It is not surprising that many e-commerce companies in the UK have reported increased sales during the pandemic. This is mainly within the so-called "essential" and do-it-yourself areas. However, sales of fashion, clothing and luxury goods have decreased. Time will tell if these trends continue.
Delivery periods in the UK have increased. Even Amazon Prime shipments can take up to a week. This is probably due to reducing the warehouse workers to enable work at a distance from one another. Smaller e-commerce companies can benefit from this by delivering quickly. However, the global slowdown has affected the supply of stocks. So also small businesses are affected.
An important issue for e-commerce commerce is whether the first time buyers will repeat or return to high street shopping.
An important question … is whether the first time buyers will repeat or return to high street shopping.
The UK government has taken steps that should help my company and many others.
Normally, companies that have registered for VAT (VAT, UK sales tax) have to pay at the end of each quarter. This payment can now be postponed for one year. This immediately increases cash flow. It is, in fact, an interest-free loan of 20 percent (VAT rate) of sales over the three months. This helps everyone except the smallest of companies, since with an annual turnover of at least £ 85,000, they have to register for VAT.
Any employee can be exceeded and the government will reimburse 80 percent of his salary. Employers have to pay the salary and then take it back in a process that still does not work. (Therefore the need for cash flow increase.) The employer does not have to do the additional 20 percent. Thus, employees are sent home and receive 80 percent of their salary.
There are grants of £ 10,000 or £ 25,000 to pay property tax – depending on the property and how it is registered. This money does not have to be repaid.
The grants work in two ways.
First, companies that pay property taxes and receive relief from small business rates (a long-standing program that excludes companies that own a single, small property) automatically receive the £ 10,000 grant. They only give their bank details, and the money is deposited (eventually).
The second method is more restrictive. It excludes companies that are eligible for tax relief. Furthermore, it is only available on a property basis where the property is occupied and used for retail, hospitality or leisure and where customers physically gather. In other words, if you have a physical store, you get a subsidy. If you do e-commerce from a warehouse, you don't. And it is not automatic. The business must apply.
The purpose of these systems is to keep SMEs solvent – to encourage them to retain employees and pay their bills. Otherwise, millions of people will receive unemployment benefits.
The plans contain smart points that reduce fraud and at the same time improve simplicity. Companies that have registered for VAT and correctly report employee pay will take full advantage. Companies that have tricked the system, not reported on a property's business use and paid employees cash receive nothing.
In summary, the relief measures help my company and others like mine. It is adapted to the British economy. Other European countries have adopted similar programs to support SMEs. These companies use most of the workforce.
In 2018 small to medium sized companies in the UK. was for (i) 99.9 per cent (5.9 million) of all businesses, (ii) 60 per cent (16.6 million) of employment and (iii) about half (£ 2.2 trillion) of private sales.
Popular news sites always report on large companies with thousands of jobs. But the government has properly concentrated on those of us who collectively employ 16.6 million people.
It is the responsibility of British business owners to understand what assistance is being offered and to ensure that they receive it. It is tempting to regard the pandemic as an unplanned holiday. But a better idea to catch up on administrative tasks and other improvements, such as your website. Take better pictures of your products. Write more accurate descriptions. Plan for your reboot after Covid-19. After all, it will eventually disappear.