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Would you include VAT (taxes) to the price or add it to cart?

by Anton543
5 replies
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My dropshipper charges VAT at the UK rate of 20% which he adds to the cart on the product price. WOuld you include VAT to the product price or to the cart?

Two ways to look at this.

Adding to the VAT to the product will make your headline price look comparatively more expensive against competition, but excluding it from headline price and then including it in the cart could disappoint customers who may have thought the headline price was the final price.

I have to add the VAT price because my dropshipper charges me it, and if I don't then obviously my profits will be negligible.

What would you do?
#add #cart #include #price #taxes #vat
  • Profile picture of the author Auctiondebteliminator
    I wouldn't.

    Ever.

    I would ONLY sell items for the MARKET worth of the item. Any MORE than that, then I'm not maximizing my volume.

    Then, I'd take my deductions from there.

    If my deductions (including VAT) come at a LOSS for a BREAK EVEN to my bottom line? Then I'd ditch the supplier.

    They just aren't giving me competitive prices.

    I don't want high abandoned carts. What my customer SEES is what they pay. No surprises.

    The market sets the prices for my products, not the supplier. Anything 'added to' is just going to screw up my profits.

    Always remember this:

    "No cost is added TO the market worth - Market worth COVERS costs"

    ADE
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    Famous for my '$1000 dollar challenge,' I've been teaching people how to DOMINATE on eBay for YEARS. Sell 100% of your items FOR A PROFIT. Rank higher, sell faster, sell more, and DESTROY your competition with a data-based approach. Quit listening to Guru's-in-training! Click now below!
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  • Profile picture of the author Richard Tunnah
    You need to get professional advice from a registered accountant in relation to vat as it depends on your turnover whether you are required to charge vat. If you charge vat you need to comply with rules that require you to track your vat sales (and purchases) and fill out a vat return every couple of months.
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  • Profile picture of the author Anton543
    Yes, but to be honest, most shops in the UK add 20% to their prices. I think I add will around 15% to the headline price and nothing obviously in the cart.

    In the meantime, I will try and negotiate lower prices with my dropshipper so I can charge lower prices.
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  • Profile picture of the author Auctiondebteliminator
    Even if you add them (no matter where they're added) You need to make sure that the TOTAL price conforms to the MARKET worth of the item.

    If not - you need to negotiate or abandon the supplier.

    If so, list the crap out of it.

    But you DO need to know the EXACT amount you're making per sale as well - otherwise you're guessing profits... And it makes your accounting a mess.

    No sense in guessing your profits and down the line realizing you're losing out.
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  • Profile picture of the author Anton543
    Its one of those industries where prices differ quite a bit for 'similar' items because there are professional quality and then there are cheap imitations. If the customer wants quality goods he will have to fork out the extra cost, I suppose.

    For example, my dropship supplier has a lot of business customers because they are willing to pay for quality whereas quite a lot of individual customers do not discriminate on quality as much and are willing to buy the low quality imitations that are often priced 1/3 to 1/5 of the price.

    For example, if a customer has the money he will probably buy a 50 inch Sony flat screen whereas someone on a budget may go with 50 inch flat Alba, except the differences in quality in this particular industry is even greater.

    I will definitely be making sure I make a profit on each product after Paypal fees, delivery fees, traffic acquisition costs.

    My other store has got off to a very good start, though.
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