On 23 June 2016, people of the United Kingdom voted to withdraw from the European Union, making it the first and so far only country to leave the EU since its establishment. In December 2020, the transition period ended, and free movement law stopped being applicable between the two. What does it mean for print on demand businesses of the United Kingdom and European Union? Let’s find out!
Who Are the Affected Parties?
While the whole economic sector needs to adjust to the new reality to a greater or lesser extent, several parties are going through major changes.
- British print on demand businesses that have customers in the European Union
- European Union print on demand businesses that have customers in the United Kingdom
- Courier network.
What Exactly Has Changed?
Now, as the United Kingdom is treated as a third-party country by the European Union, the value-added tax is paid for all imported and exported goods between these zones.
If the cost of the product is less than 135 pounds, the VAT is paid by the UK company, but it is usually included in the end product price, so the customer pays it. If the cost of the product is more than 135 pounds, the VAT is paid at the point of delivery (customer pays as they receive the goods). Additionally, the customs declarations are also made, but usually, courier companies take care of it. Nevertheless, the costs are still covered by the customer. The standard VAT rate is 20% for the majority of the goods and the reduced VAT rate is 5%. Custom rates are different depending on the types of goods, starting from about 2.5%.
For example, if a potential customer from Norway wants to buy ten t-shirts from a print on demand company in the United Kingdom for the total price of 100 euros, they will need to pay the customs fee as well as value-added tax, which could even double up the price.
In addition to VAT, you now also need an EORI number. EORI is a unique number used to transport goods into and out of the European Union, used for custom declarations and different official papers. If you ship your goods without EORI, they would not pass through customs and you’ll also have to pay storage fees.
What Does It Mean for Print on Demand Business?
In short, Brexit changes everything for the print on demand business! If earlier the customers made choices that were not based on affordability or delivery prices, now it is neither practical nor cost-effective for customers from the EU to choose a POD company in the UK or otherwise if they can find cheaper alternatives elsewhere.
As such, decreased profit is a real threat for print on demand businesses all across Europe and the United Kingdom. For example, only a month after the stop of the free movement law, exports to the EU dropped by 68% compared to the same period last year.
What Is the Solution?
British print on demand companies can open fulfilment centers in the countries of the European Union, while European print on demand businesses can do the same in the United Kingdom. However, such a solution is accessible only for large-scale companies that have enough resources and time to realize such an idea. Meanwhile, for the majority of middle and small-scale print on demand businesses, this is not an option.
You can look for printing facilities in the countries of customers, so the goods would be printed and delivered from there. While this solution is doable, it presents a lot of new challenges. For instance, you will need to look not only for one but for dozens of different print partners in several countries of Europe, depending on your orders’ flow.
It means you will have to repeat the tiresome and exhausting process of contacting a lot of print partners, discussing cooperation details, and choosing the right ones over and over again. Not quite high-efficient, right?
Another solution that solves your issue, but doesn’t create a bunch of new ones is finding a third party that would take care of printing and delivering for you. This way, your customers not only can buy your products at affordable prices but also get their purchases in quicker terms. Additionally, you will save the fuss of applying and getting an EORI number.
While there are lots of third-party companies that offer such services all over the world, here is the list of reasons why you should consider choosing Cloudprinter.com:
- Network of 170+ print partners. All of our print partners are reliable and trustworthy since we check all of the partners for quality and efficiency.
- 104 countries covered. You will gain the opportunity to broaden your customer base and sell products all over the world, not only in the European Union.
- Environmentally friendly. Printing as local as possible allows you to reduce your carbon footprint by 96% and contribute to the climate change fight.
FAQ: Brexit and Print on Demand Business
What has changed?
The United Kingdom has left the European Union, so the free movement law doesn’t apply anymore when shipping goods between the two parties.
How does it affect your customers?
Due to the need to pay taxes and check goods at customs, your customers will experience inconveniences in terms of money and time.
How will it affect imports, exports, and shipping?
Both import and export goods are required to have value-added tax and undergo customs control. It means added costs either for customers or businesses.
What’s VAT and how does it affect me?
VAT is a value-added tax. Depending on the total costs of the products, it is either paid by the business in their country of origin or by the end-customers at their location.
What's an EORI number and do I need it?
EORI is a unique number used to transport goods into and out of the European Union, used for custom declarations and different official papers. Without it, you can't ship goods between the UK and EU, and vice versa.
How to ensure that my customers don’t turn to the local competitors?
Provide local fulfilment and print your products as close to the delivery destinations of your clients as possible. Use third-party companies such as Cloudprinter.com to outsource printing and delivery.