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One simple trick to improve your EU customer’s experience

Picture the scene. You’re scrolling on your phone late at night. You should be in bed, but you’ve got yourself caught up in an argument on social media. Or you’ve gone down a Wikipedia vortex and now you’re an expert on the flora of the African Great Lakes. But then you get distracted. You see a banner ad for a combination fork-bread knife. You’ve had your eye on one for a while, actually. You’re convinced it’s the answer to your kitchen prayers. You click on the ad and see the product is on sale. 20% off from the last time you checked. Ok, you can hold out no more. You click the buy button. You experience a shiver of anticipation as you wait for your fancy new gadget.

Although the whole process happens seamlessly, from the customer perspective, you’ve been expertly guided through a marketing funnel. After maybe weeks of subtle psychological prodding, you’re a conversion in the e-commerce company’s sales analytics. But you don’t have to worry about all that. All you know is you have a cool and useful new tool that should be arriving at your doorstep in a few short days.

It’s all fun and games until you have to pay the courier

Until … the courier shows up and asks you for €15. Suddenly the spell is broken. What’s all this? Why is it your problem? And that’s not all, the courier also requires an ‘admin fee’ for reasons you have to guess at. What’s that all about? It’s really frustrating. It leaves a bad taste in your mouth. Maybe you’ll think twice about ordering from Acme Dropshipping again.

It’s even worse when the goods fail to arrive within the predicted delivery date because they were held up by customs. And then you still have to pay the outstanding VAT and an admin fee. 

EU customer experience, enhanced 

Now imagine a very different scenario. The customer pays an all-inclusive price at the point of purchase. They click on the e-commerce site, see the exact total price they will need to pay (shipping + VAT included), pay for their new items, and even get an instant VAT invoice. 

What’s more, the shipment will be hurried along a customs ‘green channel’, ensuring the goods are not unduly delayed. 

In this scenario, the customer gets exactly what they wanted, within the anticipated delivery time, at the price they were expecting.

That may sound a little too good to be true. However, it’s all part and parcel of the new improved Import One Stop Shop (IOSS), which is being introduced by EU authorities from 1 July 2021. 

When you take advantage of the IOSS, VAT is charged at the point of purchase and the VAT compliance and import process is greatly simplified. 

When can I use the IOSS?

The IOSS only applies to goods valued at less than €150. The items must be outside the EU at the point of purchase and they must be shipped directly to customers in EU member states. 

In order to take advantage of the IOSS, you must register an EU member state, and comply with regular VAT filing requirements. If you are not an EU-established business, you will need to appoint a representative.

You may need assistance getting started, but once you’ve registered for the IOSS, your VAT compliance will be simplified – and your customers will enjoy a greatly enhanced experience.

Don’t miss out on a better import experience. Get in touch with Vatglobal’s European e-commerce specialist for strategic advice on enhancing your company’s VAT compliance and assistance improving your customers’ online shopping experience.

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