By Danielle Amor, director in the commercial services practice at law firm Pannone Corporate
Never has it been easier to buy and sell online. With the click of a button, you can transcend territories, cross borders and purchase goods thousands of miles away from the comfort of your own home.
It’s hardly surprising, therefore, that global cross-border ecommerce sales are expected to rise by an average of 63 per cent year-on-year throughout November and December, following a 113 per cent increase in same-store global online sales during October.
As several countries, including the UK, have been put into various states of lockdown, the importance of targeting non-domestic markets for cross-border selling has become more important than ever, particularly for smaller retailers that are looking to remain competitive.
While the internet and social media have opened up a sea of opportunities for independent retailers, the ability to engage with larger audiences outside of the UK is not risk-free. So, what do online retailers need to do to ensure they’re crossing the Ts and dotting the Is when it comes to selling overseas?
Understand the legal landscape
Many businesses wrongly assume that compliance with laws in the UK means they can trade wherever they want to in the world. This isn’t the case when setting up a physical presence overseas, and unfortunately it’s no different with an online presence. Before making the move into Europe, the US or further afield, it’s essential to seek professional advice to ensure your business is set up to comply with local laws in the territories of your choice.
Key questions to consider include:
• Do consumers benefit from statutory rights in that territory?
• Are there any regulatory restrictions preventing the sale of your products into that territory (usually the case for medicines, food, cigarettes and alcohol, but also toys, cosmetics, nutritional supplements and electrical devices, for example)?
• Will you need to pay import duties or sales taxes?
• Do you need to offer payment in a local currency?
• Do you need to adapt the presentation of your website to make it suitable for those overseas customers?
Speaking the lingo
If you operate an English language website, consider providing a local language version for any non-English speaking countries you plan to operate in. This is particularly important for your terms and conditions which might not be effective if not translated.
Data is king
Little has been said about the implications a no-deal Brexit will have on the use of personal data, but the ramifications for businesses trading in the EU could be time-consuming and costly.
There are two immediate problems that would arise unless the UK is granted an “adequacy decision” by the European Commission: the first is that cross-border transfers of personal data from the EU to the UK would be restricted; and the second is that UK-based businesses without a physical presence elsewhere in the EU will need to appoint a representative to deal with GDPR matters on their behalf. It will cost British businesses to address these issues and ensure compliance with the GDPR when operating in the EU.
Achieving the winning combination
Competitions and giveaways are a great way to engage with consumers online and social media feeds are flooded with “too-good-to-be-true” offers at this time of year. However, the regulatory framework governing these offers is not harmonised even within the UK’s four nations, never mind elsewhere. Add to that the detailed and differing legal terms of each social media platform and these competitions can be quite complicated to run properly.
The fine print
Finally, don’t neglect your terms and conditions. It is critical that you set out what a consumer can expect when purchasing products from you and that this is in line with consumer laws in the applicable territory. You want to make sure that your terms are not too generous, as this could cost your business in the long run, but equally consumers will quickly shop elsewhere if you are not able to provide good customer service. While consumer laws are currently broadly harmonised across the EU and UK, making sales within the EU more straightforward, this may change if the UK decides to diverge from the EU post-Brexit.
Offering free returns may be affordable for UK customers, but you wouldn’t want to be responsible for return shipping costs from Fiji! A 14-day period for a customer to change their mind is currently required in the UK and EEA, but is this something you would want to offer consumers based elsewhere if it’s not a legal requirement? Also consider what is standard practice in your target markets and ensure you are not too far out of step with your competitors.
Moving online has never been easier or been more vital; trading online has never before offered as much opportunity; but with cross-border sales comes a host of legal and compliance considerations of which every business, large or small, must be aware. The secret is to start off small – focus on your key markets and set up your online shop to meet those overseas obligations, before branching out further afield.
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