Typically, European dropshippers have gotten their stock from Asia. Whilst this will obviously be much more expensive now, there is still the option of using dropshipping platforms based in Europe. These platforms will likely now represent a more attractive option when it comes to dropshipping in Europe since they hold stock in Europe. This means that sellers will obviously not have to pay extra fees to import their stock.
Furthermore, this might actually be better for consumers. It is likely that consumers will suffer less from issues that can arise from problems with paperwork or customs delays. Since EU countries can trade freely amongst themselves, EU based dropshippers who opt to use European platforms will be able to move products cheaply and quickly across Europe.
Does This Benefit UK Sellers In Any Way?
Unfortunately, this is unlikely to benefit small UK-based dropshippers. Of course, they can use the same tactic when it comes to selling in the UK, but since the UK is no longer in the EU, using European platforms will not really help them when it comes to selling to UK consumers.
However, UK sellers who are operating in Europe or those who wish to do so in the future could benefit from registering for VAT in a European country and then using the European platforms. However, to offset the cost of establishing themselves in Europe, these sellers would likely have to be confident of making sales on an extremely large scale.
Need Help With Dropshipping in Europe?
If you are a business who participates in cross border e-commerce, or importing of any kind, we would be more than happy to help you register for an EU and UK EORI number. We can also help you register for UK VAT, the UK VAT deferral scheme, file your UK and EU 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 this post-Brexit period, so please do not hesitate to give us a call on 07734 182821 or send an e-mail to enquiries@jpaccountant.com.
Sustainable Packaging Has Never Been More Important
Sustainable packaging is a buzzword in ecommerce and logistics, and for good reason. Ensuring your delivery packaging is eco-friendly is not only good for the environment, but it is also encourages increased brand loyalty as the impact ecommerce is having on our environment is creating more and more wariness in consumers. Whilst the ‘green approach’ was gaining momentum this time two years ago, the panic of the pandemic and the issues surrounding supply chains meant that retailers and sellers became less concerned with packaging, and more concerned with ensuring they had enough stock to keep up with the massive increase in demand. However, as the pandemic begins to tail-off, those who turn their focus back to the sustainability of their operations quickest stand to gain the most.
Why Is Sustainable Packaging Important?
The most obvious answer is the impact that non-biodegradable plastic can have on the environment. In the UK alone, research found that supermarkets used around 900,000 tonnes of plastic packaging in 2019. This, coupled with the fact that UK homes recycle plastic far less than they do metal or cardboard, is a huge issue.
On top of this, it can be a massive waste of money to your company. Spending endlessly on packaging that can only be used once is not financially beneficial. This is likely why many companies are now looking into ways of reusing their packaging, to get more value for their money.
The Other Benefits Of Sustainable Packaging
However, it is not only the environment that you should be considering. By adopting a more eco-friendly approach to your packaging, you will almost certainly gain more brand loyalty and awareness.
Surveys of USA consumers have shown that 70% consider sustainability important and 47% even went as far to say they would spend up to 25% extra on a product if it was sustainable.
Clearly, consumers are concerned about their carbon footprint and will bear this in mind when making decisions on what products to buy. As the ecommerce industry becomes more crowded by the day, little changes such as the sustainability of your products and packaging can really make you stand out.
One of the easiest ways to reduce the amount of waste resulting from your packaging is simply to use smaller packages. By doing this, you will likely save storage space and money on shipping costs. The lower fees at customs will certainly add up quickly.
Some Examples You Should Consider
We’ve already mentioned using smaller packaging, but there are other ways of ensuring your packaging is more sustainable. The most obvious way is to change the material of your packages. Whilst options were limited in the past, sellers now have access to more material options than ever before. Whether it be recycled material, plant based materials, or even edible ones, there are a lot of materials that you can use instead of plastic.
There are even less drastic steps you can take. Many vendors use too much packaging throughout the supply chain when moving their products from A-B. Take a look at your own products; do you really need the package to be double-wrapped and bundled up? Reducing the layers around your product is an easy way to make yourself more sustainable immediately.
Another easy way for you to make your operations more sustainable is to educate your consumers. You can do this through brand messaging on social media or even in the form of instructions on the packaging, but just ensure you are making it easy for your consumers to recycle or reuse your packaging.
The Imminent Plastic Tax Makes Sustainability Even More Urgent
UK sellers should be even more eager to reduce the amount of plastic used in their packaging as April 2022 will see the introduction of the new Plastic Packaging Tax. The government have said of the tax:
“The aim of the tax is to provide a clear economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging, which will create greater demand for this material. In turn this will stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.”
This will surely act as an extra incentive for UK merchants. Find out more about the incoming plastic tax by following the link.
Should you require any assistance, don’t forget that our long history of working with ecommerce sellers, especially those who use Amazon and eBay, means we offer expert advice when it comes to your processes.
Please do not hesitate to send us an e-mail at enquiries@jpaccountant.com or contact us through social media to receive a quote today for our support with all your tax needs or logistic support. In addition to our logistic and ecommerce services, we would be more than happy to help you register for UK & EU VAT and file your UK & EU VAT returns, and help you comply with VAT in case your account faces any issues.
