Sick of businesses registered as 'private' sellers

[nsa.ltd]

Anyone else fed up of seeing businesses masquerading as private sellers? I've reported around 40-50 of these accounts to the 'ebay for business' facebook account, and I always get told that they've then reported it from their end but nothing ever changes.

I mean look at this account, 3.6k items sold, and a private seller, or Hartmore Trading, they even have "Trading" in their name, 2.4k items sold, 1600+ items for sale, and a 'Private' seller. Absolute joke.

[btr.style]

Wholeheartedly I agree. I was doing research on some clothing sales prices and came across many more private business sellers. One had something insane like 19k items sold, almost 5000 feedback score, over 1500 live listings. I bet they were rubbing their hands together when eBay announced the free to sell clothing. No doubt they paid at least something in fees previously (selling 20+ items a day), possibly paid for a shop subscription and then eBay gave them that huge pat on the back with no selling fees for clothing. 

I know someone said here a while back, a staff member from eBay said to them how does it affect them and they said they still hit the vat threshold regardless. That's just like me with being at the threshold, but just like me, I do the same work as the private business sellers, often more but get paid less. So even if sales are fine and dandy, business account sellers still get less money after eBay have their cut. That doesn't sit right at all with me. Would I be happy or expect anyone else to if they stood in a queue at a chippy and everyone in front were given 4 large scoops of chips for a regular, only for it to be their turn and they get half a scoop? Not a chance. 

Solely over this I've been putting the stock on alternative platforms and winding down my business on eBay. eBay don't care and the staff say it means more sales for businesses, does it? Unlikely but even if it did, it's of no benefit as I already get close to the vat threshold and have to shut the business down for around 2 months a year. 

[bojangled]

It is an unfair playing field, I have reported several in the past, but nothing is ever done. 

There are 'private' sellers out there with multiple accounts selling similar products.
The reporting method doesn't give clear options.
Been brought up endless times on the weekly chat. 

I really don't care if they are registered with HMRC. I'd like eBay to take responsibility for allowing blatant fee avoidance, and do something about it. 

[kempseykate]

The thing is if ebay themselves are more than happy to lose goodness knows how much in fees, there is no point wishing for a level playing field, it will never happen until ebay actually want to claw in some of those missed fees.

[txt.ltd]

I've also reported a whole bunch of them. Their accounts are mostly still private today, and they are listing whole cases and pallets of goods for sale.

I don't stress much about it anymore. I'd rather focus time and resources on other sales channels than bother trying to compete with someone who has unfair advantages over me.

As always the government, who is supposed to use our corporation tax monies to prevent things like this, is nowhere to be seen.

It's like setting up a stall at the local market and paying the market owner £1000 to rent the space for the day, then all the non-business sellers come along and get the same thing for £900, then they sell everything at less than what you can, then at the end of the day after you have sold hardly anything, you're on your way out and the government is checking each person exiting, allowing private sellers to leave yet stopping business sellers and demanding part of the profits.

Reduce the VAT threshold to zero. It's a sign of a lazy government that a VAT threshold is so high. Instead of creating employment, they raise the VAT threshold, knowing it will foster a 'gig' economy of sorts, where they don't have to do anything but let people scrape on by. Almost as if the government isn't needed in such areas.

[txt.ltd]

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@btr.style wrote:

it's of no benefit as I already get close to the vat threshold and have to shut the business down for around 2 months a year. 

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Who's making you shut the business down for around 2 months a year? The way you write it seems like you're forced into doing it.

[btr.style]

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@txt.ltd wrote:

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@btr.style wrote:

it's of no benefit as I already get close to the vat threshold and have to shut the business down for around 2 months a year. 

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Who's making you shut the business down for around 2 months a year? The way you write it seems like you're forced into doing it.

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Well of course I'm forced into doing it. From what I understand of VAT, exceeding the threshold is a case of go big or don't bother exceeding it. 

It's the same way we are forced to pay eBay fees. Either pay them or don't bother selling on eBay. I don't want to not sell on eBay but equally I don't want to pay such high fees so I'm forced to pay them to sell on eBay. 

With VAT registration comes more money to pay out, that's how it is. Either it's then passed on to the customer with increased prices (considering there's so many private businesses who pay no fees, it would make it much harder to compete), or I take the hit. 

My choice would be to keep the business running all year round. Yet that would mean having to pay out more money being VAT registered. So I am forced to close the business down to avoid exceeding the threshold. 

