Commission changes (confused)

Hoddie

@Lawrence am I understanding this right? We're now paying 2.5% of the Import VAT as commission?

A £100 order (net of shipping and local taxes) costs £2.50 in BO commission.
A £100 order (again, net) with UK VAT (20%) costs £3.

That's not a small amount, especially as it's commission on cash that isn't ours, and on which we're paying PayPal fees as well.

My margin is big enough to cope with this but I'm not sure why the commission should be a different amount based on where my buyer is based.

I guess I'm not understanding the need for change. Surely you got £2.50 either way, even though the % was different when adding Import VAT to the calculation?

Lawrence

With the example given above, rather than receiving £2.50, we receive £1.71. I've attached a screenshot of our calculation to help explain the issue.

Essentially, without any import VAT, Brick Owl gets 97% of the commission we charge. Previously, with Norwegian Import VAT orders, we would get 61%. With the upcoming EU import changes making more import VAT the marketplaces responsibility, that would then result in a large loss of income for Brick Owl.

Generally, the amounts per store are quite small. However, the effect is larger for large orders, and stores may wish to update their shipping prices to account for the increased costs of import vat orders on a per country basis. Especially as they will also need to pay the relevant payment fees on the incoming VAT paid to them as well as process any customs declarations.

Stellar

@Lawrence have you thought about having an option to pay the fees to a bank account?

Hoddie

I see, so the issue is the PayPal commission. Isn't there a way to have PayPal divert the import vat element direct to BrickOwl at the point of the transaction, so that it isn't necessary to pay fees on it twice (first the seller, then BrickOwl)?

Lawrence

@Hoddie There is, infact there are two ways of doing it...One of them is deprecated and the other isn't available in the UK. Stripe supports that, but I decided it wouldn't be worth the administrative burden of having a small amount of the import VAT diverted via stripe, and all the rest paid manually

@Stellar has a point, I'll take another look at Direct Debit/SEPA Direct Debit

Vosblokjes

So 3% fee for UK orders and 3.13% for NO orders instead of the normal 2.5%.
I think, given the service you provide with it, it is a real bargain.

Without the VAT service I think I would have disabled shipping to UK and NO

misbi

@Lawrence That spreadsheed needs a tweak to the Commission and After Paypal columns for the Import Tax rows 😉

Lawrence

@misbi I've updated the column names to reduce the confusion

misbi

@Lawrence LOL - it was the values being out by a factor of 10 that I was alluding to!

Lawrence

@misbi They include the import tax, as the import tax has to be paid from to Brick Owl so we can remit it to the governments

markim

Does this also happen when you have an tax ID Yourself? Do you still have to pay the VAT charge then?

misbi

@Lawrence Ah, now I get it - doh 🙄