eBay UK’s announcement today includes the news that “all media categories” are to have obligatory free postage from 19th October 2009. All subcategories of Books, Comics & Magazines, DVD, Film & TV and Music will now have to offer their first domestic postage option as free of charge (full list at the end of the post). Sellers will, as normal be permitted to offer additional pay-for postage options: so for example, Second Class free but Special Delivery charged for.
eBay claim that free postage increases sales. They also claim that free postage is “the norm” on the internet. But plenty of sellers object to blanket imposition of free postage across whole categories, some saying that it makes eBay selling unviable, and others arguing that it unfairly penalises buyers who buy multiple item. Full postage costs have to be included in each individual item, and there is no facility to discount for buying several items together, disincentivising multiple purchases and costing sellers sales.
If eBay have proof that free postage increases sales (and for what it’s worth, my own experience does suggest that they are right), they should share that with sellers. A simple headline like “free postage increases sell-through-rate by xx%” would do a lot to alleviate the fury of sellers who feel that eBay are telling them how to run their businesses. It would be nice to be treated like business partners, not peons.
Free P&P is messing up categories, and causing misleading information in search results. Sellers in free P&P categories are just switching their listings to related categories that do not have compulsory free P&P. And there’s been a rash of listings across the site with T&Cs like “eBay won’t let me put a postage price in for this listing, but 2nd class will be £2 and if you want recorded that’s another 75p”. Presumably this is one of the reasons for eBay’s new Selling Practicses Policy, which bans both conflicting terms and conditions, and unprofessional language.
Better, I think, would have been to hand out more carrot than stick. From 20th August to 20th September, eBay will give Media sellers who offer free P&P 20% off their FVFs. It’s a nice incentive to change your listings over early, but it’s hardly good enough when the spendy season starts in approximately October. Free P&P should have been encouraged with fee discounts and boosts in search results, not enforced with fee discounts and Best Match to sugar the pill. Sellers should be given business reasons – from eBay, from sales data – to make the change, and then many of them would have made it by themselves without confusing their buyers along the way.
Categories requiring free P&P on eBay UK
Books, Comics & Magazines
* Accessories
* Annuals
* Antiquarian & Collectable
* Audio Books
* Children’s Books
* Collections & Lots
* Comics
* Educational/ Textbooks
* Fiction Books
* Magazines
* Modern Maps & Atlases
* Non-Fiction Books
DVD, Film & TV
* Accessories/ Storage
* Film Memorabilia
* Other Film Formats
* TV Memorabilia
* Videos: VHS
Music
* Accessories/ Storage
* Cassettes
* CDs
* Music Memorabilia
* Other Music Formats
* Records
The following already required free P&P:
DVD, Film & TV
* DVDs
Video Games
* Accessories
* Games
* Internet Game Accessories
* Merchandise/ Books
* Other Video Games
94 Responses
Can someone tell me why private sellers in CS&A are still allowed to charge crazy shipping prices?
Ebay are enforcing free shipping to media sellers and expect the seller to pay a listing fee for the privilage, why would they when they can list for free on amazon and get a shipping credit as well its total madness lol
The likes of Amazon will be loving this, as there will be a large amount of booksellers closing their ebay seller accounts down and having Amazon or similar as their main selling platform .
Once this rule is implemented i cannot see many ebay sellers returning once ebay withdraw the free shipping rule when they see their auction site count crash through the floor ;^)
I bet amazon cant wait for sept lol
As a record seller I will need to recuperate the cost of postage (at least £2.14 plus packaging) somewhere. E-bay’s answer is to add this cost to the item sale price. Ok for UK buyers – but what about my buyers from overseas? They are not going to pay an extra £3-4 for an item when there is no benefit for them.
So, higher item prices for the UK buyers, higher fees for the UK sellers as e-bay will charge fees on the postage element added to the sale price, and the overseas buyers are charged twice for postage.
The only winner here appears to be e-bay. Surely its time someone raised some real competition to this greedy retail bully.
eBay argue that people like to know upfront the total cost so that’s why they’re doing so called free P&P. Why like eBay Express use to do can they not just display total prices including P&P on searches? The reason they don’t is far more simple, they like telling buyers it’s “free” which it isn’t and of course rake in extra fees. Show me a single DVD seller who didn’t have to put up prices, you wont.
Good point, Sue Bailey – although, for a serious seller of vinyl & CDs, going through tens of thousands of items revising asking prices up and P&P prices down for overseas buyers still represents a MAJOR ball-ache for no real purpose.
eBay are, by these measures, essentially doing away with the 99p auction, and making it pointless to sell vinyl or books for less than about £4. These bargains drive an awful lot of traffic to the site. Speculative “home clearout” sellers won’t list items at higher prices incorporating P&P – they just won’t bother listing them at all. eBay will lose traffic and revenue from this. The only winners I see are Amazon and charity shops.
Sue it doesn’t work like that. Most overseas buyers make up a bundle of items to save on postage. I don’t make a profit on postage and charge out shipping to overseas buyers at cost. If an item that was previously starting at £0.99 is then starting at £4.99 the overseas buyers are going to go elsewhere.
It used to be cheaper for an overseas buyer to build up a bundle of say 10 items and then I could ship at cost, but now those 10 items would each have an extra £4 on the item price. No buyer is going to swallow an extra £40 and e-bay are still charging End of Auction Commission fees on the whole amount.
Sue – You can’t just charge the difference between UK price and airmail. There are other factors to consider such as paypal fees which also need to be taken into account as paypal take a higher percentage when I sell to an intertnational buyer.
Elvis: the point isn’t the detail of the maths. The point is “the overseas buyers are charged twice for postage” is nonsense. In many cases, overseas postage is cheaper or not much more expensive than UK postage anyway, for things that go packet rate.
