New Sellers
It absolutely astounds me that even after the significant changes that directly impacted UK sellers whereas all Amazon sellers regardless if they are VAT registered or not, will be subject to the standard 20% VAT rate on fees. But this as not stopped most new sellers are still pricing their inventory to the point where they are making a loss or I have even seen profits of 1 pence.
I can safely state my mind is blown
I genuinely believe that a significant number of new sellers are still not aware that they are now subject to 20% VAT on their fees.
All this may be hypocritical as I am anew seller, but what I did was to raise my prices slightly to maintain my profit margins, it was not difficult.
I invite any new seller to explain the logic behind selling products on Amazon at a loss or with profit margins in single figures.
New Sellers
It absolutely astounds me that even after the significant changes that directly impacted UK sellers whereas all Amazon sellers regardless if they are VAT registered or not, will be subject to the standard 20% VAT rate on fees. But this as not stopped most new sellers are still pricing their inventory to the point where they are making a loss or I have even seen profits of 1 pence.
I can safely state my mind is blown
I genuinely believe that a significant number of new sellers are still not aware that they are now subject to 20% VAT on their fees.
All this may be hypocritical as I am anew seller, but what I did was to raise my prices slightly to maintain my profit margins, it was not difficult.
I invite any new seller to explain the logic behind selling products on Amazon at a loss or with profit margins in single figures.
5 replies
Seller_d8YGbIjNqwFxn
Often you will find sellers who are selling at what appears to be a loss
They may though have lower postage costs than you, lower supply costs, lower overheads which can allow then to price cheaper.
Sometimes selling goods at a price where you break even can result in multi buy of an item where you get significant costs on postage and leads to a profit.
They maybe clearing stock at a break even price or even at a small loss.
It is also possible they have no idea of what they are doing and not aware of the fees in place and are making a loss.
Seller_MT8rt0A2OpbCx
It's 20% of your fees, typically 20% of 15% or 3% of your selling price. If a seller in only making 18%, it's significant. If they are making 100% or more on cost, it might not be worth the effort of changing all prices straight away.
Also, it's surprising how many posts there were here in August asking why fees had increased. Clearly many don't read the Amazon news, emails, or even more shocking, other posts on this forum (a great source of amusement, information, friendly chat, but mostly amusement). I am sure there will be many more, when August invoices are checked.
