Ebay forces upgrade to Business due to new HMRC regulations

[sportex-uk]

Hi All.

I've received an email from ebay forcing me to switch to business account due to the volume of my recent sales. Customer service explained that I exceeded £1800 in one month, so they act in line with new HMRC regulations. The email is a bit threatening: "We need you to make these changes to your account within the next 21 days. If you don’t, your selling privileges may be blocked. This includes listings ended and loss of selling history."

However, As I'm not ready to go business and I consider my increased activity as temporary, Customer Service advised that if reduce my sales volume, I can stay private. Has any of you passed through this process?

Also, what happensto your existing promo listings if you switch to business? Are they allowed to continue on promo terms and with 'no returns accepted' until they sell or end?

[howmuchtobid]

As a private seller you were happy to have over 400 listings, now as a business seller you will be moving to 100 listings a month.

Say no more.........

[sportex-uk]

If you do care that much about my business, I'll come with an explanation. I normally have around 100 active listings, peak 150. Stock that is selling quickly is generally scarce and I'm going to be a bit more selective to avoid peg warmers, especially now, when sale period is about to finish and full price season is ahead of us.

Dummy listings will go off shortly, as I don't really need them. It is very unlikely I'd reach 250 per month, as I wouldn't have enough time to operate on that scale.

Hopefully my explanation is acceptable to you.

[howmuchtobid]

As many of us know your dummy listings (as you call them) were set up to take advantage of FVF promotions as a private seller however let's not let the truth get in the way.

[sportex-uk]

Youu're awesome in your nonsense 🙂 Last 100 FVF listings I've received were used to renew my active listings, these dummy are just standard ones. What else would you like to find out?

[sheba-knows-best]

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@john8150_0 wrote:

This thread has been great fun but it's already cost me 3 bags of popcorn.

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Wait until you keep coming back with a whisky snifter before bed...

[rainbowtrax]

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@sportex-uk wrote:

I had VAT added to fees on a private account already, see attached. Is it anything different on BA?

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Yes, very different. As stated somewhere earlier in this thread, fees for private sellers already include the VAT within the stated figures and percentages whereas fees for business sellers have VAT added on top of the stated figures and percentages.

Your calculations in the next post are all out by 20% because you haven't factored this in.

Your screenshot shows a final value fee of 12.8% plus a fixed fee of 30p. This is displayed in the screenshot with the VAT separated out which is why the percentage is displayed as 10.67% and the fixed fee as 25p. Multiply those figures by 1.2 and you get the advertised fee rates for private sellers of 12.8% plus 30p. This is what is meant when people tell you that the VAT is included in private sellers' fees. Then, of course, you've got your 80% discount, taking your fees down to a grand total of £2.45. You also pay no insertion fees regardless of how many months it takes you to sell your item.

Now, take the same £84.00 sale as a business seller. First off, you pay to list for every month. That's a 30p listing fee each month but don't forget that the VAT isn't included in the advertised fees so that's actually 36p, not 30p each month. If it takes 2 months to sell then you're shelling out 72p on every single listing before you even make a sale. Whether you have 100 or 400 listings, it all adds up. Then you make the sale. The business seller final value fees are 11.9% for that category (not one of the worst) plus 30p. But don't forget the VAT. So it's actually 14.28% plus 36p. That gives a fee of £12.36. No 80% off so that's what you'll pay. 

So the same listing, selling within two months on a business account, will cost you £13.08 in fees as opposed to £2.45 in fees as an illegal trader. So to cover that extra, you'd need to up your price by over a tenner, losing your previous unfair advantage of a cheaper selling price so possibly selling less items. Or you could keep prices the same to maintain your sales levels but take a hit on your profits of £10.63 on an £84.00 sale.

Your calculations of insertion fees are also out by 20%. 100 listings a month would cost you £36.00, not £30.00. A basic shop for a business seller is £27.00 plus VAT, so actually £32.40. With that you get just 250 listings included. The same shop for a private seller or illegal trader costs only £19.99 (with no additional VAT) and for that the seller gets their 1,000 free new listings a month plus an additional 100 new listings a month and of course their unlimited monthly free listing renewals.

