The majority of UK small businesses (60%) are not exporting abroad, potentially missing out on millions of pounds in lost revenue according to new research* from Royal Mail.
The key reasons for this include the cost and complexity of getting through customs (26%), lack of knowledge of the market (21%) and language barriers (21%).
35 per cent of small businesses believe Europe holds the most potential to generate new sales for their business while 28 per cent believe it is the USA and North America that holds the most potential to generate sales.
The majority of UK small businesses (60%) are not exporting abroad, potentially missing out on millions of pounds in lost revenue according to new research from Royal Mail released today as part of Small Business Advice Week which took place during the 5th – 11th September.
For 26 per cent of small businesses, the cost and complexity of getting through customs is the main obstacle to exporting. However according to Royal Mail’s International Delivery Matters reports, many international orders from outside the EU fall below the minimum price threshold at which customs duties are chargeable.
Other reasons given by small business owners for avoiding exporting were a lack of knowledge of the market (21%) and language barriers (21%).
But the research shows that those who are not selling overseas are missing out. Among the 40 per cent of business who sell internationally, just over a quarter of their sales this Christmas (26%) are expected to come from international orders.
The study of 300 senior decision makers and small business owners was conducted by Royal Mail to assess small business owners’ attitudes to international growth. It also found that 35 per cent of small businesses believe Europe holds the most potential to generate new sales for their business. Looking further afield, 28 per cent believe the USA and North America hold the most potential.
To support UK businesses looking to expand internationally, Royal Mail Royal Mail’s Tracked and Signature services are now available to 14 new countries.**
Royal Mail has also announced it is increasing the compensation it offers customers using its International Tracked products from £50 to £100. The increase will apply to items posted from the 10th October 2016.
Small town, big dreams
A further look into the export aspirations of UK small business owners found that 10 per cent are currently selling to customers within the EU and would like to seek more opportunities to sell to non-EU customers. 15 per cent said they sell outside the EU and would like to seek even more opportunities to sell to non-EU customers.
While domestic online marketplaces are popular among small businesses looking to grow their UK customer base, only 25 per cent of small businesses look to international marketplaces to grow their sales potentially missing out of the huge sales potential they offer.
Jim Shaikh CEO of Yoomi, manufacturer of self-warming baby bottles said: “Expanding internationally was a no-brainer for us. The UK market for our product is very mature and we found that expanding abroad was the logical next step and the only clear way for us to achieve solid growth.”
Royal Mail’s top tips for businesses wanting to sell internationally
1. Research the market – be committed as a lot of businesses end up being incidental exporters.
2. Consider online marketplaces –Royal Mail’s storefront on Tmall global is a great way to start selling to Chinese consumers.
3. Research the delivery preferences of online shoppers in the market you plan to sell in – Royal Mail’s International Delivery Matters reports are a good source of information.
4. Consider using international tracking and signature services when shipping your products: this gives customers confidence to shop with you.
5. Give it a go: it’s easier than you think and the rewards can be huge.
Roger Morris, Head of Royal Mail Parcels said: “Getting started as an exporter can be daunting. We have taken significant steps to help businesses looking to start exporting, from in-depth research into international markets, to enhancements to our international products. We believe that international is just another postcode. We work with businesses to establish reliable value for money services.”
For further information please visit: www.smallbusinessadviceweek.co.uk
*The research was conducted on behalf of Royal Mail by Vital Statistics in August 2016 – sampling 300 Senior Decision Makers within UK businesses.
** The following countries will be move from being Signed destinations to Tracked & Signed destinations: Barbados, Belize, Cook Islands, Georgia, Greenland, Lebanon, Russia, Tonga, Uganda, Aland Islands and Faroe Islands.