How to navigate Brexit red tape when bring your product to market

Elliott Perales, co-founder and CEO of high-end menswear and interiors marketplace Bombinate has helped, and is helping, many small European brands enter the UK market.

These are brands that could not gain access earlier in the year with the red tape brought by Brexit and Business Matters spoke to Perales to get his advice on how to navigate the challenges that Brexit has created.

What challenges is Bombinate facing in terms of additional costs, bureaucracy and delivery delays? How are you overcoming each challenge?

Similarly to many marketplaces, Bombinate faced a major challenge when new Brexit regulations were approved, with new paperwork, duties, and COVID and borders-related delays. Despite the circumstances, we have however made the most of this situation and upgraded all our logistic systems to operate more efficiently both for ourselves and our brand partners.

How to navigate the challenges of Brexit

  • When possible, ship with DTP (duties and taxes paid) so your customers don’t receive a bill at home.
  • Invest in processes to fill perfect customs declarations. This is a one-off investment that will reduce delays.
  • Take this as an opportunity to review your whole shipping and logistics process for global orders. You now need to apply the processes to ship to the EU or the rest of the world.
  • Review your shipping contracts. By really negotiating we actually managed to get cheaper prices than before to ship with our logistics partners. Use Brexit to negotiate as much as you can, you may end up in a better position than before.
  • Remember that this hit all companies in your industry. Therefore, if you do it better than them you’re gaining a great competitive advantage based on operational savoir-faire.

Think of it as an opportunity to bring your business to the next level and if you can’t implement new operations, trust partners that have found a solution. As a key marketplace for small and medium businesses that focus on quality, craftsmanship and sustainability, we have supported several brands in this transition and have seen them overcome these otherwise lethal issues.

What do you think the long and short term impact of Brexit will be on small, UK-based businesses, and their European counterparts? Elliott Perales, co-founder and CEO of Bombinate:

“There will be winners and losers. Brands that fail to understand the impact of poor customs declarations and that don’t ship with Duties and Taxes Paid (DTP) when applicable will see lower repeat order rates. This added friction is of course a nightmare, but once you get your processes right you’ll be at an advantage against competition that didn’t invest in those processes. Because at the end of the day, it’s the customer experience that matters.

What are you doing internally to help facilitate your European brands because of Brexit?

We’ve signed a deal with a major logistics provider to ship all items that cross the border Duties Duly Paid. This was an exhausting negotiation as the costs associated with the new procedures are very high, yet we wanted to make them affordable for both our customers and brands. We’ve also had to change our entire shipping, integrations and accounting systems to cope with the new rules. This move has been essential in reinforcing our relationship with our brands, protecting their business from the negative impact of Brexit, and establishing a stronger connection with customers based on trust.

In other words, we are betting on becoming the trusted platform for customers wanting to shop without having to worry about duties, taxes and delayed parcels at borders. This is a long term effort, but after the retail apocalypse due to Covid and Brexit that most international businesses experienced in late December, we are now in a position to look at the future and gain market share on behalf of our brands.

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