2021 will be a very interesting year for company’s supply chains as the unprecedented disruption that we saw in 2020 meant that there was huge amounts of innovation in logistical technology. On top of this, new challenges face suppliers such as Brexit and the unpredictability of the pandemic and lockdowns. If you are the owner of a small business you might not be able to implement every single one of the trends mentioned in this article, but it is still worth bearing them in mind as they highlight the difficulties that you will face this year, and may also inspire you to come up with your own solutions.
1. Ecommerce Will Not Slow Down
Ecommerce has been one of the business buzzwords of the last 12 months. The lockdowns have meant that more people than ever have flocked to online retailers to purchase their goods. Subsequently, ecommerce providers have competed to give the best delivery options and now customers expect speedy, efficient deliveries. It is vital you keep up, so you might want to consider building relationships with 3PL logistics and courier companies to handle such demanding customer requirements. Whilst customers will likely understand some unavoidable issues, ultimately they will buy from the most reliable vendors.
2. Disruptions And Problems Will Continue
Whilst vaccines are being rolled out as quickly as possible, it is clear that the implications of the pandemic will continue to affect supply chains throughout 2021. It is also likely that Brexit will be impacting your operations to some degree. The best thing to do is to make your supply chain options as flexible and adaptable as possible by making contingency places so you can implement necessary changes quickly and effectively. As for Brexit, the changes to customs and Amazon fulfilment will undoubtedly be a nuisance to some of you reading this. Be sure to contact us via our social media for advice on this topic.
3. Digitalising Processes
The digitisation of your processes could certainly make your supply chain more efficient. New IoT systems and Blockchain technology are likely to be extremely popular in 2021. These two technologies have the potential to solve important glitches in traceability and provenance challenges, especially when used in combination with each other, since they allow certain elements of your supply chain to work automatically.
4. Artificial Intelligence and Analytics
Artificial Intelligence technologies can allow companies to ingest massive amounts of historical and real-time streaming data, clean and prepare it, and see if applying machine learning or AI algorithms and techniques to that data will provide valuable predictions for their business. In the supply chain realm, leading supply chain software companies are actively working to embed existing applications with AI and machine learning. For most companies this is a less risky and more cost-effective way to access the capabilities of AI. Whilst this seems daunting, some cheaper, simpler forms of the technology, such as Amazon Forecast, are with considering.
5. Robotic Automation
Reports have already surfaced this week detailing how the UK warehouse industry should begin adopting more robotic technology. Whether this be in the form of automated retrievals or self-driving trucks, 2021 will likely be the year where this technology truly comes into its own. Whilst it does sound like it is from a bad sci-fi film, don’t be put off. The implementation of this technology will certainly stream line your supply chain and so even if you can’t afford it yourself, it might be worth attempting to partner with other companies for a segment of your supply chain (such as a courier service or a modern warehouse) in order to take advantage of this technology in 2021.
Whilst maintaining a supply chain may seem impossible in 2021, don’t forget we can help.
At J&P, we have helped countless ecommerce sellers, so please do not hesitate to get in touch should you have any further questions about improving your business operations, or if you need any help with adapting your business’ supply chain. You can contact us at firstname.lastname@example.org, on our social media, or give us a call on 0161 637 1080.
Readers of this blog who follow our twitter will be aware that some retailers, most notably Tesco, have been calling for a digital tax to be placed on online retailers. The government had considered implementing such a tax last year, but eventually decided against it. However, the pandemic has bought the discussion up again for two reasons; firstly, because brick-and-mortar stores are arguing that the forced closures of their stores has given online retailers an unfair advantage, and secondly because the government needs to find a way of recuperating the money that it has borrowed to support businesses and individuals throughout the pandemic. But is a new tax a good idea?
The Argument For
Well, the first thing to consider is whether the revenue from a digital tax would actually be significant enough for it to be worth it for the government. Non-food online retail has expanded from 31% to 46% of all UK online ecommerce in 2020, and this growth is what has caught the governments’ eye.
As it stands, the government are proposing that the tax be set at 2%. This would theoretically bring in £2bn annually for the UK government. Considering that the government have borrowed an amount that is comparable to the amount they borrowed for the Second World War, it is clear that £2bn would definitely be helpful.
In addition, it is easy to see where brick-and-mortar retailers are coming from. Not only do they have to pay rent for the property they occupy, they also have to pay business rates for merely renting property of high quality. These costs obviously don’t affect ecommerce sellers and brick-and-mortar shops believe this represents an unfair advantage.
