Spring and Brexit: doing your duty

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Keeping customers satisfied is a critical concern for all retailers.

You want to sell great products and provide the kind of service excellence which makes consumers come back for more.

As a cross-border specialist working with hundreds of leading businesses, Spring knows that the way in which your goods are delivered is an important part of the customer journey.

Getting it right can help build brand loyalty. Getting it wrong can lose you customers, even if what you sell is the best around.

Changes as a result of Brexit mean that all retailers have more to think about when engaging with consumers at the online checkout.

Not so simple

Packages shipped to or from the UK from the first of January next year will all have to pass more stringent customs procedures.

Much more detail is required about the items being sent - what they are, what they're made from, their origin, value and weight - and where they're being delivered to.

That's because that information will be used by customs authorities to determine how much taxes and duties should apply on top of the basic delivery charge.

Deciding who pays those duties can provide either reassurance or a nasty surprise on the doorstep for your customers.

Delivered Duty Paid (DDP) or pain?

There are two duty payment methods to consider.

The first is something known as Delivered Duty Paid (or DDP, for short).

If means that, at the point of sale, retailers take care not only of the standard delivery costs but also any taxes and duties which are incurred.

That, of course, has a financial implication: the retailer (via his customs agent) has the responsibility for calculating, charging and paying the correct amount of taxes and duties to the appropriate authorities.

It is arguably, though, far more transparent and helpful to the consumer. Taxes of any sort may not be popular, especially with shoppers who just want to get their hands on their new purchase.

Nevertheless, knowing the total cost at the checkout offers clarity.

The second method is known as Duty At Place (or DAP) and involves retailers only taking care of the basic shipping costs.

Although it creates no additional immediate financial considerations for sellers, consumers may bear the responsibility for paying any VAT or customs duties before their goods are handed over.

A purchase using the DAP method may seem cheaper at the checkout than with DDP but asking shoppers to make a payment on the doorstep presents a number of issues.

DAP shipments generally involve longer transit times, which are necessary for the correct duties or taxes which should be applied are determined. They will depend on the level of VAT charged in the country to which packages are being sent.

That's especially important because, from July next year, goods with value from the first euro cent will require the payment of VAT duties.

Whilst consumers in some countries are already familiar with the idea of doorstep delivery charges, many are not.

It is crucial, therefore, to decide which method - DDP or DAP - your customers will favour.

Although DAP may be less expensive for retailers, might it result in consumers who object to doorstep charges subsequently choosing to shop elsewhere?

DDP vs DAP

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The Spring solution

With its many years of experience in handling cross-border shipments in Europe and the rest of the world, Spring is here to help.

We have created a Landed Costs Calculator to help you accurately work out how much in tax and duties every shipment will incur.

We also offer a packet-tracked service which is a favourite with large numbers of e-tailers selling smaller items. Given that Spring is wholly-owned by one of the world's biggest post and parcel companies, PostNL, our postal solution means it will be business as usual even after Brexit and promises first-time delivery via the postal network.

If you need guidance about which delivery method is right for you, contact your local Spring sales person. They know that the needs of every business are different, so can guide you through the necessary steps and come up with a very personal solution.

After all, we are Spring. We listen, we inspire and we deliver.

For further information contact your Account Manager or email marketing.uk@spring-gds.com