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This is Emma. Emma created and now runs a highly successful clothing and footwear e-commerce business. As her business grew, Emma started getting orders from EU customers. She decided to embrace this opportunity and start marketing in EU countries, which created more orders. Eventually, the EU represented around 30% of her orders. She used a combination of a large, well-known multinational parcel carrier and a mail company to ship her orders into Europe and generally received good rates and service. Then the UK left the EU...
Initially Emma continued to market and ship orders into the EU, but the customer complaints started almost immediately - "I'm being asked for import charges and a handling fee before I can take delivery and it's almost €60!". “The tracking says it is stuck in customs and it's going to be returned, can I have a refund?”. Emma contacted her parcel delivery company, who couldn’t really help, but suggested a DDP service may be better for her customers.
Following a bad online review, Emma tried to deal with the complaints on a case-by-case basis, but it was time consuming and distracting her from other important areas of the business, so she decided to take the parcel delivery companies advice and ship the parcels DDP. This seemed to work in most cases, because with DDP the import charges were reversed back to her, so her customers were not charged before delivery. However, she still had customs issues in some countries and some orders were being returned.
The costs of shipping to the EU stack up
Then came a big shock. Her parcel delivery company invoices arrived. Over and above the base shipping rate, layers and layers of surcharging appeared. Brexit surcharge, customs surcharge, DDP surcharge, fuel surcharge... It went on and on. Emma calculated the cost of shipping her parcels was around 250% higher than it was before the UK left the EU. This was eroding her margins as she was unable to pass all the charges on to her customers for fear of putting them off.
Then Emma heard about the EU IOSS scheme which started in July 2021. She thought it was a great idea – get an IOSS number and the EU VAT is sorted, my customers won't have to pay VAT and duty on delivery. As required, Emma got in touch with an “EU Intermediary” who confirmed that they were able to get her set up with an IOSS number and do the necessary monthly and annual returns. However, what did come as a surprise was the cost. Based on the volumes of parcels she sent into the EU, this was going to cost around £6,000 per year. Not the solution she was hoping for.
Emma looked at other parcel and mail delivery companies to try and get the costs down, but it was the same – excessive surcharges and constant customs problems. In some circumstances, even when the shipment was sent DDP, her customer was still being asked for VAT, duty, and local handling fees. Emma decided it wasn’t going to work and with a heavy heart, she made the decision no business owner wants to make and 'switched off' shipping to the EU.
A genuine solution
Then, one evening while searching for possible new EU parcel delivery solutions, she came across SAMOS. Reading the information about the service, SAMOS claimed to have developed a bespoke solution for shipping parcels into the EU. She read that SAMOS was able ship parcels into the EU hassle-free, even if she didn’t have an IOSS number.
Intrigued, she read on. SAMOS exports EU parcels using their own vehicle network. They clear parcels into the EU using their own customs agent and reverse any import charges back to her free of charge, a bit like how a DDP service works, but without the DDP surcharge. Delivery time was 3-7 days, and her customers would never receive any additional charges. She realised that this was a completely different process to the parcel delivery companies she had tried, and it sounded ideal.
SAMOS - alternatively brilliant
Emma contacted SAMOS who confirmed everything. She was also informed about the SAMOS Shopify app and that she was able to connect her store to create SAMOS shipping labels in seconds. Better still, she was able to ship up to 1kg to Germany for £10.89, with no further surcharges – and this is exactly what she was going to be invoiced. She realised that this was a third of the price she was currently paying.
Emma decided to trial the service. She changed her checkout process for her EU customers and itemised the import charges which meant that they paid for everything in one transaction. Therefore, the process from her EU customer's perspective was the same as it was before Brexit – they chose product on her website, then paid for the product and import charges during the checkout process. Their parcel was then simply delivered with no customs issues or any additional charges to pay.
The next week, Emma received two invoices from SAMOS. One for the parcel shipping charges and one for the import charges. Because Emma had already received the import charges from the customer during the checkout process, this did not come out of her margins. The only cost was the shipping charges. Emma had a lightbulb moment - the SAMOS service was exactly as she had expected and dealt with her two major headaches – what to do about customs problems and what to do about the import charges. Most importantly, customers buying from her had the same buying and delivery experience as they did before Brexit.
The following week, Emma formally switched EU orders back on. Since then, she has re-started marketing to EU customers she and has recovered the 30% EU sales which she lost, and is currently growing sales further. She has also re-established repeat business and customer loyalty.