The Argument Against
However, it is still not clear that a digital tax is a good idea. The most compelling argument against the implementation of a digital tax is the question of who would actually pay the tax. The biggest ecommerce sellers such as Amazon and Ebay wouldn’t be greatly affected by the tax, since a lot of what they sell (or, in Ebay’s case, all of what they sell) is sold by a small business or individuals using their platform. This would result in added costs and administrative work for small businesses.
Moreover, even these small businesses would be unlikely to shoulder the tax; it is much more likely that the cost would just be passed on to the consumer. In this case, these small businesses are likely to see a decrease in sales or the customers, some of whom are the elderly and vulnerable who have been forced to shield, will be forced to pay extra. Considering how weak the economy is at the moment, this doesn’t seem a good plan of action.
Also, brick-and-mortar retailers should be careful what they wish for. It is becoming increasingly clear that retailers will have to adopt an omnichannel approach to their business in order to compete in a market that is becoming increasingly digitalised. Whilst they are calling for the digital tax to serve their short-term interests, it could come back to haunt them in the future.
Furthermore, if part of the reason that the digital tax is being considered is in the aim of benefitting the brick-and-mortar retailers, surely the better course of action would be to review business rates. Indeed, there have already been rumours of replacing business rates with a “capital values tax” that would be based on the value of land and the buildings on it. This tax would be paid by the owner of the property rather than the business leasing it.
All this being said though, it is still likely that some form of tax will be introduced. Another avenue the government are exploring is a delivery tax, which would likely fall on online retailers or the delivery services they use. Make sure to keep an eye on our social media in order to keep up to date with all the VAT developments.
At J&P, we can offer invaluable VAT advice to ecommerce sellers in the UK and EU. If you are an ecommerce seller, we just want to let you know that we have the qualifications and knowledge to help you plan ahead, so please do not hesitate to get in touch should you have any further questions about logistics and supply chain management or selling on online marketplaces. You can contact us at email@example.com, on our social media, or give us a call on 0161 637 1080.
This blog has noted many times how the pandemic caused an explosion of ecommerce in 2020. People being forced to stay inside and the closure of brick-and-mortar stores left consumers with little choice but to turn to alternative forms of acquiring goods, more times than not resulted to them turning to ecommerce. What we haven’t really touched on though is the domino effect this has had on the logistics industry. Increased demand for products and the subsequent competition from retailers to offer the best and fastest service has led to a record £35 billion being invested into logistics in Europe.
The Effect In Numbers
The aforementioned figure of £35 billion is the highest level of investment for seven years. Research data, analyzed and published by Comprar Acciones, shows that last year 38.64 billion euros was spent on investments in ecommerce logistics. Moreover, leasing activity in Europe increased by 69 percent last year which covered agreements over that equated to roughly 11 million square meters. Among those who signed leases in 2020 were Amazon, DHL, SF Express and XPO Logistics
By the end of the year, warehouse vacancy rates in Europe were down to a record 5 per cent. Alibaba, Amazon and third-party logistics service providers were among the key players driving up demand for European warehouses. The clamour for warehouses was likely caused by the severe supply chain challenges faced by all ecommerce providers. By stocking warehouses early, these providers were prepared to deal with the relentless demand for ecommerce.
The Major Contributors
It’s no surprise that the Amazon and Alibaba topped the list for those who drove up the most demand for European warehouse space. Alibaba handles cross-border ecommerce transactions primarily via its Cainiao logistics arm as well as AliExpress. During the 4th quarter of 2020 both Alibaba and Cainiao saw revenue increase by over 50%, which is a staggering amount.
Meanwhile, for Amazon, there were over 1 billion international product deliveries during the quarter. This resulted in their revenue surpassing $125 billion in the fourth quarter alone, the first time they have surpassed $100 billion in any quarter.
The rest of the world also followed suit. A study made by eShop World states that almost 70 per cent of consumers globally made cross-border ecommerce purchases in 2020. China, a front runner in the market, had an increase of 31.1 per cent in cross-border ecommerce to RMB1.69 trillion (USD261.5 billion). To keep up with the increase, there was a surge of 80 per cent in overseas warehouses, bringing the total to over 1,800.
It seems clear that 2020 was a landmark year for ecommerce and the logistics industry.
At J&P, we can offer our warehouse services to ecommerce sellers in the UK and EU. If you are an ecommerce seller, we just want to let you know that we have the qualifications and knowledge to help you plan ahead, so please do not hesitate to get in touch should you have any further questions about logistics and supply chain management or selling on online marketplaces. You can contact us at firstname.lastname@example.org, on our social media, or give us a call on 0161 637 1080.
