Brexit is provoking a lot of uncertainty in cross-border e-commerce all over the world. There are three possible scenarios- but what will happen is unknown. How to prepare your e-commerce for business after Brexit. https://www.ecommerce-nation.co/brexit-mean-crossborder-ecommerce/

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What will Brexit Mean for your Cross-
Border E-Commerce?
Author: Alexandre Grela

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Technological Innovations
Brexit shook up the EU market in several industries. With e-commerce booming
across the Schengen Zone, many people asked what would happen in cross-
border e-commerce. Let’s examine three possibilities, and how to prepare:
Soft Brexit
Mid-range Brexit
Hard Brexit
The EU represents about 50% of the
UK’s imports, and the UK represents
17% of the EU’s imports.

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Soft Brexit
While a soft Brexit doesn’t seem likely, if it does happen, it will result in the UK joining the EEA
(The European Economic Area)
The UK would pay an access fee
They would agree to all legislation passed by the EU
They would need to respect the 4 freedoms
The would need to accept the jurisdiction of the European Court of Justice
If this were happen, not much would change for UK sellers or other EU sellers moving products
into the UK.

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Mid-Range Brexit
A Mid-range Brexit would lead to an EFTA-style (European Free Trade Agreement) situation and
negotiations would likely take nearly a decade to complete. This would act as a safeguard to EU and
UK sellers until the negotiations were finished.
The UK won’t be able to pick and choose which parts it wants to follow
The EU wouldn’t grant passporting rights to the financial services industry
The UK would be granted access to the EU VAT area

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Hard Brexit
A Hard Brexit means that the UK would now be following WTO (World Trade
Organization) rules:
Application of tariffs up to 30%
Product norms could change, leading to the necessity of two different
products.

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What will this mean for your E-Commerce?
Many EU & UK businesses won’t be affected- obviously those who sell significant products to the UK
and vice versa may be a lot more affected. EU sellers will have 27 other partner countries to fall back
on, whereas UK sellers may need to refocus on local markets.
Laws & Regulations: Likely to be a transitional period for everyone to adapt, regulations may
apply up to 4-5 years after Brexit is negotiated.
Supply Chain Management: Could be a major issue, as EU companies could source products from
anywhere in the EU. Brexit may disrupt these processes due to borders.
Trade Relationships: With the implementation of tariffs, levies, and the end of passporting rights
will definitely have a significant impact on trade relationships.

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Cross-Border Transactions
With cross-border e-commerce, Brexit may prove tricky in terms of VAT as the
UK may no longer be in the EU VAT area nor the Customs Union. In this case,
cross-border transaction VAT will be paid in the country of supply, thus making
products more expensive.
This is likely to impact larger players in the e-commerce industry, like Amazon.

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Conclusion
While Brexit won't be taking effect for another few years, it’s important to prepare yourself,
regardless of what side of the border you happen to be on.
Check out more of Alex’s articles:
How to Make Multilingual Search Work for E-Commerce
Are Micro-Markets a Good Opportunity for Cross-Border E-Commerce?
More on Brexit:
How to Adjust your E-Commerce to Brexit’s Side Effects
Read the
Full Article
Here

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Contact us
Whitney Blankenship
International Director
whitney@ecommerce-nation.co
Alexandre Grela
Founder of Europa DSI
grelaalexandre@gmail.com