Finding it hard to compete with Non VAT registered sellers

Legacy_user

on ebay/amazon. Any advice, they can keep their prices lower because they are not paying VAT

ILW

What is you turnover?

motorguy

berbastrike wrote: »

on ebay/amazon. Any advice, they can keep their prices lower because they are not paying VAT

ie, they buy for £24 and sell for £36, meaning £12 net

Whereas you buy for £20+VAT and sell for £30+VAT, meaning £10 net?

System

ILW wrote: »

What is you turnover?

£250 thousand

System

motorguy wrote: »

ie, they buy for £24 and sell for £36, meaning £12 net

Whereas you buy for £20+VAT and sell for £30+VAT, meaning £10 net?

Yes you could put it like that.
In this example, That £2 difference, I only get 30p back in VAT in postage, around 30p back in VAT in ebay fees, and maybe 2p back in envelope cost.

So overall I am £1.38 behind them, and the vat man is £1.38 up.

And this difference is what they are selling it lower than me.


On 1 item I buy for £6 and sell for £12. There is a £1 vat blow, net around £60p after I claim some back. This 60p, they can sell at £11.40, I have to sell at £12. And they get the sale, because they don't have to pay the £1(60p net) in VAT.

InsideInsurance

What postage are you using that attracts VAT? Why are you not getting back anything from buying the product?

Secondly in the example above it assumes you and them are buying at the same price hence they are making £2 more than you are however if you have over 3 times their turnover (given they aren't VAT registered) then you should be buying at considerably less than they are and all you'd require is a 10% wholesalers discount to be on a level playing field

Suarez

Can't understand how you are saying you are struggling to compete when you are turning over £250,000 and they are turning over under £79,000....

System

InsideInsurance wrote: »

What postage are you using that attracts VAT? Why are you not getting back anything from buying the product?

Secondly in the example above it assumes you and them are buying at the same price hence they are making £2 more than you are however if you have over 3 times their turnover (given they aren't VAT registered) then you should be buying at considerably less than they are and all you'd require is a 10% wholesalers discount to be on a level playing field

thanks, I use Royal Mail post.

I do get the VAT back buying the product.

But if I buy at £60 and sell at £90, I get £10 back, but have to pay £15 in VAT, so thats £5 to the VAT man which is a lot of money.

I am not that stressed about paying VAT, just that it is sometimes HARD to match other non VAT registered sellers prices

Suarez

berbastrike wrote: »

thanks, I use Royal Mail post.

I do get the VAT back buying the product.

But if I buy at £60 and sell at £90, I get £10 back, but have to pay £15 in VAT, so thats £5 to the VAT man which is a lot of money.

I am not that stressed about paying VAT, just that it is sometimes HARD to match other non VAT registered sellers prices

It's the final consumer that pays the VAT so it's no cost to you.

System

Suarez wrote: »

It's the final consumer that pays the VAT so it's no cost to you.

nonsense, it is destroying my business, its a 6th of the margin between buying and selling, how is this not a cost?

ILW

Suarez wrote: »

It's the final consumer that pays the VAT so it's no cost to you.

What are you going on about?
The whole point is that the final consumer does not want to pay the VAT so take their business elsewhere.
OP needs to sell at a higher price than his non registered competition to make a similar margin.