When your brand is dominating the U.S. market and your month over month growth is shattering all expectations, what’s left to do? Take your brand global, of course! And selling in the U.K. might be just the place to start.
Why, you ask? Well, you don’t want to leap into the global market willy-nilly and just pray for the best. You need a plan. The first step in formulating that plan is to decide which countries are ripe for global expansion. There’s a short list of no-brainers, and the savvy e-commerce entrepreneur knows to start there.
Topping the list is the United Kingdom—primarily because it’s the largest online retail market in Europe as of 2018. In fact:
- Online spending increased 15.3% since last year, and now 18.2% of all money spent with U.K. retailers is online.
- The average U.K. consumer shops online six times per month, with 25-34 year olds the most active, shopping online eight times a month.
- 51% of U.K. consumers would rather shop online than in-store
For U.S. e-commerce brands wanting to go global, the U.K. is the perfect first choice—especially when you consider there are no language barriers between you and your potential customers.
However, as with any new market, there are country-specific laws, rules, and regulations you’ll have to follow to ensure you’re doing business legally. Learn the rules, but don’t get complacent—remember that laws are always subject to change. You’ll need to stay up to date with regulatory changes in order to protect your business.
What about Brexit?
Glad you asked. There are unknowns in the U.K. market due to its plan to exit the European Union. The U.K. isn’t in a strong position for its negotiations with the EU since it chose to leave. As a current member of the union the U.K. enjoys strong bargaining power, but it will likely lose that power in its exit negotiations.
According to Flow.io, this might work in the U.S., Canada, and Australia’s favor. The U.K. will be looking to negotiate friendlier trade deals to make up for losses that result from the country leaving the European Union. But Brexit is a topic that deserves its own in-depth article, so for now let’s focus on what you need to know to start selling and shipping to the U.K.
What do U.K. consumers look for?
According to 2018 research, the most important factors U.K. consumers consider when choosing which site to buy from are:
- Product cost (58%)
Like everyone else, shoppers in the U.K. are always looking for the best deals. Keep your prices competitive, but also consider the next point below.
- Free delivery and return options (57%)
People love free shipping. A report from Advantec revealed that consumers are willing to pay more for a product if delivery is free than purchase the same product when the total cost of the product plus delivery fee is actually lower! When selling in the U.K., it pays to price your products a little higher and offer free shipping.
- Search functionality on the website (29%)
63% of consumers said they are less likely to make a purchase if the site search isn’t good and they can’t find what they’re looking for.
What do U.K. consumers purchase online?
This chart from Statista shows where U.K. consumers are spending the majority of their money when shopping online. Statista reports that the share of people purchasing in the categories of Clothes and Sporting Goods and Household Goods has been increasing in recent years.
Opportunities to Sell More
Not everyone knows exactly what they want to buy when they go to an online store. That presents online sellers with opportunities to upsell and cross-sell.
- 13% of U.K. consumers know exactly what product they want to buy every time they visit an e-commerce website
- 42% know only some of the time.
- 66% of shoppers in the United Kingdom like to browse often or every time they shop
- 33% of shoppers want brands to suggest products options
You can take advantage of this by making customized product suggestions for each customer based on which products they’ve browsed or purchased before.
Duties and taxes when selling in the U.K.
If you’re a U.S.-based seller selling in the U.K., you’re considered an overseas seller; i.e., you don’t have a business establishment in the U.K. but are using online marketplaces to sell to U.K. consumers. Overseas sellers are required to register for U.K. VAT (value added tax). Brexit could change this; however, the U.K.’s the goal is to continue closely mirroring EU regulations.
Check out the official U.K. government site to find out your VAT obligations if you use an online marketplace to sell goods in the U.K. Deciding to ignore VAT when selling internationally can have huge consequences for your business.
Starting 29 March 2019, if you are based outside the U.K. and sell goods to U.K. buyers that are worth £135 or less, you must pay import VAT. If the U.K. leaves the European Union with no deal, the rules on paying this VAT will change: visit this website to learn how.
If you’re considering global expansion of your e-commerce brand, the U.K. is a great place to start. Online sales are trending upwards, and the preference for shopping online over in-store is growing every year.
Need help getting started? We suggest you choose an order fulfillment partner with fulfillment centers in Europe to keep shipping costs low and delivery times fast. With its Netherlands-based warehouse, Simple Global could be the perfect choice. Contact us today to see how we can help.
DISCLAIMER: This article is for informational purposes only and is not to be interpreted as legal advice. Please consult independent legal advice for information specific to your circumstances.