Why do US based companies fear distance selling in the EU and ignore a market of over 500 million? Effectively, there is one single barrier to entry that they cannot overcome.
Europe is not a homogenous market. Within the European Union there are 28 countries, each with their own sales tax (Value Added Tax), and duties, which mean dealing with 28 separate regulatory bodies. The importer of record (IOR) is liable for sales tax (VAT) at the point of entry into any member state, along with any customs duties. Sales tax (VAT) is calculated at approximately 20% of the commercial invoice dependent on the member state to which you are entering the goods. Each member state has its own threshold for vat registration, some can be as low as 15,000 euros of sales.
Our Story – TBM Solution
We have developed the solution for non-European registered companies. Our solution allows non- European based companies sell in Europe without establishing costly set up fees. As we have outlined, the most common pitfall for companies selling in the European Union are Vat and Duty. The threshold for selling goods into the European Union and avoiding Vat and Duty on point of entry varies per country and is approximately 22.00 euro. Above this threshold means vat registration within the European Union or delivering your product DDU (Delivery duty unpaid). Choosing the latter of the two can become very complex. In a case where you deliver product to an end consumer you are leaving them liable for all VAT and duty cost, with many consumers refusing to pay this on delivery. Also they will incur costly administration costs from the courier company delivering. The consumer also is within his rights to return the unit for full refund within 28 days. This leaves the provider exposed to a costly return process. Our service means you will not be required to outlay VAT on import and we can have your product on sale to a vast market within 4 weeks!
How it Works
Depending on your preference, TBM can utilize its web development team to build a specific European site for its customer. Alternatively, it can just link its payment processing system into the backend of the client’s site. TBM put a dedicated team of people in place through the build process, making sure that every aspect is covered prior to the Go Live date. The team will discuss the multilingual translation options for the website, along with European legal requirements for allowing product returns. The team will go through linking our customer support team to the clients own team. The team will also link the clients Customer support software with that of TBM, ensuring that the end user gets a real-time support case raised and resolved in a timely manner. We will advise what other e-commerce sites are doing in terms of delivery costs and advise what’s best for your industry. We will build an appropriate returns system to suit the client’s needs as we are very aware of the costs associated with product returns. On return of the units we will have a tailor made disposition program in place.