One of the main themes of coronavirus from a business viewpoint has been the massive boost to ecommerce. As lockdowns have forced many people to shop online rather than visit stores and the lack of opportunities to go out has meant the majority have had a little extra money, we have seen ecommerce sales sky rocket. Indeed, 2020 saw ecommerce sales surpass £220 billion and cross border sales rise 57%. With lockdowns looking likely to be around for a while longer and more people participating in ever before, there has never been a better time for you to invest in your ecommerce channels. Here are 5 things that you should bear in mind when adapting your ecommerce system for 2021.
1) Omnichannel Selling A Must
The rise in ecommerce has coincided with consumers accessing products from more channels than ever before. One example of this is the sheer number of devices people are now using to access products. It is no longer enough for you just to have a desktop website, as people will use mobile phones, tablets, voice controlled products and even televisions to access your products. Indeed, 30% of online shoppers are likely to abandon their carts in the middle of shopping if they find out that your website is not mobile-friendly.
It’s not just consumers’ devices that are diverse though, it is also the places that they are finding products. Consumers will now use a combination of your website, social media and elsewhere to access your products, so it is worth getting your products visible in as many places as possible. This brings us nicely on to the next tip…
2) Make The Most Of Marketplaces
The competition online is just as fierce as it is on the high street. That means that you need to ensure your customers buying experience is as easy as possible. Companies such as Amazon and Walmart have the experience and infrastructure required to satisfy today’s customers. Furthermore, other niche marketplaces such as Etsy continue to grow to accommodate new digital entrepreneurs.
These marketplaces also have incredible delivery capabilities that you can take advantage of. Thus, you should definitely have listings on marketplaces in order to diversify your channels for success in 2021’s ecommerce. If you are currently selling on marketplaces, or planning on doing so soon, read our article here that details all the recent changes sellers on Marketplaces face.
3) New Technology
Part of the reason that online marketplaces are so good is that they have access to all the newest ecommerce technology which can be vital in maximising your sales. One such technology is Artificial intelligence (AI), which acts as your online in-store associate by offering personalized guidance and recommendations to your customers. AI uses shoppers’ past purchase history and browsing behaviour to show them products they are more likely to purchase.
It is also likely that analytics capabilities will grow in 2021, enabling you to have a clear picture as to what your customers want and when and how they want it. You should definitely not shy away from implementing new technology to your site this year.
4) New Payment Methods
The technology of payment methods is moving rapidly. As of now, most ecommerce businesses accept digital wallets (like Google Pay, Samsung or Apple Pay, and PayPal) apart from debit and credit cards. However, ecommerce in 2021 will see even more services become popular.
Services such as Klarna which offer buy-now pay-later services are becoming increasingly popular. We might even see customers lean slightly more towards cryptocurrencies. Cryptocurrencies, especially Bitcoin, have many benefits for online shop owners, such as low transaction fees and no reverse transactions.
5) Don’t Forget Brexit
The implications of Brexit will be one of the major obstacles facing ecommerce sellers this year. Most obviously, this will be because of the new customs procedures making cross-border commerce more difficult. On top of this, the UK have implemented new rules on selling through online marketplaces (rules which the EU will also be implementing in July 2021) which you will need to adhere to.
Luckily, we’ve got you covered, you can check out our guides on importing and exporting post-Brexit to give you an idea of what you need to do in order to expand your business, and get you selling overseas as quickly as possible.
At J&P, we have the qualifications and knowledge to help you plan ahead, so please do not hesitate to get in touch should you have any further questions about selling on online marketplaces, or if you need any help with adapting your business to comply with the new post-Brexit legislation. You can contact us at email@example.com, on our social media, or give us a call on 0161 637 1080.
You might be surprised to find out that the UK government loses an estimated £9 billion in tax every year. This clearly indicates the flaws in the current tax collection system and is concerning; not least of all because of how much the UK government have had to borrow in order to give businesses support throughout the coronavirus pandemic and will have to find a way to recoup some of that spending. Thus, the HMRC announced the implementation of a new completely digitised tax collection imitative called Make Tax Digital (MTD). This was announced in 2019, and whilst businesses were originally given until April 2020 to implement the new system (the time they were given to implement the system is what we are referring to as the ‘soft-landing period’), this was extended to April 2021 in order to help businesses through the pandemic. This deadline is now fast approaching, so it seems a good time to fill you in on what you need to do before April 2021.
What Does Make Tax Digital Entail?
Essentially, the government want the process of submitting tax returns to be completely digital. This does not just mean the submission itself, but also the gathering of the data itself. This means it will no longer be acceptable to copy and paste data (other than for the original creation) and send it off, the HMRC now want you to use systems that enable the recordings of your purchases to be recorded directly into your tax returns.
