• The above Banner is a Sponsored Banner.

    Upgrade to Premium Membership to remove this Banner & All Google Ads. For full list of Premium Member benefits Click HERE.

  • Join The Silver Forum

    The Silver Forum is one of the largest and best loved silver and gold precious metals forums in the world. Join today for FREE! Browse the sponsors topics (hidden to guests) for deals and offers, check out the bargains in the members trade section and join in with our community reacting and commenting on topic posts. If you have any questions whatsoever about precious metals collecting and investing please join and start a topic and we will be here to help with our knowledge :) happy stacking. 

BackyardBullion

The ridiculousness of doing business in the UK on eBay

Recommended Posts

I recently scored an awesome haul from my local post office - I got 190x "G" 10p coins in the alphabet series!

Awesome stuff for sure. 

But, doing business in the UK is apparently ridiculously hard and basically not worth the time.

Makes me a bit fed up to be honest, that a market rate for a coin is X but that actually yields nothing for a business, especially one that is VAT registered. 

Ebay says they go for £1.60 per coin, an incredible profit margin you might think....Until you realise the following:

Sale Price: £1.60

Cost of coin: 10p

eBay sellers fees: 16p

PayPal Fee's: 25p

Postage: 83p (or 61p if you can work out how to get it flat enough for a regular letter) 

VAT liability for £1.60 gross price: 27p

Total costs: £1.61

So you lose 1p

Even if you make a profit on it you would pay 30% of those profits in Tax. 

I know there are benefits and profits to be had for multiple listings and saving on aggregate postage costs - but seriously, it should not be this hard to do business in the UK 

I am learning more and more that VAT is not truly a tax on customers - it is a tax on businesses. Customers are obviously happy to pay a market rate (inclusive of VAT) for items - which basically means that UK (and EU) businesses will be losing on that profit. 

Sorry, ranting now - basically the UK sucks for small businesses wanting to grow. 

 

 

IMG_20190402_171010.jpg

Share this post


Link to post
Share on other sites

I sell partially on eBay for a living and agree completely. I don't know how it is that people make any money at all selling low value items. The cheapest item I will list in my eBay shop is £3 and at that price I get back around £1.55 once postage (large letter), and fees have been paid. Thankfully there is another dedicated marketplace for what I sell and over the last couple of years I have moved most stock over there. On that platform I'm not forced to provide "free" shipping and the fees are halved.

I'll also point out this isn't a UK thing...  this is an eBay thing and it is the same (or worse) no matter where you are in the world. In some areas that have higher postage costs (thinking my home country of Canada here) it is dramatically worse. My little home business buying and selling what I do gives me a comfortable life here in the UK. In Canada I would go bust quickly as the Canada Post rates would just make it unsustainable. I'd have to raise prices and just wouldn't be able to compete.

eBay is good for the larger higher value items especially if you make use of the Global Shipping Programme. Most high value orders I ship out these days go out of the country via eBay's GSP and I really can't praise that system enough. For low value items though...  its just not worth your time.

Share this post


Link to post
Share on other sites
2 minutes ago, AppleZippoandMetronome said:

eBay is good for the larger higher value items especially if you make use of the Global Shipping Programme. Most high value orders I ship out these days go out of the country via eBay's GSP and I really can't praise that system enough. For low value items though...  its just not worth your time.

Obviously suits sellers but as a buyer the GSP charges are horrendous and I refuse to use this service, so sellers are not getting my business for sure.

Share this post


Link to post
Share on other sites
Just now, Pete said:

Obviously suits sellers but as a buyer the GSP charges are horrendous and I refuse to use this service, so sellers are not getting my business for sure.

Its is a shame that has been your experience. I've used it as a buyer multiple times and have been very happy with it. I like that everything is up front and there are no surprises. I'd rather go through the GSP than roll the dice and get surprise handling, VAT and duty charges.

I will say though the GSP only makes sense for large items. Small items can often be shipped direct for cheaper. In all my listings I encourage buyers to message me directly for a direct shipping quote if the GSP charges are absurd.