[bojangled]

@txt.ltd 
'I don't stress much about it anymore. I'd rather focus time and resources on other sales channels than bother trying to compete with someone who has unfair advantages over me.'

This is true, I need to be more stoic about it. Festering achieves nothing. 

Jo

[vintagewatchpart]

I am also fed up of this. I see it constantly, 100s of sellers in my niche doing it, I see items being listed that I recognise from sales that I tried to win and was outbid that they get to win and sell on a private account with listing deals.

My favourite one at the moment is this seller that sells watch parts over 3 accounts, I reported repeatedly last year and nothing got done so in Ebays eyes they were not a business.

Then the seller, across all 3 of their accounts added their website address as a watermark across all images in every listing!

Reported them again, and they are still on private accounts and list 100 items exactly every listing weekend, they were thankfully made to remove their watermarks though so at least something worked.

But... they have a new watermark to prevent image copying and its the name of a LTD company!!

How much more evidence does ebay need to prove these 3 accounts should be business accounts?

I have to compete with this sellers price and pay 17%+ in fees compared to their measeley 3.5%ish fees from the promo.

It is disgusting practice.

[4_bathrooms]

As eBay clearly don't care I'd advise reporting such businesses to someone who might; i.e. Trading Standards. You'll have to do so via Citizen's Advice (details here) but if they're daft enough to make their company name visible it should be pretty trivial to find the rest of their details from Companies House. 

[pg_kicks]

The only issue with this is that if nobody complains then eBay will just allow it to continue, the problem will become worse and then your business becomes loss making because there are too many accounts breaking the law and eBay policy but nobody reports it as we have all become sick of it.

 I dont want any unfair advantage over Jenny who wishes to sell a pair of shoes she bought 3 months ago and doesnt wear but Is James is selling 400 pairs a month and is listing them every 2 weeks to get 80% off his fee's then I will have to continue complaining as one day James will be James x 100 and my business wont be here.

The only way things will change in this environment and in the world is if we continue to highlight it and complain, but rest assured eBay have just told us again in the weekly meeting that they take all these reports seriously, so serious there isnt even a business on a private account option to select and AI checks them, so AI doesnt know why it is checking.

[fatbobfan]

Been reporting for years, examples

Inventory of 1000/500++ Yes often

Sales history 5/7/10k+ Yes often

Feedback scores of many thousands Yes often 

Actions from my complaints 'very little' imo Just a snap shot of my complaints, 20 for February this year and thats one month in a long list of months going back

As a fee paying business seller, imo, its Ebays position to resolve, to me clear as day for sure, yes Im paying them, they should be looking after me and my interest, they also have the skills, resources and technology to resolve this in the blink of an eye, never mind our whingeing. What ever the reason they dont on either. Guessing its a money maker and again imo, to business sellers detriment

Just my opinion, and I got the daggers last time I posted on this subject (rightly and wrongly) but the system is failing the business sellers on this one and I dont blame the private accounts for doing it, they are just doing as most humans do, make the money. Ive looked at the private seller account option for an inventory issue I have as im so frustrated with the business seller cost model and the fact its not correctly/fairly policed. 

Wouldnt happen if the system stopped it, Ebay clearly dont care, they get double bubble either way,

Its a system issue, not a seller issue,

[therenewalworkshopltd]

Vat really isn't that big of a deal at the end of the day.

It's not actually costing you anything, just a bit of time.

You collect the money from the customer, deduct your VAT costs and then forward the money on to the government.

It's pretty simply to run and submit, once you get the hang of it.

Yes, there is an initial cost when you first start charging VAT, but you don't need to exceed the threshold that far to cope with it.

Far better than losing two months income, just to avoid it.

Or look at it the other way.  If your trading over 10 months at the vat threshold (90k), by closing for two months, you are effectively losing £15k of business, that you could have earned.

Even at a minimul margin of 10%, you are losing £1500!

All for the sake of registering.

[therenewalworkshopltd]

Ebay clearly dont care, they get double bubble either way,

That's the thing though, Ebay don't get double bubble by allowing business' to trade as private.

Particularly so when your looking at free listings for clothing!

So it is costing Ebay money, by not policing these properly.

[brindsey]

"So it is costing Ebay money, by not policing these properly."

Too true it is. I am dumbstruck at eBay's (incompetence?) attitude.    Many will have seen my thread on an upper high street/designer dress seller - every time she was forced into business registration she opened a new private account.  I know, for definite, five, and they let her do it.  This despite report on report by a lot of people.

So, you can play the system- when the back feedback catches up because of bad/devious practises and eBay steps in to enforce business registration, you can willy nilly just open a new ID and start the performance all over again?  

