The Brexit guide for marketplace merchants

The Brexit guide for marketplace merchants
Enterprise Nation
Enterprise NationEnterprise Nation

Posted: Tue 23rd Feb 2021

Brexit has landed. This guide by Dan Wilson provides merchants selling on the likes of Amazon and eBay with an immediate and practical guide to keep on selling. It has a particular focus on international trade and the impact of the no tariff Brexit deal that came into force at the turn of the year.

A significant number of every day issues have now been clarified but even the UK government says that the new arrangements will require businesses to make changes and "bumpy moments" are inevitable.

The first priority is to keep your business going with despatches continuing unhindered. But it's also vital to look ahead at how you can develop the international aspect of your business and grow profits by trading with the EU and beyond.

Crucially, this guide has a focus that isn't common elsewhere. Much of the generic help and guidance available is targeted at what they call "exporters". These are typically firms and organisations with many staff and considerable resources. The UK government definition of a small business is one with fewer than 250 employees.

That doesn't sound like a typical online marketplace enterprise. (Although, let it be known, there is no such thing as 'typical' business in ecommerce.) It's not uncommon to find a multi-million pound turnover marketplace business with a small team operating from modest premises.

Even in the age of Brexit and COVID-19, all problems are surmountable and this guide will help you carry on selling, shipping, growing and thriving in 2021.

Tip: Your first stop should be the UK government's Brexit checker. If you haven't taken the quiz, check it out.

Context: Brexit, COVID and the ecommerce peak of 2020

'Twas the night before Christmas 2020, when a post-Brexit trade agreement between the EU and the UK was heralded with a 1200 page document. The process of formal approval from all stakeholders was secured with little more than a day to spare.

But what's the big deal?

From a marketplace seller and international trade perspective, there can be little doubt that any sort of deal was preferable to none at all. And it is very good news that a 'zero tariff' settlement was found. That means that there will be no duty or taxes levied (except with a very few exceptions) moving between the UK and the EU. There will be additional export paperwork for marketplace sellers but it need not be crushingly onerous.

The lockdown boost to ecommerce

Formal agreement came at the very end of no ordinary year. The coronavirus pandemic will have long-standing ramifications and one of those will certainly be the transformation of ecommerce and online retail. It was a year that saw ecommerce and marketplace sales flourish.

The 2020 'peak' was the biggest ever

The end of the Brexit transition on 31 December 2020 would have been tumultuous enough coming immediately after the traditional ecommerce peak comprising of the Cyber Weekend, Black Friday and seasonal shopping. But it burst through all records in terms of scale thanks to the COVID boost. The 'golden' fourth quarter is always busy and then followed smartly by a January dominated with dealing with returns, mopping up customer service problems and taking stock of what the experience taught your business for this year.

And add the December border chaos

Royal Mail and other carriers stopped accepting goods heading out of the UK and a massive freight backlog built up at the busiest time of the year. Even in the days after Christmas, many carriers would not take new consignments and reports of WISMO (Where Is My Order) queries from shoppers were unusually high in December. Even items shipped in a timely manner, earlier in the month, have reportedly yet to be delivered.

First priority: Keep fulfilling orders

With continued coronavirus restrictions in place in the UK and abroad, demand for online retail has not dissipated.

The end of the transition period meant that Great Britain left the single market and customs union when it ended on 31 December 2020. Northern Ireland remains within both the customs union and single market and, as a result, marketplace merchants based there will have slightly different arrangements which are considered later in this guide. It's important to be very clear about these terms. The UK is the four home nations. England, Wales, Scotland and Northern Ireland. Great Britain or GB excludes Northern Ireland.

What hasn't changed?

When it comes to fulfilling marketplace sales and despatching orders under the Brexit deal, you won't experience much of a difference on many (if not most) of your transaction despatches.

All these despatch scenarios are 'business as usual':

  • If your goods and business are based in the UK, then you can send the products you've sold on marketplaces within the UK without any changes or customs declarations.

  • If you are shipping goods from the UK (GB and Northern Ireland) to Non-UK destinations outside the European Union then there will be no immediate changes to the way you operated in 2020.

  • There is no change in requirements for sending goods from Northern Ireland to EU destinations.

What has changed?

There are changes when:

  • Fulfilling orders to the EU from GB from 1 January 2021. Specifically, customs forms.

  • Be warned: some of the courier firms (including Hermes and DPD) have signalled that there will be changes to the parcel terms of service between GB and Northern Ireland for the foreseeable future.

Customs declarations for GB goods going to the EU

All despatches from GB to the EU will require a customs declaration. As a marketplace seller, you are classed as an exporter when shipping to international buyers. But it's worth remembering that this is an easy process if your merchandise is worth less than 1,000 EUR. You will only need a CN22 or CN33 document.

