With the B-word dominating headlines, many UK businesses and EU companies selling to their UK customer base are really beginning to worry – but should we all really be concerned?
Panicking never solved any problem, so my top advice would be – keep your cool, map out the potential challenges you are going to face, and then start putting in plans plans to mitigate them.
Uncertainly about new import and export duties – will products, consumables and components suddenly become exorbitantly expensive?
Changes in tax rates – if a proportion of your trade is between a UK and another EU country, will there be a cash flow implication if zero rated EU trade disappears?
Dips in trade – will sales volumes drop, impacted by consumer uncertainty, changing currency fluctuations and price variances with changes to imports and exports?
However, we need to be calm and rational about this. It looks pretty likely Brexit will happen, with or without a deal. Let’s face it, GBP has already hit record lows (having since recovered a little) and given that Brexit has dominated headlines now for so long, are consumers really going to dramatically change their buying habits when the bell rings midnight on 31st October?
Here is what you can do, and how we are working with our fulfilment clients to ensure we are as prepared as possible, and have contingency plans in place to ensure that customer fulfilment continues to run smoothly, whatever the future may bring:
Be prepared! From previous seasons or years, every retailer will have some anticipation as to what sort of sales volume they should expect to see this coming winter. Although sales fluctuate, an educated forecast taking in account any new product launches, or external factors expected to influence sales figures is a solid starting point
Now we know what sort of stock supply you will need, we can create a plan. Are there economies of scale to be had in importing larger consignments now, ahead of any changes to import or export rates, to ensure you have a fully stocked catalogue of all the products you expect to sell in the busy Christmas period? Speak with your fulfilment provider or freight forwarder to seek their support in securing the best value freight and transport options – the larger the consignment, the cheaper the transport costs per item. For example, if you import in LCL shipments, could your stocks be consolidated into FCL providing a hefty cost saving?
Let’s think about cash flow. It might not be viable to bring in your full A/W 2019 stocks right now, or in one go. However, there are ways to get ahead of the game – if you can calculate all the consignments you will need for the season, work out the most cost effective splits and timings to bring them in, you can contact a currency broker (or 3+ for comparison!) and forward order the currency in which you pay for your stocks to hedge against any dramatic currency fluctuations that could send your margin calculations into melt down
Storage – whether you bring in all your stocks in one go, or broken down into smaller consignments, you’re going to need somewhere to store it all! Speak with your fulfilment centre, or third party logistics provider, and calculate the number of pallets / bays / carton spaces you will need. If you pre-book your storage space you can often negotiate a really competitive rate for longer term or rolling space, making sure you have set aside provision for plenty of storage space so you won’t find yourself with incoming stocks and nowhere to put them
Now you have thought about your stock requirements, the best way to bring them in ready for the seasonal sales period, how much space you are going to need, and have reserved this in advance. The remaining piece of the puzzle is, of course, sales! Now is a great time to prepare your marketing and publicity campaigns for next season, before the rush starts. Give some thought to what offers or promotions you could put together to ensure that you remain competitive and offer some excellent value for money. Christmas will be here soon enough, and so focusing on providing outstanding customer service and added value is key to getting ahead of the competition & feeling prepared to tackle what is likely to be an interesting few months!