The UK has always been a nation of exporters, from its products and services to its language, culture and music. However, according to the Confederation of British Industry, UK is performing poorly when it comes to SME-generated exports compared to exporting countries of comparable size.
Many small businesses worry that shipping overseas is not worth the time and effort. But UK Trade & Investment estimates that value of exports (EU and non-EU) increased to £24.9 billion in March this year, demonstrating the undeniable opportunity for SMEs who are willing to expand to new markets, whether in the EU or further afield.
On 24 June, the EU referendum resulted in a majority vote to leave. As a result, trading in the EU could see growing complexity in the coming years. The UK will transition from its current economic and trading relationship into a new, as yet unknown position. Therefore, it is not possible to quantify the effects, but there is the likelihood that new customs procedures will be implemented by UK and EU governments to allow for goods transported between the markets to come and go from the UK. UPS will closely monitor changes in applicable laws and provide brokerage, customs clearance and other services, along with our global integrated shipping network. Our aim is to ensure our customers have the least possible complexity when importing to, or exporting from, the U.K. and Europe.
Every business has, and will continue to have, the capacity to export, it’s simply a case of putting the right processes in place. There are a number of steps that businesses can take to start exporting, and thereby join the thousands of other UK SMEs who are successfully shipping their products across the globe.
There is no substitute for visiting potential markets and experiencing the local culture first hand. Getting to know your target market will be hugely helpful when preparing your delivery strategy, as it provides priceless insights into a market’s trading values. You can travel on your own or you can take part in an organised trade mission.
Governments and industry groups often organise trade missions, which provide an excellent opportunity for business owners to further explore a specific market. They can include useful activities such as ‘meet and greets’ with potential trade partners, as well as the opportunity to connect with local businesses, speak with other businesses about similar experiences, and assess the competition. This year UPS has already led two trade missions in partnership with Enterprise Nation, one to Ireland and a second to Germany, which include focused educational sessions in addition to networking opportunities – click here to view LCCI’s current missions.
Rules and regulations
It’s necessary to identify what the local laws and regulations are when exporting to a selected market. Although there is ‘free movement’ of goods within the EU, in some cases, paperwork may still be required for customs purposes to ensure that products can move across borders. And, while the US is a relatively open market, regulations and licensing requirements can vary on a state-by-state basis.
Regulations are also subject to change and it’s vital to remain up to date on these changes. This due diligence can help SMEs avoid expensive customs holdups and late deliveries. The recent change to the de minimis threshold for shipments to the U.S. is a great example, as UK businesses stand to benefit from an increase in the lower limit on imported items, making it easier to do business with the U.S. A great tool to help you keep on top of all rules and regulations is the UPS Export Toolkit.
Prepare for growth
Be sure to map out your supply chain from the start. Don’t underestimate the importance of how you will produce, warehouse and distribute your goods. The internet is a great leveller, especially for small businesses, because it can put you in touch with customers around the world. However, you do need to have the process in place behind the scenes to reach these customers quickly and at a reasonable rate.
Partnering with a logistics provider can be a good way to get the flexibility
you need to react quickly to shifting market needs. Gilo Industries Group, a world-leading manufacturer of paramotor aircraft and engines, worked with UPS to meet there logistics needs. Gilo now uses a fully automated system that helps them reduce transportation time and errors. It also allows them to keep their customers informed during the entire export chain with onscreen visibility and notifications, giving customers peace of mind.
Partnering with a logistics company can also be useful for SMEs that are just starting to ship internationally. Services offered through UPS Today enable SMEs to guarantee that their overseas customers will receive items quickly and at a competitive rate. This can help differentiate you from your competitors.
Remember, it’s not just about getting your products to your customer. If someone from overseas is buying a product online they need to know they can return it easily if the product is not quite right. Returns are important in creating a positive customer experience and can play a significant role in driving purchases, repeat customers and brand loyalty. A key way that retailers can make returns more convenient for their customers is to prepare for them when the product is initially shipped. A strategy that is particularly valued by consumers is providing a pre-paid return label with the delivered product, just in case they change their mind.
So, while entering an unfamiliar market can be daunting, if done correctly it can be incredibly rewarding and profitable. By seizing new export opportunities and selling internationally to the EU and beyond, these business can build their own success and contribute to the broader economic success of the UK.
LCCI members receive an exclusive 10% discount with UPS UK on their shipping platform. Contact your account manager for more information on how to use the offer.
Aarti Ravi, startup and small business Manager at UPS