Why US brands should fulfill from the EU rather than the UK

In recent years, direct-to-consumer (D2C) brands have seen tremendous growth in the United States. However, as these brands look to expand their reach across the pond, they are faced with the challenge of finding the most efficient and cost-effective way to fulfill their orders in Europe.

While many D2C brands initially consider expanding to the UK and shipping to Europe from there, there are several reasons why using an EU-based fulfillment company may be a better option.

Get access to a larger market with easy cross-border exchange

The European Union e-commerce market is significantly larger than the United Kingdom's e-commerce market. According to a report by the Ecommerce Foundation, the EU e-commerce market is around 4.7x larger than the UK.

The EU e-commerce market consists of 27 member states and has a population of over 447 million people. The UK, on the other hand, has a population of around 68 million people. This means that the EU e-commerce market has a much larger potential customer base than the UK e-commerce market.

Furthermore, the EU has a more developed e-commerce infrastructure and a more integrated market compared to the UK. This allows for easier cross-border e-commerce trade and creates more opportunities for businesses to expand their customer base.

US brands looking to expand internationally can benefit from this large customer base and infrastructure. You can find out more about why the European market is lucrative for US brands here.

Avoiding the complications of Brexit

First and foremost, using an EU-based fulfillment company can help D2C brands avoid the potential pitfalls of Brexit. Since the UK has left the European Union (EU), there are now new customs procedures and regulations that must be followed when shipping goods between the UK and the EU.

This has resulted in longer delivery times, increased paperwork, and additional fees that can eat into a brand's profits. By using an EU-based fulfillment company, D2C brands can bypass these challenges and ensure that their orders are delivered quickly and efficiently to customers throughout Europe.

For example, there may be additional legal and tax requirements that a brand must meet when shipping goods from the UK to other EU countries. By using an EU-based fulfillment company, D2C brands can ensure that they are in compliance with all relevant laws and regulations and avoid any potential legal or tax issues.

Get the best shipping times and costs across major markets

If you are looking to build a loyal customer community in Europe, then affordable, speedy shipping will be a key part of that. Customers in Europe are accustomed to fast shipping speeds set by large market players like Amazon, and expect D2C brands to keep up. For example, in key e-commerce market Spain, 26% of consumers noted concerns about shipping costs and timing as a barrier to buy from a non-Spanish shop.

Shipping from the UK into the EU is much more expensive and far more time consuming than using an EU-based fulfillment company. As well as the additional fees from Brexit, shipping over longer distances will result in longer and more expensive delivery.

If your brand is looking to reach multiple markets in Europe, a good option is to use a fulfillment company with pan-EU coverage. This means that they have fulfillment centers strategically located across major markets in Europe where you can distribute your inventory.

Using a distributed inventory approach means you get access to local delivery prices and times in each country your inventory is located in. You give your customers the same experience as if they bought from a local shop, increasing their trust in your brand.

To see how this works in practise, find out how Holy saved 25.5% per order and decreased their shipping time to just 2 days when expanding to France.

Have a partner who understands the local markets and languages

Expanding to the UK may be tempting in terms of language and culture, but when working with an EU-based fulfillment company, you have access to a team of experts who have knowledge on all the local delivery carriers and the advantages of each, packaging suppliers, and more.

Take delivery partners for example. US brands who work with an EU-based 3PL partner can benefit from in-depth knowledge on where each carrier is most appropriate, and pre-existing relationships with negotiated bulk contracts.

Working with Hive for example can save brands up to 36% on delivery costs by using a carefully calculated mix of carriers that gives you the best delivery service for each shipment based on carrier cost (according to parcel weight and dimensions) and quality (factoring in delivery speed for specific regions, service disruptions, and carrier performance).

Speaking the local language also gives these 3PL companies an advantage in communication with local strategic partners, freight forwarders, and more. If you work with Hive, you can expect in-depth local knowledge, but consistent communication with you in English.

An EU fulfillment partner like Hive can help you scale more efficiently

In conclusion, while it may be tempting for D2C brands to initially consider expanding to the UK and shipping to Europe from there, using an EU-based fulfillment company may ultimately be the more efficient and cost-effective option. 

By avoiding the challenges of Brexit, keeping shipping costs low, providing greater flexibility and scalability, and avoiding potential legal and tax issues, EU-based fulfillment companies can help D2C brands expand their reach throughout Europe with confidence.

With a company like Hive, you have everything you need for your European expansion in one place. We can take over freight forwarding from your supplier to our warehouses, picking and packing your orders, delivery, packaging, and more. Reach this large and lucrative market in the most efficient and cost-effective way without having to set up European logistics networks and infrastructure yourself. You can just focus on marketing your products to your new European customer base.

Interested to find out more? Find out more about our pan-EU fulfillment solution or request a quote here.