Share this post


Link to post
Share on other sites

It does suck 

I run a family run carpet shop we are a small business but have a really good turn over. We desided 15 years ago to leave a big chain carpet retailer and start on our own we desided that we needed to be on a big retail park near the big chain. The rent was expensive but if it was going to work thats where we needed to be the risk played off the big chain paid all the advertising cost to get people on the site we under cut there prices and for 10 years all was good but greedy landlords screwed us they doubled the rent in 10 years and over the next 5 years at every rent review it went up. We knew if it carried on going up over the next 10 years we would be out of business. We was lucky as another company had been offering to take the lease over for 18 months we held out until everything was in our favour financially and relocated to another retail park which is just as busy and the rent is the same as the old one 15 years ago only time will tell if it works out but it was garenteed to fail at the other site within 10 years anyway

The point is the UK dont make things easy for businesses at all.

We all pay our rates taxes and vat as small businesses and they let the large company's get away with murder and let landlords get away with charging what they want as Mike Ashley said greedy land lords are to blame for 3 house of Fraser stores closing thats a min of 30 jobs gone 

Sorry about my little storie just getting it of my chest 

Share this post


Link to post
Share on other sites
1 minute ago, Norskgeld said:

Small businesses are deliberately being squeezed out in favour of large companies and huge corporations.

Seems to be the business model for UK PLC.

Agree as its a argos going into our old unit 

Share this post


Link to post
Share on other sites
1 minute ago, jacobkenn said:

It does suck 

I run a family run carpet shop we are a small business but have a really good turn over. We desided 15 years ago to leave a big chain carpet retailer and start on our own we desided that we needed to be on a big retail park near the big chain. The rent was expensive but if it was going to work thats where we needed to be the risk played off the big chain paid all the advertising cost to get people on the site we under cut there prices and for 10 years all was good but greedy landlords screwed us they doubled the rent in 10 years and over the next 5 years at every rent review it went up. We knew if it carried on going up over the next 10 years we would be out of business. We was lucky as another company had been offering to take the lease over for 18 months we held out until everything was in our favour financially and relocated to another retail park which is just as busy and the rent is the same as the old one 15 years ago only time will tell if it works out but it was garenteed to fail at the other site within 10 years anyway

The point is the UK dont make things easy for businesses at all.

We all pay our rates taxes and vat as small businesses and they let the large company's get away with murder and let landlords get away with charging what they want as Mike Ashley said greedy land lords are to blame for 3 house of Fraser stores closing thats a min of 30 jobs gone 

Sorry about my little storie just getting it of my chest 

Yeah this is a big problem. Business rates and rent are utterly absurd. Before I decided to do my own thing I worked in restaurant management and all of the restaurants - which were good, thriving businesses that won awards and gained global attention - wound up closing after hikes to rent and business rates made them less desirable for the owners.

I am currently in the (seemingly never ending) process of looking for a house and one of the musts on my list is a separate space where I can run my business. One of my biggest fears with that though is the council decided I have to pay business rates on that space. From my understanding I think I'll be fine but it is a big fear of mine. Everyone talks about the death of the high street but unfortunately the councils and larger government have gone out of their way to make having a dedicated selling space as difficult as possible for small businesses.

Share this post


Link to post
Share on other sites

OMG don't let me start, running a small business in the UK is harder than climbing Mount Everest.

I have been running my family business for the last 7 years, the family started to leave the business one by one, since February 2016 I have been running this business all on my own without any family member to help me, when I took the business over from the family in 2016 we only had one part time employee, now we have two full time plus one part time employees working for us and the business has grown soooo much over the last 3 years which is only because I have been working between 60-80 hours every week, day off ? what is a day off ? don't even talk about it, it is not possible, If I am lucky I can take a Sunday or half a Sunday  off every two or three weeks.

holidays ? I have not been on a holiday for 4 years, I feel like a slave at this point to be honest with you.

 

 

Share this post


Link to post
Share on other sites

Frankly it's the business rates that are the big con. I could never see the justification for charging them at all.

