Babz media

the_lunatic_is_in_my_head

RFW wrote: »

As has been said in this thread they had an RM account and the signed for service wouldn't have been costing them £1 (whether they paid for it or not). It works on averages, so they could be paying the same postage for 99p item as a £99 item.

Regardless of averages the Signed For fee is £1.10 plus surcharge plus VAT.

Whether Royal Mail discount the Signed For fee I don't know, I assume they wouldn't as they'd rather push you to a tracked service, but it's not something that can be diluted by the average weights

Only your own internal averaging would lower it, i.e it costs 80p to send all parcels on average so that's what you count as P&P rather than what it costs individually per order.

ballisticbrian

Lots of companies have enough money behind them that they are happy to lose on products for a while to build up a customer base.

I've seen companies set up on eBay whose websites don't seem to be anywhere near the top rankings in google and I speculate they have decided to join eBay in the slim hope it will promote their web site and build up a customer base. However, the buyers on eBay tend to be the least loyal, and will simply go back on eBay and click "sort by price" everytime. I've experienced this and tested it myself over a fairly long period of time.

I actually feel quite sorry for one company that appears to be doing this right now.

I've seen other companies try to use a model where the first item is the cheapest, but when competitors put multiples up at disounted products, they are forced to do the same meaning their multi-variation listing doesn't make any money on any option. :T

RFW

the_lunatic_is_in_my_head wrote: »

Regardless of averages the Signed For fee is £1.10 plus surcharge plus VAT.

Whether Royal Mail discount the Signed For fee I don't know, I assume they wouldn't as they'd rather push you to a tracked service, but it's not something that can be diluted by the average weights

Only your own internal averaging would lower it, i.e it costs 80p to send all parcels on average so that's what you count as P&P rather than what it costs individually per order.

I don't know how I ended up defending sending 99p items by signed for service as I think it's a ridiculous thing to do.
RM have introduced and trialled various tracked services in the last few years. It isn't a big leap to think that Babz Media would have been a company using one of those, they certainly wouldn't have been paying the same amount as someone buying the service in the Post Office.

As for any other possibles, it may well be that they sent everything tracked rather than sorting through which ones were which. So if they sent 10,000 items they may have paid £10,000 for post, the 99p item would have been ridiculous but the £99 item that would have cost £7 over the counter would have been a good deal. As I said I've no reason to defend it, and it may well be as others have said.

There is enough factual information without additional speculation. They could well have been trying to build a successful business and just been naive or knew exactly what they were doing.

Tar123zan

Well, my personal observations anyway. I can prove nothing as I am not an investigator. For a while I also sold items first class items for 99p to decrease the average weight but I noticed they were selling such cheap stuff in great numbers way beyond reasonable amount to decrease the weight. I also have a business account with Royal Mail. RM was collecting packages without any paperwork - it was mainly trust issue with few checks. Later they started scanning online declarations while collecting saying that they were defrauded by a company (a few years ago collecting officer told me so, but didn't name them). Apparently this unnamed company was declaring less than 1/10th of their actual packages. Probably RM increased the regular checks on Babz as well and decided they were regularly under declaring their parcel numbers, and now they must be trying to recover loss revenue.

EDIT: For some time their prices were relatively higher than before. Maybe RM warned them and they had to add up the actual cost of logistics. And VAT wise, I might be wrong, I just remember reading similar stories about them but obviously I don't know their business history. Ebay needs to do more to make sure businesses are legit. Amazon is probably better in this, when I signed them, they asked many documents to be uploaded including HMRC ones.

RFW

Tar123zan wrote: »

Apparently this unnamed company was declaring less than 1/10th of their actual packages. Probably RM increased the regular checks on Babz as well and decided they were regularly under declaring their parcel numbers, and now they must be trying to recover loss revenue.

I find it bizarre and alarming that RM can be quite so negligent, whatever the situation. As has been pointed out if you send a franked letter with 30p short they pull you up on it, write to you and demand the difference and a fine yet they allow big companies to send hundreds of sacks a day for nothing.
Long term it's only us poor saps that use them every day will be paying for it, whatever happens.

Double_V

Is the investigation still going on ?

And how about Chinese seller on ebay, how do they pay tax to HMRC ?

Brooker_Dave

Double_V wrote: »

Is the investigation still going on ?

And how about Chinese seller on ebay, how do they pay tax to HMRC ?

They don't, they just use made up VAT numbers and underdeclare in importation.

Really low price high volume selling on ebay and amazon has become one giant scam.

Mick_McCarthy

Please note, they following is all alleged and is yet to be proven in court:

I have heard from a reliable source that they are allegedly being investigated by the HMRC for Tax and VAT fraud as well. They showed revenue of £20m in their accounts last year but a loss in the previous year. Apparently, they channelled most of their funds to Hong Kong, so when you paid them via Paypal on ebay, the money went directly into their Hong Kong Paypal account, NOT to their UK account, they showed very little revenue in their UK account. However, they were then told (probably by their dodgy accountant) to show a higher revenue in their UK paypal account so that the HMRC doesn't get suspicious, however that was too late, they appeared in the papers and on tamebay as the largest seller in the world (yes, if you put both their accounts together, they were largest by far) - this was not a good move for Babz as the source of the revenue was terapeak which is very very accurate and they are now genuinely screwed !

The fraud they were doing is exactly the same as what the Chinese sellers do, however HMRC won't touch the Chinese sellers, not one of them has ever been prosecuted.

The FUNNY thing is that ebay must have known that they were channelling funds directly to a non-UK paypal account, so in my opinion Paypal (or ebay as it was owned by them for most of the period when the money laundering was happening) is just as responsible for allowing this to occur, however as always Paypal and eBay will get away with it as the HMRC don't touch large corporates.

Other facts:

(1) Their assets have all been ceased from their cars (2 Bentleys and an Audi R8), properties ... designer watches
(2) They have a number of lockups across London, one I know of in Wembley, Royal Mail don't even know about this and they continue to pay the rent on this, this is stock that they don't want Royal Mail / HMRC to get a hold of
(3) The owner is apparently a very nice person, he took Royal Mail staff on holidays and gave expensive presents to ebay and Groupon merchandisers to ensure that their products got the top promotions, some have said that he had a lot of people in his pockets.
(4) They told all their workers to comeback at the end of October, they thought they could negotiate this with Royal Mail, however once the HMRC got involved the payout would be too large and they'd probably spend 6 months in prison then give HMRC the millions they owe them.

soolin

I find it intriguing that so many people join up to post negative stuff about Babz. All of whom have 'reliable sources'.

I do hope all these competitors have their own houses in order

RFW

soolin wrote: »

I find it intriguing that so many people join up to post negative stuff about Babz. All of whom have 'reliable sources'.

I do hope all these competitors have their own houses in order

Quite. There's enough factual stuff without adding stuff that doesn't really add up.
If they do owe Royal Mail a few million they wouldn't be too bothered if they had a shed with 50 boxes of jiffy bags in.