That's just one of those little green forms that you can get at the post office that you'll likely be familiar with already. But there's no need to go and grab them you can print them out from the Post Office website.

Use CN22 for consignments worth up to £270 and CN23 for parcels valued above that.

It's more than likely that you're generating postal labels and despatch notes using third party software already and most of these will simply enable you to input the customs data within the sales flow. It could use the integrated workflow available in third party marketplace software (such as Linnworks or ChannelAdvisor) or perhaps your despatch management system (using Royal Mail or a courier) to generate your customs declaration.

In the vast majority of cases, if you send your parcels by post or courier from GB to the EU using Royal Mail or Parcelforce Worldwide then you won't need an EORI number. So for marketplace sellers sending handful of weekly parcels to the EU, you just need the basic information required for a customs declaration.

Wait! What's an EORI number?

You've probably already got one if you trade internationally but if you haven't, apply for one immediately. You can do that here. The anecdotal evidence is that the UK government is very quick to provide new EORI numbers.

It stands for Economic Operators Registration and Identification and you will need one for larger export consignments. Including one on all your despatches to the EU will do you no harm and may even mean your parcels move more quickly through the customs system.

Importing stock for sale on marketplaces

If you are importing a stock consignment from the EU, or indeed anywhere, you'll need an EORI number and other information such as a Commodity Code and an accurate valuation of the goods you are importing. The documentation you previously needed for imports from outside the EU (from China for instance) will now apply to imports from the EU. There may be tariffs payable on imports from outside the EU. This workflow from the UK government gives you a full official, overview of what you need to know.

The other two priorities for marketplaces sellers

Now we're in 2021, marketplace merchants will find that their attentions are directed at two other priorities which are unrelated to Brexit but will be impacted it.

Ecommerce commentators have dubbed these two problems: 'shippageddon' and 'returnageddon' and many online retailers will have experienced increases.


The COVID-19 crisis of 2020 saw international supply chains disturbed as they struggled to cope with a sharp increase in demand and the changed circumstances. One particular stress was the sudden and immediate need for trillions of items of PPE to be manufactured and distributed worldwide. This was compounded by the people flooding to shop online because of lockdown measures.

A sharp increase in freight costs means there isn't enough existing capacity and that has seen rising prices from most freight carriers. National mail services and couriers have struggled to keep up with consumer demand and the result is Shippageddon.

(The problem in the UK was further compounded by the Dover logjam in the week before Christmas that caused delays well into the New Year.)

If the anecdotal evidence is to be believed there are still a great number of seasonal purchases somewhere in the system. This has meant an increasing number of WISMO (where is my order?) inquiries.

As a marketplace seller the best you can do is keep on top of the enquiries, reply with tracking information as applicable and encourage shoppers to follow the marketplace rules and (depending on how late the despatch is) suggest shoppers sit tight and be patient. Pre-written replies will help you stay on top of WISMOs. Disputes will be adjudicated in the final instance and you may be forced to refund delayed orders.


January is the peak month for online retail returns. The whole month is busy but the first week of the month sees the majority of returns. This is simply because November and December see the most dispatches so, inevitably, the peak in sales will see a peak in returns. and no Peak has ever been as big as 2020.

It is also important to check the various marketplace policies. For example, for this peak, returnable items purchased on between 1 October 2020 and 31 January 2021 must be accepted as a return by third party (3P) merchants until 28 February 2021. Like WISMOs and items not received, your approach to returns will be almost entirely dependent on the relevant marketplace policy. Final adjudication will again fall to the marketplace in the event of a dispute.

Selling on online marketplaces after Brexit

Other issues will be of concern to marketplace sellers but may be less pressing:

Amazon FBA: The impact of Brexit

In 2020 Amazon announced changes to the Pan-European FBA (Fulfilment by Amazon) programme. Pan-European FBA enables thousands of businesses to sell across Europe easily and at a lower cost. Amazon distributes and stores products in fulfilment centres throughout Europe, in the countries you select for storage and at no additional cost to you. With products stored closer to customers, fulfilment is faster for customers and cheaper for businesses.

Now Amazon's UK FBA operations have been split from the EU with no more EFN (European Fulfilment Network) and an end to Pan-European FBA inventory transfers between the UK and EU. Essentially, sellers have to split their inventory between UK and European Fulfilment Centres. This may require you to ship your products across the new UK-EU customs border and provide additional information as part of a customs declaration. Amazon has published details in the 'Brexit Bible' section of Seller Central. Full details are available on Amazon's Brexit hub.

eBay and the Global Selling Programme

There's a useful Brexit hub available for your perusal on eBay.

