New EU rules, which will give online buyers longer to send back items they do not want, will put small etailers at risk, claims a leading e-commerce solution supplier.
Keith Bird, CEO at eSellerPro, said: “The news online retailers from within the EU will have to provide consumers with a two-week grace period for goods returns is worrying news for many smaller merchants, who will see their margins hit as a result.
“The new law passed by the European Parliament last week will also require all online retailers to ensure consumers receive detailed information on purchased goods or services.
“It will be interesting to see how the EU enforces the new legislation. Smaller merchants often have to operate on tight margins. Many, I suspect, will have problems absorbing the additional financial burden of returns combined now with the cost of delivery. Thousands of smaller businesses exist only because of the existence of the internet. If we make it too onerous or expensive for them to trade, we could risk killing off many of these businesses.
“I can see how the directive will help improve cross-border trading for consumers, which can be fragmented due to the range of different legislation for protecting end users across Europe. The problem is the e-commerce sector is so varied. For instance, digital goods, such as movies (such as Love Films’ on-demand film service), downloadable music and software programs or apps will be exempted as a sale is deemed irreversible from the moment downloading begins.
“Compared to the high street, online retail in the UK is in a very positive position at the moment, with sales reaching £5.3bin in May (up 18% on last year) and yearly growth is expected to exceed 13% by the end of the year. This change in consumer spending patterns means it is simply not possible for some smaller merchants to return to the high street.
“The news was not all bad last week,” said Bird. “It was confirmed firms will have two years to comply with the new ruling. To survive merchants need to embrace the directive and concentrate on using the internet to expand into new markets or diversify the product/services they offer customers. There are also solutions available that can help smaller merchants compete with larger players – integrating the entire online sales process. By simplifying and automating tasks such as: inventory management, product listing, sales order processing and customer communications it allows merchants to concentrate on building their business rather than distractions like legislation.
“I have confidence that UK merchants can step up to the challenge. If not, it will be the consumer that suffers as many of the larger global online brands may not stock the less popular or regional goods we require.”