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Deal or no deal: Amazon’s guide to Brexit

The date for the United Kingdom’s official EU exit is fixed: the deadline is March 29, 2019. Yet the EU and Britain have failed to agree on more precise details, considerably complicating matters. Amazon's recommendation: British traders selling on Amazon should make necessary arrangements.

The situation demand action – in a timely manner

Tens of thousands of companies sell their goods on the Amazon marketplace. A central objective of this trade is opening up the European and global market. However the looming threat of a "no-deal" Brexit stands to significantly affect businesses and the European-wide economy.

The e-commerce giant advises British retailers to prepare for the worst case scenario, in which Brexit blocks trade. Amazon relies heavily on guidance from the UK Government when it comes to trade with the EU. The company suggested to its retailers that "free movement of goods" between Great Britain and the European Union would be discontinued in the case of a "no-deal" scenario.

Signaling an end to cross-border trade?

Up to this point in time, merchandise stored in the UK could be shipped Europe-wide. Now Amazon has advised its sellers to shift their inventories from UK Fulfillment Centers to European warehouses by March 17, in order to maintain delivery availability. According to Amazon, the recommended standard is at least four weeks of inventory maintained at all times ready for delivery.

An agreement between the European Union and the United Kingdom is of course highly desirable. In the case of any other outcome, the likelihood is high that complications with cross-border supply and delivery may be unavoidable. The traffic of goods from the UK could stall entirely, or be associated with additional costs (e.g. customs duties).

Limits of emergency plans – Deliverability guaranteed?

Certain retailers are taking the advice of Amazon very seriously, although doing so could mean additional costs. The BBC News Service reported Northern Ireland's Marble Hill Natural Skincare has already been loading inventory into pan-European warehouses. The company’s CEO, Joe W. Doherty, stated this measure will ensure short-term delivery even in the event of a tough Brexit.

Though Marble Hill Natural Skincare is unlikely to sell out of stock immediately, the manufacturer had to increase production in order to build inventory for the warehouses. Ultimately higher costs may be at the expense of the company. According to Doherty, there’s only so much contingency planning a company can afford. The room for maneuver is not without its limit.