One very useful feature of eBay that's available to all sellers on the marketplace is the Global Seller Programme and if you want to keep shipping your eBay sales overseas, it's an easy option. All you need to do is switch it on in My eBay and then eBay will market your products to international shopper. But the magic is that you just need to ship the product to a UK warehouse and eBay will do the rest. (They organise the international shipping and charge the buyer accordingly.)

With Brexit, eBay now says you need an EORI number even if you're a hobby seller. It seems likely that these rules will change in the weeks to come so we urge you to check on the latest info related to GSP at the eBay Brexit hub if you use the service.

Currency exchanges: Explore the options

The period since the 2016 referendum has seen significant turbulence for sterling (GBP) on the international money markets. The comparative value of the pound against the euro has taken a notable hit over that time. Brexit could signal a return to improved rates for sterling.

Even if you're making relatively few sales, and repatriating what might seem like small sums, there is always an opportunity to maximise your returns by engaging FX (foreign exchange) currency specialists.

They offer all manner of services when you're moving money across borders but there are three significant benefits to point out:

  • You will most likely get better exchange rates from them than either your bank, marketplace or payment processor (PayPal, Adyen etc) will offer you. Even when you consider the extra fees you might pay.

  • Forward contracts are a feature of currency FX firms whereby you can lock in a preferential exchange rate for use at a future time. So, if you're buying in stock to sell on marketplaces, you can plan and make decisions with a fixed exchange rate.

  • Expertise: if you need advice on major transactions, an FX specialist company is in a strong position to give you insights and many publish useful daily reports on trends that can help you inform decisions.

VAT on cross border shopping: Low Value Consignment Relief

As of the start of 2021 the Low Value Consignment Relief scheme was removed from goods arriving in GB from outside the UK. Previously, VAT wasn't levied on goods worth £15 or less but now it will be and the online marketplaces will be responsible for collecting that VAT where the sale happened on their platform. You can find out more here.

Marketplace sellers based in Northern Ireland

Northern Ireland remains within both the single market and customs union. Not all the arrangements regarding postal and courier despatches have been decided. The latest information can be found here.

If sending products from GB to NI between the start of 2021 and 1st April 2021, there will be no change but after that it's possible there may be customs declarations required. Clarification is expected in due course.

If you're a merchant in NI sending sales to the EU, there is no change and no customs declaration is necessary.

If you're sending goods from NI and GB, in the first instance (and for most sellers), there should be no change. The government has promised NI businesses "unfettered access" to the GB market. But clarifications and changes are expected in 2021 and some items that you have imported for sale from outside the UK may be impacted.
It is crucial, if you are a marketplace merchant based in Northern Ireland and shipping to GB, that you sign up to the Trader Support Service for advice.

International VAT

As a merchant selling internationally you are liable to file VAT returns with the countries you sell into and this hasn't changed with Brexit. It's possible that, as a smaller merchant, making relatively few sales, that you have been sending the goods into the EU without fulfilling your obligations as an honest oversight.

With customs declarations now required as standard for despatches from GB in to the EU, it's going to be less easy to stay under the radar if you're sending a small number of consignments, possibly as a side hustle of hobby business.

The marketplaces can help you with guidance on VAT and, in the case of Amazon who work with VAT specialists Avalara, the whole operation can be automated for a fee. In any case, it's a complicated area that calls for expert advice.

What Brexit does demonstrate is that there is no real reason to prioritise the EU over other international destinations for your sales. English speaking destinations, especially the USA, might have seemed more hassle than the EU before 2021, but now it represents an equal opportunity and huge audience with exactly the same red tape as, say France. See also Canada and Australia.

Marketplace returns from abroad

How you approach returns when selling internationally using the marketplaces is largely determined by the marketplaces themselves. Amazon requires that you accept international returns as a matter of course but eBay is less stringent.

If you are operating on a smaller scale, organising cross border returns on an ad hoc basis is an entirely manageable approach. But larger operations will need more structure and will likely benefit from professional help.

When it comes to overseas returns, it's often the case that taking each and every return back individually will prove to be unsustainable and loss making. That's why finding a returns partner can help. They will aggregate your returns overseas and send back when you have a pallet load or sell them again locally to recoup your expenses. There are numerous options available.

Rules of origin

An important aspect of the Brexit deal are the new rules of origin requirements and these will determine whether, in some cases, the so-called tariff free deal really is as described. In some circumstances you will be liable to pay import duty and tariffs when despatching products to the EU from UK. (Slightly different arrangements now exist for Northern Ireland.)

You don't need to worry about the rules of origin requirements if:

  • The items you sell and ship to buyers in the EU have been made or manufactured wholly in the UK by you or someone else.

  • The products you sell have been made from components or materials imported from outside the EU that have been "sufficiently worked or processed".

Where you might run into problems with the Rules of Origin regulations as a marketplace seller are if you import goods for sale from outside the EU, say China, and just sell them on without changing them significantly. (A good rule of thumb is whether the final product you are selling has a different HS code from the original materials or components you used.