The business generally uses none of the local council services and tax is paid on profit, so why should the local council get a cut up front?

The business will likely have a separate contract for waste, does not use social services , education etc.

Perhaps the case could be put for paying a contribution to police and fire services but having a separate contract for these could be arranged I'm sure.

Share this post


Link to post
Share on other sites

You are new to VAT - you appear very intimidated by HMRC - you imagine they will be coming to get you - you won't setup an limited company to separate your real business of poured silver off from these other bits and pieces - there are ways to avoid VAT and other taxes but you don't - so this is what happens.

Share this post


Link to post
Share on other sites
51 minutes ago, sovereignsteve said:

Frankly it's the business rates that are the big con. I could never see the justification for charging them at all.

The business generally uses none of the local council services and tax is paid on profit, so why should the local council get a cut up front?

The business will likely have a separate contract for waste, does not use social services , education etc.

Perhaps the case could be put for paying a contribution to police and fire services but having a separate contract for these could be arranged I'm sure.

The problem is councils are run by the same type of brain  dead individuals who run the government, they have zero insight into how business works all they see is a money tree.

I remember when I was in business talking to a night club owner who was struggling for various reasons. Anyway to cut a long story short I told him to approach the council to see if they could give him a breather for 3 months or lower his ridiculously high business rates. Basic answer f off. He went under 12 months later,8 full time jobs gone plus part timers as well.

Site remained empty for years so the council got nothing at all in rates.

Share this post


Link to post
Share on other sites
5 minutes ago, motorbikez said:

The problem is councils are run by the same type of brain  dead individuals who run the government, they have zero insight into how business works all they see is a money tree.

I remember when I was in business talking to a night club owner who was struggling for various reasons. Anyway to cut a long story short I told him to approach the council to see if they could give him a breather for 3 months or lower his ridiculously high business rates. Basic answer f off. He went under 12 months later,8 full time jobs gone plus part timers as well.

Site remained empty for years so the council got nothing at all in rates.

Reminds me of a local video rental business in my home town, (yes there are still working video/dvd rental shops).  This business was situated in a very desirable historic part of the town in a small shop which also provided a cinama screening service.  Apart from business rates which I am sure were high, not to mention competition from streaming services, the main issue was the landlord constantly raising the rent.  The last time about 3 years ago the landlord called their bluff when the shop threatened to move. They successfully did and the end result is the property owner is sitting on an empty shell. 🤣

Moral of the story to landlords don't cook the golden goose!

Share this post


Link to post
Share on other sites

This is where your tax cuts, VAT refunds and other benefits come into play though. 

BYB uses 4 rooms in your house to run the business (How many ever it is), this includes internet, water, electric, rent / mortgage, car to post things at local post office, posting things to the assay office, equipment and food (all the way down to the paperclips) etc all of which will return money you would not otherwise been able to claim back.

Fees and costs to do business across multiple online or offline platforms all become write offs.

I know it is a weird and stressful time right now for the BYB household but if you havnt already I would seek some advice on how to maximise your business benefits, the government will make sure they squeeze every single penny from you and in return you should do the same to them. 

Edited by Robjw

Share this post


Link to post
Share on other sites

When I bring up the issue of taxes here people say that is just the cost of a good society or some other BS. People want free health service, free childcare and free school meals, bennies for all, someone has to pay for it. 

Claw as much of that tax back from the scum in government as possible. Use every allowance. Claim everything back, every penny of tax on every drop of fuel for your car (now a business asset), ect.  

Share this post


Link to post
Share on other sites

I have run a business that is VAT registered for many years and employ about 20 people so the burden of responsibility is huge. My advice would be to separate the pouring business into a limited company and if you hit the threshold then make that VAT registered by all means if it makes sense. You can then not be VAT registered personally and carry out all the other things that you do as an individual. I would argue that the group orders are not a sale as such but an agency kind of deal where each transaction is made on behalf of an individual and you should only be accounting for your service charge and that should be your only turnover.