Up until this point, you will not have faced any penalties for failing to implement this form of tax reporting, but this is what is changing from April 2021.
These ‘systems’ that you need to implement are called digital links.
A ‘digital link’ is a transfer or exchange of data that can be made electronically between software programs, products or applications without the involvement or need for manual intervention.
From April 2021, the HMRC will now require automated digital links between any software program, product or application used in the process of preparing a VAT return.
This does mean that there will need to be a digital link from when a transaction is first recorded on a digital format all the way to the digital submission of the VAT return figures to HMRC. Fundamentally, you need to be able to establish a clear digital journey from data source to VAT return submission.
If this seems like quite a daunting task don’t worry, you have a couple of options. Firstly, you could attempt to comply with the new regulations yourself. There are a few systems out there that you can get yourself and attempt to utilise. However, these can be difficult to use and you must ensure you get to grips with them before the deadline.
The other option, of course, is to use an accountancy service. You may still comply with the new MTD rules by sending your spreadsheets to an accountancy firm and letting them handle the issues posed by MTD.
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 firstname.lastname@example.org, on our social media, or give us a call on 0161 637 1080.
It has been just over a month since the end of the Brexit transitional period so it seems a good time to ask how the implementation of one of the most complicated and controversial trade deals of all time has gone so far. Depending on who you ask, you are likely to get wildly conflicting answers, but we will try give you the overview so you can make your own mind up.
Undoubtedly, the biggest issue many have had with Brexit so far is the new customs regulations. As the UK is now considered a third-country, suppliers have had to acquire an additional EORI number (since they now need one for both the UK and the EU) as well as additional licenses in some circumstances.
Further, since the UK and EU can no longer approve items for importing/exporting on behalf of each other, this has meant that goods have to be verified twice. This is obviously quite problematic for some products, especially agricultural ones as they need to be moved quickly in order to maintain freshness.
Even now, one month on, those who export agricultural products such as fish and meat are reporting delays of up to several days and up to 71 pages of paperwork for one shipment. Whilst some of the delay time can be put down to the fact that businesses simply aren’t familiar with the paperwork as of yet, it would seem that some form of simplification will need to be implemented in the near future.
At least in the mainland of the UK there hasn’t been empty shelves at that supermarkets like some expected. Unfortunately, the same cannot be said for Northern Ireland…
Northern Ireland and its dual status of being simultaneously in the UK and the EU bloc was always going to cause some confusion; however, not many could have predicted that it would be this problematic.
Some food supplies and online shopping deliveries from Great Britain to Northern Ireland have been subject to delays, which has caused supermarkets being severely under-stocked and some of the food perishing. The staff carrying out inspections at the border have reported threats from aggrieved lorry drivers and extremely high tension.
Matters were not helped when the EU threatened emergency controls of Covid vaccine exports on the Irish border – a move the bloc later withdrew.
Part of the problem is that suppliers who wish to export to Northern Ireland are required to get yet another EORI number. This has caused a number of customs forms to be incorrectly filled in. Still, it is becoming clear that this cannot continue and the UK and the EU have already begun talks to fix the problems at the border.
Consumers are also feeling the stress of Brexit, as shown by the amount of reports of people being told they owe more money upon the delivery of their goods – some such circumstances have seen consumers be told they need to pay over £80 to receive the item they have already paid for.
This is mainly down to EU and UK companies attempting to shift the customs duties and VAT obligations on to their consumers as they struggle to maintain profits with all the new costs to import across the border.
To avoid these costs, many businesses have opted to maintain an inventory in both the EU and the UK, but of course this is not an option for all businesses, especially smaller ones.
All Doom & Gloom?
Whilst the first month has not gone smoothly, it certainly could’ve been a lot worse. To change the regulations of importing between two factions that enjoy such an immense amount of trade was always going to be difficult. Moreover, once the EU introduce their VAT package later in the year the rules for the EU and UK will become more aligned and should make it slightly easier for businesses who are involved in cross-border trade.
In addition, aside from the trade the UK government have announced in the last couple of days that they are going to be implementing their new subsidy system, which they claim will give businesses across the nation a huge boost. So whilst the first month has not necessarily been a success, there is hope yet.
At J&P we specialise in helping cross-border traders comply with VAT obligations and we are vastly experienced at working with ecommerce sellers. Should you need to register for UK or EU VAT or trademarks, or need any help with customs procedures we would be more than happy to help you.
Contacts us today at email@example.com, or give us a call on 0161 637 1080.