I'm going to start selling on eBay and need some qustions Answered

[Dnallov]

I've signed up as a business user on eBay and I’m going to start selling some equipment via auction, I've got my head around the unbelievable eBay charges, (serious I couldn't believe how much it is, the greedy..... so and so's), but the thing I'm really stuck on is where to add the VAT. My company is VAT Registered, so I need to add it. When adding a product I see an option “Applicable VAT rate included in sales price", then you put in a %, but all my sales will via auction, so I want to add the VAT at the end of the auction, not included in the bidding price. Is there a way to put it in PayPal (I can't find that option).

Thanks for any help!

 

[MH1]

Since ebay users are primarily consumers not businesses, the vat is worked backwards, so the bids include the VAT, your invoice will show the VAT amount later, deducted from the original bid.

I don't believe ebay want the confusion of another charge to be added on, the amount of people cancelling because they had not read VAT would be added later would be huge, most of the buyers do not even read the listings as it is.

 

[Dnallov]

So I have to choice but to include the VAT? Is there no way of add it in Paypal (thats all I'm going to use) but Specifically indicate that it will be add after the auction is added?

 

[deniser]

No as MH1 says you are selling to largely to consumers not businesses.

If you went into a shop to buy something as a member of the public you wouldn't expect to have VAT added when you reach the till.

 

[Dnallov]

You see, I'm selling Catering Equipment, my target market are largely VAT Registered, such as restaurants etc.

 

[deniser]

Yes but you have no control over who will win the bid.

 

[Dnallov]

Ok, maybe I'm putting my qustion wrong.

ALL my customers will be in the commercial market, and in the commercial markets business world, everything is priced excluding VAT. This is because the seller knows that 85% of his customers will be able to claim back there VAT. In a shop with catering equipment a customer will pick a piece of equipment, with a price tag of £100, and when they get to the checkout the VAT will be added then (£117.50)

You see if I include VAT in the auction price, it's going to seem exspensive, potential customers won't even click on my item, becuase they won't know the the price includes VAT.

So how can I put this into the eBay world, I still can't see how I can't add it at the paypal stage.

 

[lesliedocherty]

thaks for the lesson in vat, but we all understand it pretty much, its you that doesnt understand, with ebay, its not geared towards businesses, a normal person of the street may buy your item and be suprised with vat.

so ebay is priced with vat included, i know prices may then seem higher, but thats just tough.

 

[MH1]

You simply try it as is, mention clearly in the auction that you supply a VAT receipt, and you are on a level footing against your competitors.

BTW: there is a fair amount of catering gear sold on ebay, approx £10k in the last month alone with a 45% sell through rate.

The VAT issue is not a problem, most business people actually do read the listing, conversely many members of the public do not.

 

[Dnallov]

thaks for the lesson in vat, but we all understand it pretty much, its you that doesnt understand, with ebay, its not geared towards businesses, a normal person of the street may buy your item and be suprised with vat.

so ebay is priced with vat included, i know prices may then seem higher, but thats just tough.

Sorry if I sounded rude :redface:, I wasn't trying to give a lesson in anything

OK, I suppose what'll I'll do is put something like "VAT INCLUDED in Price !!! Reclaim Vat if registered!!" as a sub header, indicating people can claim back some money if they are VAT registered.

Thanks all

 

[Dnallov]

Thank [FONT=verdana,geneva,lucida,arial]MH1[/FONT], your a great help, and some great infomation proveded!

 

[Silk]

Ok here's the definitive ruling on VAT on eBay. You USED to be able to specify that VAT would be added to the final auction price but recently eBay made it a condition that ALL sales had to include VAT. This is to protect buyers if you ask eBay but in reality it means that eBay get to charge you Final Value Fee's on the VAT. Whether this charge is legal remains to be seen but I would have said it probably is as that is also how Amazon operate.

To date we have sold approx 33,000 items on eBay so are pretty fluent with their ever changing rules and regs.

 

[ginantonic]

I also occasionally sell catering equipment on ebay. When I started my catering business, I found you could only buy disposables (sandwich wedges, bags, etc) in huge quantities, which is a big outlay for a startup, so I split them into more manageable quantities, say, 200 salad bowls, instead of the 500 or even 5,000 available. I have a core of regular buyers, and the profit is good. Because I buy more from my suppliers, I now get a good discount, which is good. I have also bought and sold bain maries, fryers, even a fish and chip van...I suppose I should be listed as a business seller, but I do not do it all the time, and not in vast quantities. Another thing, the smaller buyers will not be VAT registered, so may avoid you if you charge VAT.

You see, I'm selling Catering Equipment, my target market are largely VAT Registered, such as restaurants etc.