It is the same with travel agents or hotel booking services... lots of stuff on the web to read...

 

"I agree with James and Loh. Only the commision element (ie the agents actual turnover) shoould be reflected as turnover for the company, as in the case of Hotel reservation agencies." web

Essentially you are taking an order for x item at y price bought from a third party. If you pass this on at cost then you have no commission on that order. I think what you need to do is pass on at cost and make a facilitation charge or receive income from the suppliers for volume. The turnover is ONLY the facilitation charge or the volume charge and this is likely to be under the VAT threshold for a long while.

 

 

Share this post


Link to post
Share on other sites

Sounds like the problem isn't Ebay/UK per se, instead the business model of selling small value items on a relatively high rent service that's had a significant change with VAT status.  I suspect many sellers aren't VAT registered to worry about that cost, work around, or scale up to compensate.  Isnt the VAT on ebay, paypal fees reclaimable and post zero rated?  I often wonder buying small items for >£2 how the seller is making any money, buy bulk at sell higher margin with minimal overhead doesnt seem enough unless its a hobby or high volume.  After all that is the (original) market for Ebay, hobby sellers and online car boot sale. 

And yes, many say VAT is a tax on business because its transparent to consumers even if incident is upon them. Not unique to UK or Ebay. 

5 hours ago, AppleZippoandMetronome said:

...Thankfully there is another dedicated marketplace for what I sell and over the last couple of years I have moved most stock over there. On that platform I'm not forced to provide "free" shipping and the fees are halved.

Is this a secret marketplace?  Reason Ebay is so dominant is lack of traction of alternatives, they dont seem to have the volume to attract sellers, so dont attract enough buyers, so... around it goes. 

Share this post


Link to post
Share on other sites
Just now, Martlet said:

Is this a secret marketplace?  Reason Ebay is so dominant is lack of traction of alternatives, they dont seem to have the volume to attract sellers, so dont attract enough buyers, so... around it goes. 

No secret. I don't name it because it isn't an eBay substitute since you can only buy one thing there. Anyone interested in that one thing though knows the site due to its prominence. I do my best not to go in to too much detail regarding what I sell since all my details are very much openly attached to my business. There aren't many others in the UK selling what I sell on the scale I sell it so I don't think it would take much to connect the dots. Rest assured...  I'm not hiding some great eBay substitute.

Share this post


Link to post
Share on other sites
20 hours ago, AppleZippoandMetronome said:

No secret. I don't name it because it isn't an eBay substitute since you can only buy one thing there. Anyone interested in that one thing though knows the site due to its prominence. I do my best not to go in to too much detail regarding what I sell since all my details are very much openly attached to my business. There aren't many others in the UK selling what I sell on the scale I sell it so I don't think it would take much to connect the dots. Rest assured...  I'm not hiding some great eBay substitute.

Been trying to solve this riddle for the last day 

Share this post


Link to post
Share on other sites
On 16/04/2019 at 18:24, AppleZippoandMetronome said:

Its is a shame that has been your experience. I've used it as a buyer multiple times and have been very happy with it. I like that everything is up front and there are no surprises. I'd rather go through the GSP than roll the dice and get surprise handling, VAT and duty charges.

I will say though the GSP only makes sense for large items. Small items can often be shipped direct for cheaper. In all my listings I encourage buyers to message me directly for a direct shipping quote if the GSP charges are absurd.

GSP sucks in 9/10 on my purchased from USA, lost item is a kiss good bye and the VAT and duty charges is as well gone

No more eBay /PayPal purchases on metals items

its a direct shipments into a thief dent :) lost is a certainty 

Share this post


Link to post
Share on other sites
51 minutes ago, flim said:

GSP sucks in 9/10 on my purchased from USA, lost item is a kiss good bye and the VAT and duty charges is as well gone

No more eBay /PayPal purchases on metals items

its a direct shipments into a thief dent :) lost is a certainty 

That is fair. Overseas orders for metals aren't something I would entertain GSP or not so I agree there. There is just too much that can (and seems to regularly) go wrong there.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.