Expanding sales into the EU offers significant opportunities for many UK retailers. However, it also invites several key challenges. Although larger organisations may benefit from dedicated distribution networks, smaller suppliers may not have the volume or flexibility to easily compete.
Two strategies are however somewhat levelling the playing field: bonded warehousing and shared storage solutions – allowing SMEs to establish a stronger presence within European markets without major upfront investment.
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Bonded Warehouses: Defer duty fees with dedicated storage space
What is a Bonded Warehouse?
A bonded warehouse is a customs-authorised facility where a company can store imported goods before customs duties and taxes are paid.
This means that – rather than paying import fees whenever products enter the EU – retailers can instead defer paying until those goods are released for sale or distribution, e.g. A business can move its goods from a manufacturer in Turkey to a bonded warehouse in Poland before splitting the load to go elsewhere in the EU. This can effectively allow them to avoid paying ‘double duty’ and instead only pay customs fees when their goods are released to go to their end destination(s).
How can bonded warehousing benefit smaller businesses?
For SMEs seeking to secure a foothold in EU markets and smaller businesses who may lack large cash reserves, cash flow is often arguably more important than profit margins due to the financial flexibility it offers. Deferring duty payments through bonded warehousing allows for more working capital to remain available for seasonal inventory planning, additional stock purchases, marketing, and wider business expansion activities.
Investing in a port-centric approach to distribution through using bonded warehousing can also help structure a more efficient and cost-effective supply chain. This is because goods can be held near the port they arrived through before being distributed to their end destination – reducing the need for inland haulage to a storage facility and therefore the overall cost. It can also save on expense should customers need to secure sea freight connections for short-sea journeys.
Removing complexity and simplifying customs compliance
Whether it’s consolidating multiple consignments under one customs clearance via the Smart Border, managing duty fees or offering support with regulatory compliance; working with a specialist logistics partner means businesses are able to significantly cut down on the number of stakeholders they need to manage. This allows them to more effectively and efficiently mitigate the risk of expensive errors and reduce the administrative burden of sourcing and managing bonded storage and customs procedures.
Shared storage: A flexible alternative for those shipping smaller volumes
What is shared storage?
Shared storage facilities allow for multiple businesses to share the same storage space. Multi-client warehousing solutions allow smaller retailers easier and more cost-effective access to international markets as they only pay for the space and/or services they use rather requiring a company to source and lease an entire dedicated warehouse space.
The key benefits of shared storage:
Scaling up via a more streamlined service
For those exploring expansion into new markets or whose customers have fluctuating demand needs, shared storage (alongside shared transport solutions) provides flexible capacity and lower fixed overheads due to the reduced property commitments.
By improving the efficiency of their delivery performance, retailers with established storage and fulfilment processes are far better positioned to meet their customers’ expectations and expand as sales volumes increase.
Ideal locations for faster delivery
For many retailers, delivery speed is increasingly a driving purchasing factor, so strategically storing inventory closer to your customer base can help smaller businesses compete more effectively against those with more established distribution networks. This is because it allows businesses to reduce their ‘last-mile’ transit times, improve the reliability of their returns processes and offer a far more localised, responsive experience.
Combining bonded warehousing and shared storage solutions for maximum strategic value
From a logistics standpoint, these warehousing solutions are not simply about storing products.
Whether it’s deferred duty payments and lower overhead costs, greater flexibility and faster transit times, or reduced risk when expanding into new markets; leveraging shared storage solutions alongside bonded warehousing can create resilient, cost-effective supply chains.
Information is key to making decisions. As a recognised brand with hauliers/suppliers, Baxter Freight has the in-house expertise and supply chain network to not only secure tailored warehousing options that fit our customer’s specific needs but also resolve logistics challenges they might otherwise face like needing support with fulfilment or navigating regulatory changes affecting your product lines.
Our warehousing portfolio is made up of emergency, temporary and long-term storage along with bonded and non-bonded warehouses to suit a variety of goods and industries (including temperature controlled, hazardous, fulfilment centres for ecommerce, etc.), meaning we are committed to ensuring your brand promise is delivered, consistently, for your customers.
