Need advice on how to expand my business

[José Airosa]

When you advertise on FB, you must make a big deal about the fact that you are based in the UK, because that's your USP compared to them (and I think I know who they are).

Assuming your drop-shipper is UK based, that is!

It's based in Germany, but I do get the items in the Uk in less than 3 days. This plays into the 5 to 10 days delivery window.

I did do that. I even did A/B testing with different campaigns. I do get traffic on the website, but mostly people that come over, check a couple of pages and leave.
I was even using that gallery advert type where you can put 4 different products (that's what the competition use as well).

 

[José Airosa]

But do people search on that term? I would guess that the search terms with higher conversions are searches for specific figures.

Yes, true, I would say that 80% of the people know exactly what they want and search for that. But I do get a fair bit amount of customers that go through quite a lot of pages.

 

[japancool]

It's based in Germany, but I do get the items in the Uk in less than 3 days. This plays into the 5 to 10 days delivery window.

Ah, I know who you mean although the name escapes me right now. We were a few stands away from them at London MCM last time.

 

[boring-friday]

Definitely un register from vat.

Are you dropshipping from someone in the UK or what? Whats the affiliate website you're advertising on?

 

[RyanTrustSpot]

Do you currently collect customer reviews, since that can be a great way to increase your business legitimacy, trust and of course bring new traffic to your site?

 

[José Airosa]

Definitely un register from vat.

Are you dropshipping from someone in the UK or what? Whats the affiliate website you're advertising on?

Can you explain how I make more money by not being registered for VAT?

I'm dropshipping from a big supplier in europe. They are based in Germany. I'm advertising, at the moment, at myfigurecollection.net. There are other websites I'm looking into advertising on as well.

 

[José Airosa]

Ah, I know who you mean although the name escapes me right now. We were a few stands away from them at London MCM last time.

Will you be there this year?

 

[José Airosa]

Do you currently collect customer reviews, since that can be a great way to increase your business legitimacy, trust and of course bring new traffic to your site?

If not check out TrustSpot - trustspot.io Free to use and an awesome way to grow your business.

I'll definitely look into that. I'm trying to manage everything as currently I'm doing all of this alone, while still keeping my normal daytime job.
I was approached by feefo, but at this point they are a bit more expensive than I was hoping.

 

[japancool]

Will you be there this year?

Yes, we will.

 

[José Airosa]

Yes, we will.

Ah awesome! I'll most likely be there as well. Probably not with a booth, but just visiting, would be great to meet you guys

 

[japancool]

Can you explain how I make more money by not being registered for VAT?

I'm dropshipping from a big supplier in europe. They are based in Germany. I'm advertising, at the moment, at myfigurecollection.net. There are other websites I'm looking into advertising on as well.

If you are registered for VAT, for example:

Your buy price - £100 (ex VAT).
Your sell price - £150. inc VAT = £180. Your profit = £50.

If not registered for VAT:

Your buy price - £120 (inc VAT)
Your sell price - £180. Your profit = £60.

So you make 20% more profit. However, you would be charged German VAT (which is 19%) and so things might be a little different - assuming they pay commission gross of VAT, which they should.

 

[japancool]

I'll definitely look into that. I'm trying to manage everything as currently I'm doing all of this alone, while still keeping my normal daytime job.
I was approached by feefo, but at this point they are a bit more expensive than I was hoping.

We get reviews on our FB page - all of them unsolicited. But we also run our own FB group, and if there's a question of trust, we just point people there.

 

[José Airosa]

If you are registered for VAT, for example:

Your buy price - £100 (ex VAT).
Your sell price - £150. inc VAT = £180. Your profit = £50.

If not registered for VAT:

Your buy price - £120 (inc VAT)
Your sell price - £180. Your profit = £60.

So you make 20% more profit. However, you would be charged German VAT (which is 19%) and so things might be a little different - assuming they pay commission gross of VAT, which they should.

But that's the thing, my supplier still sells me all the items including VAT. Even tho they're German based, they have a UK company that deals with all orders. So I get invoiced and charged 20% VAT by a UK company. Items are shipped from Germany tho.

The calculations that I'm currently doing are:

£120 - Buy price (inc VAT 20%)
£x - Payment gateway fee + logistics (inc VAT 20%)
£180 - Sell price (inc VAT 20%)

Paid VAT = £30 (sold item) - £20 (supplier) + £x (logistics)
Profit = £180 - £120 - £x - Paid VAT

 

[japancool]

OK, but now work out what your profit is assuming you sell it for the same price but are not VAT registered.

