Boost your sales in Europe with limited investments and with limited risks
Europe and its 500 million consumers are an interesting market for many North-American, Canadian, Asian and other foreign companies. But how can you expand and grow your business in Europe with limited investments and with minimal risks? Offer European customer service and rapid delivery against competitive logistics costs? And ensure you are compliant in customs, duties, taxes and other fiscal and legal matters?
Direct shipping to Europe & Ex Works shipping: a recipe for slow growth
Most of our North-American and Asian customers have started by shipping their European sales orders directly from the US/Asia to Europe by express, airfreight or courier services. However, they have all experienced that direct shipping of individual sales orders is often too expensive, too slow and too complex.
Complexity and lack of export knowledge/experience are also the main reasons why many foreign companies rather put the international shipping ‘burden’ at their EU customers by selling on Ex Works Incoterms.
From a long term perspective that’s probably not the quickest growth path. From a cost and service perspective your competitors might already be way ahead of you via an outsourced European warehousing & distribution center.
International E-commerce in Europe: sell global, fulfill local
Foreign E-commerce shippers have shown us several examples where they had to expose their European B2B or B2C customers to delivery delays due to unforeseen European customs procedures. Or even surprise them with additional charges associated with unexpected European import duties and taxes upon arrival of their order in Europe. That kind of customer service doesn’t result in repeat orders and positive online reviews.
Online it’s all about reputation and being clear upfront on shipping procedures, delivery times, shipping costs and return policies. Sell global but store, fulfill and deliver local!
Selling on Amazon Europe, EBay and other online European marketplaces
Delivering to European Amazon fulfillment centers requires in-depth expertise. Did you know that any shipment arriving at a European Amazon fulfillment center with any duties, taxes or shipping charges due is directly returned by Amazon Europe to sender? In addition Amazon Europe and other European online marketplaces have very specific logistics instructions for shipping, packing, labelling, delivery and receipt of your products. Also here prevention will be cheaper and less frustrating than cure.
Increase European sales by developing customer confidence and trust
European consumers are reluctant to buy products and do payments at foreign websites that do not have a European business-address, European VAT number or European customer service contact details. In international cross border e-commerce sales it’s all about trust and customer service.
Expand and grow your business in Europe with trade logistics
Below some options - there are more - to grow your European business with limited investments and with limited risk. Feel free to contact us for detailed support on these or other options for your specific European business case.
- Set-up an administrative entity in the Netherlands (fiscal representation). By doing this you will obtain a Dutch business address and VAT number. Note: a physical presence is NOT required to sell products to European businesses and consumers. More information on fiscal representation in Europe is available here.
- Submit an application for Article 23 at the Dutch tax authorities. This will provide you the legal possibility to defer the VAT (cash flow advantage). Especially interesting when importing products with a high customs value into the EU. Note: there are only few European countries that offer VAT deferment possibility.
- Check the customs classification codes (HS) of your products on European import duties or import restrictions. Simply use TARIC or contact a specialist.
- Ship your products in large(r) quantities to Europe, preferably via ocean freight in LCL or FCL (less container load and full container load. This will lower your international shipping costs per item opposed to direct shipping. In that case you will need a European warehousing & logistics provider at a strategic location (next paragraph).
- Set-up an outsourced European distribution center at an experienced European warehousing & logistics provider for the receipt, storage, inventory management, order fulfillment and delivery of your European sales orders to European consumers, businesses and online European marketplaces. This has a number of advantages:
- Requires no capital investments in people, bricks and IT
- Adapt quickly to changing markets and circumstances/flexibility
- Makes your fixed costs variable (flex with order volumes)
- Extends order cut-off times for your European clients (increase daily sales turnover)
- Shortens delivery times (same day, 24-96 hours across the EU depending on destination)
- Gives access to many different B2B and B2C delivery options & services
- Provides various opportunities to maximize your European customer service
- Increases confidence and trust in your services from European clients
Outsourcing your European logistics & warehousing provides a low risk, low cost opportunity to keep growing your European business without being slowed-down. On a long term perspective you still have the flexibility to have your own or rented logistics distribution center(s) in Europe.
Many foreign companies have evolved from direct shipping -> outsourced logistics-> into having their own European distribution facilities in the Netherlands.
International European warehousing & shipping services
More information on our European warehousing, fulfillment & logistics services for foreign exporters? Then contact us. We look forward to facilitate and accelerate your European growth from a logistics perspective. With us, trading in Europe becomes easier, safer and more profitable!
Author: Louis Coenders
Date: 15th of September 2016