 

[rothwellm]

You have several options open to you, you should have an idea of a fair price for the items you are selling. Either start the item at a price you are happy with which includes the VAT or similarly put a reserve on the item of the same price as above. If you receive bids over this, then its a bonus. This can limit the traffic to your listing though. Secondly as with all items on ebay its abit of a gamble so absorb the VAT in the final value if you choose to run a no reserve auction.
Also open an ebay shop, if an item does not sell first time, place it in your shop (lower fees for extended exposure) with a buy it now price. Then use your new listings to drive traffic to your ebay shop. Works for me!

 

[ginantonic]

Never put reserves on the items you are selling - it adds too much to the fees. Simply start the bidding at the least you are willing to take for it, including the VAT in it. Clearly state that it includes VAT, then offer the option of a VAT receipt if they want it.

 

[logi.bear]

I sell on ebay and am VAT registered

Ebay used to operate a policy where business selers could auction "plus VAT"

I am no expert -but I believe they changed the rules once they went to EU Vat rates (now swiss based VAT /eu exemptions from listing tax etc)

Why do you need to add VAT after auction - in ebays 'eyes' that is fee evasion... you state ebays fee's as high - but they are no higher then running a retail outlet?

If you are VAT reg then it seems you are ooking for a way to lower your liability ???

Apologies if im wrong

j

 

[Silk]

Logi,
I think he is only doing what eBay have done. Why pay eBay more than you need to? I can quite understand wanting to add VAT after the event when selling to business customers as that is what we expect (I own a pizzeria as well as several other businesses so have bought catering equipment of one sort or another for well over a decade).

It makes no difference where eBay are registered for TAX as it is the sellers location that determines the rules and regulations of how his/her business should be run though eBay seems to be interfering here too with their latest insistence of a 14 day return policy.

Regarding eBay and their move to a Swiss tax base I think they have been VERY underhand. Before your eBay fee's included VAT at 17.5% which you were entitled to claim back. When they moved base they charged EXACTLY the same total fee yet the VAT element was 15%. That is a stealth tax of 2.5% and I do not know how they could legally do this without an official price increase.

When you take into consideration Listing Fee's, Fee's for them holding your Stock (virtually), Relisting Fee's, Final Value Fee's, PayPal fee's etc. the average Power Seller pays probably in the region of 17 - 19% of their sales to eBay. I don't consider that particularly cheap especially as the service eBay offers its sellers had deteriorated markedly in the last 2 years. Traffic has halved, the search system is up and down like a yoyo, the combined shipping calculator has been broken since January 2007 and still hasn't been fixed. Worldwide visibility was switched off and now they have reversed that if you pay extra but none of your shop items can have it. You have to jump through hoops just so that you do not get suspended and if you are diligent you might have a fee discount at the end of the month. Even if you qualify for it they can still cock up (our final value fee discount is supposed to be 30% but all we got was 25% last time).

 

[logi.bear]

Hi Silk - I know exactly what you mean and dont disgaree, especially about trying to reduce fees... but I know ebay dont see things the same way us disgruntled sellers do !

 

[fairestcape]

e-bay is not an ideal outlet for B2B transactions - largely because of its obligation to have all prices inclusive of vat.

You're better off creating your own webshop.

 

[The_Bag_Supplier_Ltd]

Put in the Title that it includes £x.xx VAT and then explain this further in the description so that VAT registered purchasers can clearly see that the item will really only cost them the VAT less price, as they will be able to reclaim the inclusive VAT charged. They are not stupid but it doesn't hurt to remind them that the price they see is not the price they will pay in the long run.

 

[paulears]

I include the option to have a VAT receipt, and even though plenty of professional users buy my products, very few ask for a VAT receipt - which is very odd. It is also very tricky making money because lots of people are not VAT registered and have the same products, so I lose on the selling price - having to pass the VAT content on, yet my competitors pay 20% more on the cost price than I effectively do - this means my margin is lower than theirs. A real pain!

 

[The_Bag_Supplier_Ltd]

I found exactly the same. I think that you will find that a lot of companies are just using ebay for marketing purposes and are taking a loss to do so. Sometimes this is a prudent thing to do, for example, to advertise carrier bags on top most position in Google Adwords I would expect to pay around £3-£4 per click (not per sale) and, as every click is invariably not converted to a sale then it means that promoting my website is costing a small fortune with a possibly no return. By advertising a product on ebay I might earn little or less than nothing but the sale is a definite sale to a customer who will probably be open to other purchases too. Very often I will earn pence or lose money but I guess that the point is even if I lose a pound or two it is still cheaper than Adwords and a near 100% conversion rate when the customer hits the Buy Now button. It depends on whether you are playing the long game or the short game I suppose.

 

[johndon68]

Given that, until today, the last post in this thread was made 6 years ago I reckon that the OP has it sorted by now

John

 

[The_Bag_Supplier_Ltd]

Lol... yes but in the absence of any other replies of the same ilk I guess that the answer is still as apt today. Hope someone else gets some use out of it.