Digital breakdown: the challenge to post-Brexit online sales

online sales

“The more things change”, it is said, “the more that they stay the same”.

In terms of international trade, that remains broadly true despite a series of notable changes over the course of recent years.

Many countries turn first to established partners and that has proven to be the case forIreland and the UK after Brexit.

Although there was much conjecture in advance of the withdrawal taking place about what it might mean for businesses on both sides of the Irish Sea, the full scale of any shift was relatively distorted, given that it took place with Europe and the rest of the world still impacted by the Covid-19 pandemic.

Nevertheless, a fuller and more detailed picture is now starting to emerge, thanks in part to the work of data authorities in both the Republic and Britain.

For instance, within the last week, the Office for National Statistics (ONS) has issued figures showing how the digital economy continues to expand.

In 2021, companies not in the UK financial services industry generated website sales with a value of £459.2 billion – an increase of £102.8 billion in the space of just two years.

Of the latest total, some £77.8 billion was accounted for by sales to customers outside the UK.

Perhaps unsurprisingly, the sector doing the greatest proportion of online trade is retail.

Yet the ONS publication provides an indication of challenges to further growth.

The most significant problem reported by e-businesses is the high cost associated with the delivery or return of products sold outside the UK.

Whenever UK overseas trade is discussed, it is only natural that the Republic of Ireland features. Even though it has a population less than one-tenth of that of the UK, Ireland is one of its bigger neighbour’s most important markets.

A report compiled by the House of Commons’ Library and released last December concluded that the Republic is, in fact, the UK’s fourth largest export market of all.

Further data from Ireland’s own Central Statistical Office (CSO) showed that the UK’s reliance on exports to the Republic increased by 55 per cent or €8.5 billion (£7.5 billion) between 2021 and the end of 2022.

That exceptional rate of increase could, of course, be influenced by Brexit and Covid or both. It has also occurred in spite of the difficulties which British firms say they’re now confronted by.

A survey by the Federation of Small Businesses (FSB) published last month showed that nine per cent of businesses had stopped imports and exports within the last five years.

Chief among their problems were the large volume of paperwork, costs and “supply chain or logistical issues”.

The costs and delays of sending goods overseas were also the two main issues cited by those who continue to export.

It’s important because, as the ONS noted, small and medium-sized businesses (ie, those with fewer than 250 employees) racked up £105 billion in online sales during 2021.

Barriers to trade, such as the customs and costs identified by the FSB, can have an impact on commercial prospects and – ultimately – people’s jobs.

Those companies which responded to the FSB questionnaire made simplification of the customs process one of their principal demands of the UK Government.

They are not alone.

Retailers of all sizes in the UK recognise the importance of swift, simple and secure shipments to Ireland, a country which is not only crucial to the UK but one of Europe’s fastest-growing e-commerce markets.

As a result, an increasing number of brands both large and small are turning to Coll-8 for help.

A customs clearance system which we created in-house has been a key factor in our success.

In the run-up to Christmas last year – the busiest period in the entire logistics calendar – we processed in excess of 60,000 customs declarations each day, many more times than the numbers handled by our rivals.

Our roster of UK-based clients continues to grow, as does our award-winning drop2shop platform for e-commerce deliveries and returns.

If you would like to find out more and see what Coll-8 can do for your business, get in touch.