New research from Enterprise Nation and GS1 UK identifies how logistical barriers are preventing SMEs from reaping the benefits of rising direct-to-consumer online channels and marketplaces
- The increasingly complex logistical landscape is detrimentally affecting UK SME export capability: 41% have experienced expensive and slow shipping, 40% cite complex paperwork as problematic for their business, and a third have had unexpected charges added to customer costs
- This is holding back increased export ambitions of small businesses, with 75% now seeing international trade as a viable route to growth early on given the rise of direct to consumer marketplaces
- 58% feel that there needs to be clearer guidelines for small businesses, and GS1 UK and Enterprise Nation are calling for increased industry support from all key stakeholders and government to tackle this
Enterprise Nation and GS1 UK launch a new study, Delivering the Goods: The Global Ambition of the UK’s Entrepreneurs, which illustrates that while global ecommerce is booming, with start-ups eager to take advantage of new online marketplaces providing direct access to consumers, increasing complexity and issues surrounding export logistics are significantly stifling trading opportunities for UK SMEs.
The culmination of unprecedented events, including Brexit and the Covid-19 crisis, have pushed current exporting operational models to breaking point, with industry lacking the logistical foresight or workforce to alleviate this strain.
This has had an extremely detrimental impact on small businesses. Findings from a survey of 1,000 UK SMEs, highlight how a third have suffered damaged or lost consignments when exporting goods and 40% cite complex paperwork as problematic for their business.
In addition, the cost of trading overseas has risen exponentially to unsustainable levels for these starts-ups, with 41% experiencing expensive and slow shipping and a third having unexpected charges or duties added to customer costs. This has driven down profits and consumer appetite for these products.
These logistical barriers have worsened at a time when UK businesses no longer see international trading as one of their primary concerns preventing growth. Instead, many are confidently trying to seize global opportunities for export following the rise of direct-to-consumer online marketplaces and social channels; three quarters (75%) now say exporting is a viable opportunity early on in their growth journeys and over half of businesses are already exporting products.
It is therefore a considerable shame for industry that UK entrepreneur export ambitions are currently being held back by these logistical barriers. GS1 UK and Enterprise Nation are calling for increased industry support from all key stakeholders and government to tackle this. This includes improving awareness of the initiatives available to this cohort.
Emma Jones, Founder of small business network and business support provider, Enterprise Nation, said: “What is clear is that the Government mantra ‘exporting is good’, has finally hit home and is being wholeheartedly embraced by the UK’s entrepreneurs – interestingly even those at very early stages see exporting as an important route to success.
“But while they have nailed how to market their products and services to overseas customers and handle currency and payment, they need more support to build good logistical skills and capabilities that will ultimately cut shipping time and costs. The missing piece in their armoury is literally delivering the goods.”
Sarah Atkins, CMO and membership director at GS1 UK, said: “It’s clear size does not matter when it comes to exporting and it is no longer the territory of the big boys. It’s really good news that start-ups and micro firms now see international trade as a key driver of success and their customer-centric marketing prowess is opening global doors.
“What we need to see now is a shift in emphasis of export support for small firms, from marketing and awareness to more technical elements such as finding and working with efficient delivery partners, ensuring labelling is watertight to avoid unnecessary delays and clearer guidelines specifically aimed at smaller businesses from Government. We also need to see the Government operating in a new ‘transparency and assist mode’ so we can make the progress we need to see.”
The way forward
- Produce detailed export country-specific guidance specifically written and aimed at the smallest firms. The survey, which was conducted amongst firms with between one and 250 employees, found most firms felt the current guidance was not relevant or did not take into consideration smaller scale operators
- Develop a one-stop-shop that could help smaller businesses simplify complex regulatory issues including tariffs, labelling requirements and export documents all in one place and encouraging best practice which will be different for large and small businesses
- Develop a central hub where SMEs can connect and group together to ‘bulk buy’ and reduce shipping costs. Often services are more suited to exporters of scale selling hundreds or thousands of packets a day, but SMEs are often not selling at this level. The business opportunity to serve exporting SMEs selling more modest levels of consignments represents a multi-million pound opportunity but this sector is not currently well served
To find out more, the full report is available to download here.
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Notes to editors
The report was written by Dan Wilson, a business researcher, market analyst and author of bestselling business including Make Serious Money on EBay.
*The survey was conducted amongst 1,000 businesses members of Enterprise Nation and GS1 UK between June 14 and 30 2021.
About Enterprise Nation
Enterprise Nation is the UK’s leading small business network and business support provider delivering support to more than 50,000 small businesses every month. Its aim is to help people turn their good ideas into great businesses – through expert advice (including a comprehensive resources library), events, acceleration support and networking. In 2020 it launched two high profile business support initiatives: the Amazon Small Business Accelerator and the Recovery Advice for Business scheme which collectively aim to support thousands of small firms impacted by the pandemic.
Enterprise Nation’s small business active membership has grown by 36 per cent in 2021. It now has more than 120,000 members and subscribers, ten per cent of which are professional advisers from a range of sectors offering strategic support to small firms. The adviser platform sees hundreds of connections every week with small firms reaching out for expert support.
Enterprise Nation was founded in 2005 by British entrepreneur Emma Jones CBE, also co-founder of national enterprise campaign StartUp Britain. She is author of best-selling business books including Spare Room Startup, Working 5 to 9, Go Global, Start a Business for £99 and the StartUp Kit, Going for Growth. She is a frequently called-on and regular media commentator on a range of issues which affect the UK’s growing number of SMEs. In 2018 FTSE 100 entrepreneur and HomeServe founder Richard Harpin invested in Enterprise Nation with the aim of creating a ‘more entrepreneurial Britain’.
About GS1 UK
GS1 UK is one of 115 neutral and independent GS1 organisations operating worldwide.
Whether online, in store or in a hospital, the common language of GS1 standards is helping our community of over 56,000 organisations to uniquely identify, describe and track anything, creating greater trust in data for everyone. Our standards have the power to deliver change now and in the future by driving efficiency in the supply chain, and transparency in the wider society, through initiatives such as patient safety programmes and deposit return schemes.
From product barcodes to patient wristbands, we harness the power of GS1 standards to transform the way people work and live.