Obviously, you're lucky in that the business seller FVF on trainers over £100 is reduced to just 7%, meaning that you can at least claw back some of your losses from the cheaper ones. Most categories don't have this bonus. Don't forget the VAT though. Even that 7% is really 8.4% once you add the VAT.

As a business seller, if you're planning on having any more than 90 as the total of new listings plus renewals in a month then a basic shop subscription is a no-brainer.

[litp*records]

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@rainbowtrax wrote:

Why would you brand them as "greedy sharks"? People are just trying to earn an honest living. As has been explained over and over, their prices will likely be higher than yours because their overheads are higher than yours because they're paying the fees that are due while you're not (as you were, obviously, I know legal trading is now being forced on you). All that legal business sellers want is a level playing field where other business sellers pay the same basic rate of fees and give the same legal rights to customers.

You're a relatively new kid on the block in all of this but many of the disgruntled business sellers have seen illegal traders like yourself who have had over a decade of unfair advantages and are still not being stopped in the way you've been. Unfortunately, over time, it all adds up to a huge difference in the selling costs incurred by two similar businesses, one trading legally and the other illegally. To you, this is just a sideline but to many legal business sellers, this is their livelihood and not a game.

Surely the greedy sharks are the illegal traders greedily grabbing all the free listings they can get and snatching every fee discount that comes their way, none of which they're actually entitled to.

Of course, the illegal traders (such as your former self) are only partially to blame. A lot of the culpability for this lies firmly at ebay's door as they have more than a decade of inactivity and even encouragement of this illegal behaviour behind them. Indeed, even as recently as this month, ebay CS have been freely giving out incorrect legal advice to illegal traders by telling them in phone calls that it's fine to trade illegally from a private seller account. You've just walked into the resulting storm that's been brewing for years and ignited it further.

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Yep. Absolutely. Ignorance of the law is no excuse, but it takes two to tango... it all started when Ebay starting giving private sellers 1,000 free listings *a month*.   Even if you somehow had 1,000 Ebay-worthy things in your loft (as the apologists would argue), you'd have your work cut out to list 1,000 things in one month.  It's like a full-time job....  because it is!

When I started on Ebay in 2004 (not this account btw) you paid for each listing and there were no fee promos, no shops and certainly no "promoted listings"!  But then again I don't recall there being a delineation between private and business sellers, either.  That was truly a level playing field!

[sportex-uk]

Thank you for extensive response.

So adding £10 instead of 10% for the most listings would balance the sheet.

I guess finding ways to mitigate the increase is the key.

- Rethinking stock to give up on minimal profit items

- I've noticed non-FVF-promo listings usually get more views/watchers despite higher price for the same item

- I'm awaiting next seller evaluation, when I should get Top Seller badge

- All my listings would already qualify for Premium Service, what gives 10% off fees and 'maximum visibility in 'Best Match search results'

- So slow down a little bit and see how things go

- ebay is the greediest shark in the ocean

[rainbowtrax]

That's just the monetary difference for that particular price. You'd need to work it out for different price points as it'll vary. Even then, that's just a very basic comparison. There will be other factors to consider that you can't quantify and can only try things out to find out. Eg, how much, if at all, will your returns increase? Will your sales increase as buyers may have more confidence in buying from a bona fide business. Or do they not care? Will the opposite be true because they only care about the price? If so, how much will your sales volume be impacted by the price increase? Will it be so significant that you'd be better off maintaining the prices and taking the hit on profits? Or will it be not much?

Trainers aren't my area but my guess is that buyers of trainers are much like buyers of most things. They're far more likely to be influenced by price than by morals. You get average buyer, A, to ebay and they've decided that they're going to be buying a particular pair of trainers so they get the search results up to make their decision. For simplicity, let's say there are two identical listings, one from seller B, legit business seller and one from seller P, illegal trader. Seller P's pair are £10 cheaper than seller B's. Is A more likely to buy from B on moral grounds or from P because they're cheaper? Repeat that ten times. Who gets the most sales? You won't get a feel of exactly how it works out until you sell as B for a while and compare your sales to when you were P.

