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Originally Posted by arshavin  It's just occurred to me that most things I sell I make pretty low profit per item sold. If I was to become vat registered I would barely make profit and in some items I sell I would make nothing at all
This has scared me because I have only just understood how vat works. I'm thinking the best thing I can do is stop selling all together for the tax year just before I get to 77k :(. Do Amy of you guys do this?
I could add the vat onto the goods I sell but then my prices on eBay would no longer be competitive.
This is actually stopping me from sleeping! | Has always baffled me sometimes how some of the bigger sellers on eBay who are VAT registered make profit on most of the items they sell.
Someone selling a data cable at 99p via First Class delivery will need to pay out 21p to Paypal (assuming they're on the best rate), 44p to Royal Mail just for shipping (assuming it goes out franked and not stamped), 19p to VAT and you're already at 84p before you take into account eBay fees, packaging, the cost of the item itself and the labour/time that goes into shipping it out. Surely those little bits must be more than the remaining 15p.
Not being VAT registered, at least you'll start to make some money once you hit thousands of sales, but only pennies at that! Being VAT registered, I think they're more likely to be loss-leaders than anything!
Dread to think what some of these companies profit to turnover ratio is even before taking into account VAT and tax and the likes!
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