Basically, the net effect of not being VAT registered is that your profit rises by 20%.

So in your example, ignoring £x for a moment, your profit is £180 - £120 - £10 = £50, which is the same as in mine.

If you're not VAT registered, you ignore the -£10, so you make £60.

 

[José Airosa]

OK, but now work out what your profit is assuming you sell it for the same price but are not VAT registered.

Basically, the net effect of not being VAT registered is that your profit rises by 20%.

So in your example, ignoring £x for a moment, your profit is £180 - £120 - £10 = £50, which is the same as in mine.

If you're not VAT registered, you ignore the -£10, so you make £60.

Yes, that makes sense, I understand.
I need to think how I'm going to go around with that, but for now, given all the things I still need to do and improve I think I'm going to leave it as it is. If I had people working for me it would be easier to focus on other things.

 

[japancool]

The other advantage is, of course, you're not paying your accountant to submit VAT returns!

 

[José Airosa]

The other advantage is, of course, you're not paying your accountant to submit VAT returns!

True, my main reason to get an accountant and do all of this is mainly because I had no clue of how any of this works, and to be really honest, reading online just makes me more confused than clear on how everything fits together. So to avoid issues in the future I decided to do go full on hehe, and also with the ambition to make the business grow as much as possible.

 

[AllUpHere]

True, my main reason to get an accountant and do all of this is mainly because I had no clue of how any of this works, and to be really honest, reading online just makes me more confused than clear on how everything fits together. So to avoid issues in the future I decided to do go full on hehe, and also with the ambition to make the business grow as much as possible.

In a business like yours you need to differentiate yourself from all the people who are playing at it. Any business that isn't VAT registered is simply advertising the fact that they don't make any money.

I think you are doing the right thing trying to build a proper business from the off, rather than playing at it and hoping for the best.

 

[japancool]

In a business like yours you need to differentiate yourself from all the people who are playing at it. Any business that isn't VAT registered is simply advertising the fact that they don't make any money.

I think you are doing the right thing trying to build a proper business from the off, rather than playing at it and hoping for the best.

It doesn't make any difference to buyers. Most won't know or care whether you're VAT registered or not, not that they really understand what that means anyway.

 

[Raw Rob]

It doesn't make any difference to buyers. Most won't know or care whether you're VAT registered or not, not that they really understand what that means anyway.

Totally agree with this. I'm sure most people don't even know what it means, I'm sure I didn't until after I started my own business, and even now I understand, it really wouldn't make any difference to who I would buy from.

 

[José Airosa]

It doesn't make any difference to buyers. Most won't know or care whether you're VAT registered or not, not that they really understand what that means anyway.

I agree with that, well before I thought differently, but seeing how some customers use the shop, they miss 70% of things I've added to the page that provide extra information, etc. Hardly anyone looks at the footer, or the about us page.

 

[AllUpHere]

I agree with that, well before I thought differently, but seeing how some customers use the shop, they miss 70% of things I've added to the page that provide extra information, etc. Hardly anyone looks at the footer, or the about us page.

It's not only buyers you need to think about if you want a proper business. Building relationships with other businesses and suppliers is one example of things that will be more difficult if you are seen to be playing at it.

 

[José Airosa]

It's not only buyers you need to think about if you want a proper business. Building relationships with other businesses and suppliers is one example of things that will be more difficult if you are seen to be playing at it.

Fair enough, that's true as well - For now I'm going to keep things as they are

 

[Henry Simons]

Biggest issue with stopping ads on google is that at the moment I'm getting quite a bit o traffic from there. But I'm looking into focusing on finding forums that I can advertise.

But what use is the traffic if it's not converting? At least look at ways to reduce the spend, have you added negative keywords, looked at when to show ads e.g. might not be profitable to have people clicking on your ads during work hours when the sales come in via this channel at the weekend?

 

[José Airosa]

But what use is the traffic if it's not converting? At least look at ways to reduce the spend, have you added negative keywords, looked at when to show ads e.g. might not be profitable to have people clicking on your ads during work hours when the sales come in via this channel at the weekend?

That's a very good point. To be really honest I didn't account for the power of negative keywords.

Completely reviewing my keyword usage now

 

[James Hawkman]

Did you try analysing where you target audience can me or are? Are you targeting one specific city or more? You need to carry out a survey for this to identify where your target audience is other than the city you are in.

 

[japancool]

Did you try analysing where you target audience can me or are? Are you targeting one specific city or more? You need to carry out a survey for this to identify where your target audience is other than the city you are in.

Who said he was only targeting the city he was in?