I have a real life example from a few weeks ago. I had an audio book listed at a fiver plus £2.50 postage, pristine condition and in a brand new case. I'm seller B. Seller P has the same title listed, scratched up tapes but playable, cracked and scratched case covered in sticker residue, worn and water damaged inlay but priced at only £4.60 including postage. Along comes average buyer, A, to make their decision. Now, A is a previous customer of mine. They've bought 5 items from me over the last three months and left good feedback for all of them so they've tested the quality of the merchandise from me.

What happened next?

[*knight-rider*]

`If ebay allowes it, people would have be daft not to taking advantage of it. And if they risk with avoiding taxes? That's their problem, not yours. If someone makes 3-4 grand income per year, so they're not under radar, are they real problem for you?`

Given that no doubt you are an adult and clearly pay taxes, i actually find this comment staggering!

If people are making money and sometimes alot of it, illegally, it effects everyone to some degree or another, because the people who don`t pay their dues, leads to people who do pay, paying more for the people who don`t. A good example is the motorist who pays an extra £50 a year on his/her premium, because over a million motorists choose not to. Shoplifters apparently costs the country over a billion pound a year, so who pays for that, everyone else because the shops add the loss to their prices ............ and on we go 🙂

Nothing is for nothing, we all pay for it somewhere, so when you say `are they a real problem to you`, i say their a real problem to everyone and say`s something when the government takes action!

[bazinga-games]

I didn't say it is up to eBay to enforce people trade legally - obviously that IS down to the seller - no-one can disagree with that. 

My comment was merely with regards to the fact that they have always encouraged 'private' sellers because of all the free listings they provide them and the fact that they have not been clamping down despite some 'private' sellers having hundreds (maybe thousands?) of listings - they are only now doing so because it apprears they are being forced to.

[myriad*seller]

Yes, I have never understood why "private" sellers get so many free listings 

[ukhaberdashery]

They are obviously selling their single sock collection.

[myriad*seller]

I don't own that many socks! 

[sagr2519]

"Even if you somehow had 1,000 Ebay-worthy things in your loft (as the apologists would argue), you'd have your work cut out to list 1,000 things in one month.  It's like a full-time job....  because it is!"

I have about a thousand books for my personal use. Most are not listed on Ebay, because I still want them. If I decided to sell all, I probably wouldn't be able to list them all in one month... but private account listings renew each month, so if they take long to sell then it's not hard to end up with 1000 listings at once.

[rainbowtrax]

Yes, you'd get to having 1,000 active listings but any that were listed in previous months and had automatically renewed do so each month for free and without being part of the 1,000 allowance for the current month. You still have an allowance of 1,000 new listings each month - which, in most cases, would soon become unnecessary if you were just clearing out your own possessions.

To make use of a good proportion of your 1,000 free new listings each month would be a full-time job - like an allegedly private seller I know of who currently has over 30,000 active listings for which they haven't paid a penny in listing fees.

[sagr2519]

Thanks for the answer.

What if I chose to renew them before the month is over, to take advantage of an FVF offer?

[rainbowtrax]

If you ended them then relisted or sell similared then they'd be taken off your 1,000 allowance for that month.

[howmuchtobid]

Ever since radek.esq was forced to become a business seller no new listings have been added, approximately two weeks ago. Funny how things change when you have to play by the rules and pay the proper fees.

Ebay really needs to get a grip on this kind of thing, it's killing off the businesses that generate their income, the fee evading private (business) sellers don't pay the bills for Ebay.

[myriad*seller]

He added hundreds of blank listings that he could edit later - obviously they came under the free listings for private sellers promotion, so he "saved money/evaded listing fees" that a business seller would pay on future listings by creating them before he changed to a business seller account