For most of my adult life time, sending and receiving goods to and from the EU has been as easy as using our domestic postal system, and not that much more expensive. No customs forms and no duty. However that came to an abrupt end.
Since July 2021, I had to make the difficult decision to stop accepting orders from the EU. And since then I have been searching for a way to send packages at a reasonable cost but where my customers don't receive a demand for additional duties and customs admin charges before they can receive their goods.
Finally in February this year I was able to partner with a shipping company, specialising in services for small retailers, who have found a way to successfully deliver shipments to EU customers, cleared correctly in the EU before delivery to the customer with all the duty paid in advance.
Over the last couple of years and because of the UK's decision to leave the EU, it has become harder and harder for small retailers here to send orders to EU countries. The demand for more complex paperwork and higher costs meant that many people simply stopped accepting orders and sending goods to EU customers.
Hatsukoi held off for as long as possible but after hearing stories of people living in EU countries being charged high fees simply to receive orders from UK companies and then the difficulties for those companies if the consignment is returned (again more fees) I made the decision to close the checkout to any orders being delivered to an address within the EU. Even gifts have been affected, with people unable to send packages to friends and family without the recipient incurring a disproportionately high fee compared to the value of the goods.
Although large companies and multi-nationals can cope with the new formalities, regulations and processes, for a small company it has pretty much ended their EU business. One of the main obstacles is that now VAT or sales tax must be paid in the receiving country and each EU country has set their own rate.
Setting this up in your online shop is one nightmare but then so is the process of actually paying the tax. Again, large companies have big accounts departments that can deal with it but small companies necessarily require an intermediary to administer and pay the bill. It comes down to something called IOSS for which you have to be registered or go through an agent who is registered. The system is complex, there's no way round it and those agencies and intermediaries all charge a fee for their services.
If you have no mechanism to pay the VAT upon entry, the only option is to send the parcel 'delivered duty unpaid', or DDU. This means that the recipient is responsible for paying any extra duty and sales tax plus whatever administration fee the shipping company or postal service adds for notifying the customer and collecting the payment.
As someone who is more interested in positive cultural exchange rather than complex accounting, I believe it was a terrible decision for the UK to quit the EU. And it seems that it will take many decades for the damage that has been done to Britain to be repaired.
So What Can Be Done?
Ideally, a retailer wants to send orders 'delivered duty paid', known as DDP, so that the customer pays the sales tax as part of the order along with the shipping fee. This means that as far as the customer is concerned everything is paid at the checkout and there are no nasty surprises before you can receive your order.
For the retailer, apart from knowing that you are giving better service to your customer, it means there's less likelihood that goods will be returned because the customer, understandably, doesn't want to pay the unexpected additional charges.
Since all the regulation changes came in and restricted where I can ship orders, I have been searching for a solution to this problem. How can you get help with these complicated issues? How on Earth are other small retailers doing it? Well, the fact is that they aren't, they simply stopped sending orders.
If you are using Etsy, Ebay or some other global platform you can use their procedures, riding on the back of their IOSS registration. But it's not ideal as they also charge fees that eat away at already small margins and paying for a listing, as opposed to having a product in your own ecommerce shop, adds to the costs too. I considered these options but decided that the price increases I would have to make were unfair and possibly make my products unsaleable. Etsy and other platforms state in their terms that you must not sell elsewhere at a cheaper price.
However, all was not lost...
Hatsukoi Can Now Ship To Your EU Address!
Finally in February of this year I was able to find a solution. I partnered with a shipping company that, having seen this problem emerge, worked to find a practical solution for small retail companies.
Of course, it's not as good as the system we had when Britain was part of the European Single Market but the shipping rates are reasonable, even compared to large couriers like DHL or FEDEX, and all duty is paid when the goods are cleared legally into the EU. Specifically, goods are cleared in the Netherlands at their VAT rate of 21%. After that, they are sent as normal through EU postal and courier services to their destination with no extra costs for the receiving customer.
So now as an EU customer, here's what you get when you order from Hatsukoi:
- An order that includes VAT at 21% (Netherlands)
- A country specific shipping fee via an international courier
- A trackable consignment, where you can leave delivery options and divert if necessary
- Delivery to your door Duty Paid, with no additional fees to pay.
I am so delighted to at last be able to accept orders from my valued EU customers. I'm sure that many people have been put off ordering from the UK but I hope that you will take a look at Hatsukoi and, if you see something you like, feel that you can place an order.
My sincerest wish is that one day the UK will rejoin the EU or at least find a way to become part of the single market, with freedom of movement and a closer relationship. But in the meantime, small businesses like mine will have to do what we can and find ways to continue serving our overseas customers.