Creative Catalogue Online Ltd

Creative Catalogues has been trading in France for exactly one year now, and it is good to summarise the learning points, which might be helpful for other small companies thinking of setting up in France.

1) First and foremost you do not need to set up a french company.
Whereas in the UK there are three types of company: sole trader, limited compnay and plc. In France, there are at least 8 different types of company. I visited the French chamber of commerce and amongst others read Making a Living in France by Joe Laredo, and I was thinking of setting up a Sucursale (Subsidiary to a UK company) but it was simpler just to sell in France as a UK company. The income and VAT would then be accounted for in the UK, and this was a whole lot simpler than tackling the accounting and other reporting needed in France.
I can't claim to be an expert on French companies, but two things were significantly different to the UK. 1) You needed to pay social security and national insurance from the very first day the company was set-up. 2) If you set-up a SARL (similar to a limted company) you had to include details of the capital invested in the company in your company letter-head.

2)VAT can be paid in the UK. Nuff said. I am not an expert, but that was our solution, and it worked.

3) Taking Credit Card payments was more expensive than in the UK, surprising very few of the UK credit card merchants for instance Streamline could help with the relatively straightforward request to: 'take credit card payments in Euroes'. This was doubly perplexing because we did already accept payments in Euroes and Dollars in our UK shops. The few solutions on offer were going to cost a couple of hundred pounds per quarter. In the end we set up a shop offering payments using Paypal.

As a result of using Paypal our sales were low, and we had many requests to pay by carte bleu or cheque.

4) Postage costs are higher in France. The Franch National poste service La Poste has a very bad reputation and is generally not trusted for parcels and purchases. All parcels sent out from a shop or catalogue need therefore to be sent out by courier, and Colissimo and Chronopost were both highly recommended. The cheapest cost we could find was Euroes 8 - 12.

As a result of the high postage costs, customers were not inclined to purchase smaller items with ticket prices of Euroes 20 or less.

5) Shopping in France
Christmas sales came very late in France, we saw a significant increase in sales from December 1st onwards, but this only left 20 days to make strong seasonal Christmas sales.

In general, the French still have a culture of shopping with people they know. They build relationships with shop keepers and departments stores, and remain loyal to these. Moreover French city planners are very keen to build up the shopping centres of their towns, with pedestrianalisation, carnivals, parcs and similar.

French e-commerce is said to be 17% of all retail sales, compared to 41% in the UK.
Sectors that are well established are: music, electronics and DVDs.
I was selling toys and fancy dress. The Toys sales were low mainly due to high postage costs. Fancy Dress was very profitable, and something we did extremely well at.

The great advantage of selling in France were:
1) We had an additional income stream outside of the UK, and this income was growing
2) The online marketplace is less competitive, and margins remain strong
3) I had an excuse to spend three months working from my French home office, and variety they say...