As an example, imagine you import some wool from India and knit a jumper, you will have "sufficiently worked or processed" the wool and the finished jumper will have a different HS code. You would be able to send this to the EU without falling foul of the rules of origin rules.

However, if you import a ready made woolly jumper from China and stitch a patch or design onto it, it remains a jumper and has the same HS code and would therefore be subject to tariffs.

If you're selling white label products imported from outside the EU, that you simply sell on, then you almost certainly will need to take further advice about the rules of origin.

Why is this important?

Obviously, in the first instance, a pleasant shopping experience is vital for customer satisfaction. If you fail to comply with the new rules, your shoppers might be subject to a duty payment on delivery. That means paying the duty due.

And they would be justified in rejecting the delivery and then the consignment will wing its way back to you DDU (delivery duty unpaid). This will attract a fee from your carrier or Royal Mail and may also be considered a breach of policy by the online marketplace so it's best avoided.

Whilst some leeway is permitted between now and the end of the year, the rules came into force on 1 January 2021 and you may need to supply the authorities retrospectively with proof as necessary, so it's worth getting it right from the get go. More information is available here and here.

Review your carriers and couriers

One thing that the opening weeks of 2021 have seen is disruption to the supply lines and fulfilment services. Some providers, DPD included, suspended services to the EU altogether for a while and it seems that disruption will continue as the dust settles. So reviewing your postal and courier services on an ongoing basis is a good idea. Firms will adapt in due course.

And if you intend to ship overseas more post-Brexit then it might be worth considering options that mean holding your stock overseas. International fulfilment from within the EU might make the export less stressful and competitive. And some freight forwarders have services honed to marketplaces sellers trading cross border.

Other Brexit impacts for small businesses

Over the past 50 years or so many aspects of business have seen EU influence and regulation. This includes things like business travel, Intellectual Property rights, HR and hiring EU nationals as well as data protection (GDPR). These are concerns for all sorts of businesses, not just those trading on online marketplaces, and Enterprise Nation has ongoing and updated guidance through the Brexit Advice Service and in this post.

Go global for growth after Brexit

Two possible disaster scenarios for international marketplace merchants thankfully didn't materialise in December 2020. We don't have either a tariff deal with the EU or a 'no deal' hard Brexit that would have seen cross-border trade on WTO terms that would have been difficult to navigate.

The tariff free arrangement now in place means that you can carry on selling with little disruption. It will mean some additional paperwork for Amazon and eBay sellers which can be integrated into your operation and, needless to say, the rest of world is still out there too. If the politicians are to be believed, this is an opportunity for British business to look out into the word a trading nation and start selling globally like never before.

The major benefit of trading overseas is the increased addressable market. There are 70 million people in the UK and 7 billion in the world. By opening up your marketplace sales to international a buyers, you greatly magnify the potential number of customers that can buy your products.

The obstacles to embracing the global opportunity remain broadly the same, regardless of Brexit:

  • International tax compliance is difficult and sometimes costly. Specialists are available and the marketplaces themselves are doing their best to make it easier for merchants to comply.

  • Language, currency and cultural barriers remain and, as is typical in the ecommerce space, suppliers have merged to support international trade.

  • And the carriage of products, shipping (and returns) is the physical challenge that exists. It's possible to get anything to anywhere - if the price is right. In this competing arena, there are always new postage and courier options. The stress that the pandemic has put international supply chains under, alongside the surge in online shopping, will hopefully be a spur for shipping innovation.

But it's the challenges and difficulties that make international trading all the more satisfying and potential more lucrative. The vast majority of online merchants find it bewildering and stick to domestic trade. That's great news for adventurous marketplace sellers.

Future challenges to international marketplace sales

Considering recent trends in ecommerce and the digital industry, there are two possible challenges on the horizon that international marketplace sellers might become subject to in future.

National protectionism

As has already been even in Australia since 2019, the government there has applied taxes to cross border imports, and specifically items bought online, to protect its local businesses. It remains to be seen if other countries will take similar steps. But it seems likely.

Embrace international trade with Enterprise Nation

We encourage you to make 2021 the year you take your marketplace and online sales overseas to shoppers who want to buy quality goods and love British brands and start-ups. And remember that Enterprise Nation can help you on that journey with stacks of advice and experts who can help you go global. Join as a member today.

Enterprise Nation
Enterprise NationEnterprise Nation
Enterprise Nation has helped thousands of people start and grow their businesses. Led by founder, Emma Jones CBE, Enterprise Nation connects you to the resources and expertise to help you succeed.

You might also like…

Get business support right to your inbox

Subscribe to our newsletter to receive business tips, learn about new funding programmes, join upcoming events, take e-learning courses, and more.