In the clothing market they are now losing a fortune in FVF's from 'private' sellers.  Where on earth are they coming from?

[pg_kicks]

They'll do it in the hope it gets people from Vinted, hoping that once they sell a few tshirts they then sell some shoes and a bag or what not and make money from them on those items. Also they can then say we have grown by 50k customers with 2m more listings than last year.

[therenewalworkshopltd]

Just realised, I calculated that slightly wrong.

90k over 10 months, is 9k per month.

So by closing for 2 months, your losing out on 18K of business.

Which at 10% is £1800! 

And obviously if your margins are higher than that, it could be considerably more that your losing out on.

Even allowing for the fact, that you will be paying VAT, which will cost you approximately 7.5%, if you were to use the flat rate scheme (assuming you don't increase prices).  But it can be more or less, depending on your expenses etc.  It's a calculation that needs to be worked out properly, preferably with the help of an accountant.

So if you turnover 90k in 10 months at a net profit of 10%, you are making £9k per year.

If you register for VAT and work on the flat rate scheme with no changes to prices etc, then you turnover 108k, with a profit of 10k per year approximately.

ie. 108k - VAT of 8.1k = 99.9k turnover, with a profit at 10% of 9.99k

So in the example above, it makes far more sense to be vat registered, as you are making 1000 per year extra.  Obviously, the bigger the margin, the more sense it makes.

[txt.ltd]

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@btr.style wrote:

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@txt.ltd wrote:

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@btr.style wrote:

it's of no benefit as I already get close to the vat threshold and have to shut the business down for around 2 months a year. 

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Who's making you shut the business down for around 2 months a year? The way you write it seems like you're forced into doing it.

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Well of course I'm forced into doing it. From what I understand of VAT, exceeding the threshold is a case of go big or don't bother exceeding it. 

It's the same way we are forced to pay eBay fees. Either pay them or don't bother selling on eBay. I don't want to not sell on eBay but equally I don't want to pay such high fees so I'm forced to pay them to sell on eBay. 

With VAT registration comes more money to pay out, that's how it is. Either it's then passed on to the customer with increased prices (considering there's so many private businesses who pay no fees, it would make it much harder to compete), or I take the hit. 

My choice would be to keep the business running all year round.

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Registering for VAT also allows you to reclaim VAT paid on purchases, including purchases of goods up to 4 years prior to the registration (and 6 months for services.)

Because you can reclaim input VAT, it means the effective increase in prices is not 20%, it's more like 3%-6% typically, dependant on your markup.

Shutting down for 2 months is stunting your growth, but ultimately it's your choice and I am not trying to slam you for it.

Sure, VAT-registered entities cannot easily compete with private sellers, especially in the UK where there are tonnes of them, but other benefits come, e.g. dealing with wholesalers/distributors that deal only with VAT-registered entities.

In any case the cons of VAT registration outweigh the pros only around the threshold figure. If you have a revenue of 150,000+ you don't really notice the effect unless you're on the likes of eBay where they put your listings up alongside private sellers who come and go week after week, fuelling the gig economy and transacting with no responsibilities, like little kids.

In the long run nobody wants to pay more taxes. But I have found that being VAT registered is more beneficial in business relationships than not being VAT registered. It opens doors. It shows you have responsibilities and are less likely to ghost on your buyers.

[therenewalworkshopltd]

Registering for VAT also allows you to reclaim VAT paid on purchases, including purchases of goods up to 4 years prior to the registration (and 6 months for services.)

Just to clarify that, as it can be misleading.

You can only claim the VAT back on the goods that you actually still have, not stuff that you purchased and sold years before.

[btr.style]

This all depends on desired business growth. My business plan was/is different to most. It's buy and buy and buy, literally take on investors, use every last penny, rack up huge debts to get to a stock goal. The goal was decided based on a figure I want from the business to purchase a better house and retire. That stock goal is now pretty much met so it's now selling off all stock and turning over the maximum amount of money possible for it. 

The business could quite easily have over 10k active listings now with the stock I have but why? To do so means expenses (higher shop tier or fees for every listing over 250). I know it means selling more stock much quicker (better listed than not) and thus making more money each year, but it means more fees to do so and more tax to pay with higher tiers. All very well if it means more business growth (more money = more stock) but it's money going to me. 

I'd rather have for example 500k over 10 years than 440k over 5. 

With VAT registration, more turnover so more profits but again more to pay out. I'm all for lesser earnings but more of it in my pocket.