Chris #7 – that’s not just overseas buyers, that’s ALL buyers who want to combine shipping. If free P&P is here to stay – and it looks like it is – we need some way to offer bulk purchase discounts or similar. (It would have been simpler to make free P&P an optional trick for sellers, but as per the post, eBay have seen fit not to do that.)
Can someone point me to the link on Ebay where they are going to cover the cost for “free shipping”?
I have not found the link so far and I suspect Royal Mail are not aware of the changes and will insist on charging me for “shipping”.
What do I do?
“It would be nice to be treated like business partners, not peons. ”
Ah, but Sue, then it wouldn’t be eBay, would it?
That attitude–which people like Griff (Jim Griffith) vehemently deny exists–is what makes so many sellers so angry. It is a subtle feeling that those at the top view sellers with varying degrees of contempt (proportional to sales volume).
…in addition to unprofessional, amateurish, stupid, unaware and…
eBay has always viewed sellers as a necessary evil rather than as partners.
There are going to two big winners
1 – Amazon
2 – Ecommerce sites offering ‘Shop Packages’
Listing fees are substantially cheaper on Amazon, although selling fees are much higher, but considering that you are only paying on successful sales, it is far more attractive for volume sellers
Listing and selling fee are Free if you own your own shop. My own shop subscription fees are half what I’m paying ebay for a featured shop
Once a seller makes a commitment to their own shop and that shop starts to turn a profit there will be no incentive to sell on, or return to ebay.
When purchasing stock I considered my sales channels by selling potential i.e. Ebay / Amazon / Own Shop
As from this point onwards my priority will be Amazon / Ebay / Own Shop
Business plan over next 12 months – Amazon / Own Shop / Ebay
They are going to loose sellers by the score.
Will somebody please tell the Emperor he has no clothes on – he is buck naked and is going to catch a cold.
I think this will help raise the prices on eBay, which for us is a good thing. For too long now, the prices have been driven as low as they can go…margins are really tight.
Hopefully serious business sellers will use this as an opportunity to raise prices and increase margins.
“Listing fees are substantially cheaper on Amazon, although selling fees are much higher, but considering that you are only paying on successful sales, it is far more attractive for volume sellers”
Fee’s on Amazon are shocking for our stock, also when you sign up with amazon you agree that you will not charge more for your product than you do on other venues.
eBay charge me 4p upfront for a bath and take on average £25 per sale in FVF, amazon charge me bugger all apart from a monthly charge (I have no idea what it is) but charge £70+ per sale.
I sell all my old used vinyl at 99p + £2.50 shipping, i can’t see listing these at £3.50 will have anywhere near the same impact, meaning the end of Ebay for me!
DJ: have you tried listing them at £3.50 or £3.99 or similar? Or are you guessing how your buyers will react?
Sue: Whichever way you look at it, 99p is a better option than £3.50. It doesn’t matter that anyone with any common sense will know that 99p + £2.50 shipping is the same as £3.50, to the casual buyer, 99p draws people in, £3.50 doesn’t. I don’t understand why you can’t see what an awful state of affairs this is.
I have to agree with #17 £0.99p + whatever is much more attractive than £3.50 if I was browsing the internet for a purchase.
I also agree with 17 & 18
19 thumbs down, one blog i wont be reading
#20 PMSL. You just did.
@19
Just had a look at the first blog.
beneath the blog:
‘Ads by google:
amazon com
Low prices on books, dvds and more! Free delivery on orders over £15.
http://www.amazon.co.uk‘
Ironic or what?
#22 Contextual ads are a great thing 😀 I’ve been particularly amused by this page of the Daily Mail’s site:
https://www.dailymail.co.uk/femail/article-1199442/Warning-women-conned-buying-fake-designer-killer-heels-worn-celebrities.html
which has been covered in ads for the same fake designer shoe sites they’re warning against.
@20
Dear Don. Without 19, you wouldn’t be reading 17 and 18.
You’re the guest that pissed on the floor at this party.
dw
your a one you are dan, your welcome to any spillage
21
lol
Quick question from a US seller–
For UK e-commerce [non-eBay], is it “standard” practice to have free shipping regardless of order size? Or is it similar to the US, where Free Shipping is the lure used to increase order size?
Ie. Amazon only ships free with PAID Prime membership OR a minimum order of $25. Most other sites are the same or higher. Generally around $50.
From one of the NYT articles Sue referenced (now 2 years old):
“Although customers typically order more frequently from the site when they do not have to pay shipping charges, Mr. Fuller said the average order size drops. Because the company holds retail prices steady during the promotion, according to Mr. Fuller, shipping costs diminish the profit margin of each sale.”
Also, the company noted in intro, LL Bean, ran that as a holiday promo. Not as a permanent offer. They charge between $5-14 depending on order amount.
My point is that statements like “buyers prefer free shipping” or “Free shipping is standard in xyz categories” seems a bit misleading or not wholly accurate. Buyers may like unconditional free shipping, but they may also place smaller orders. And at least where I’m shopping, nearly every site has a minimum order amount.
I think it is worth remembering with Amazon, that in my experience, the default shipping in the checkout is First Class (charged for) and the buyer has to click ‘Super Saver’ posting to get ‘free’ delivery which is clearly stated to be slower than first class (if I remember correctly I think it says 3 business days later than first class). While on eBay so called free p&p has to be the first option.
After getting a customer to look at your listing and shop the aim should be to increase the order size by encouraging multiple purchases. Unusual tools, related items, flat rate P&P per order or free P&P above a certain amount etc. Free P&P on all items is a disincentive to order more items, you might as well buy from different sellers, and whoever offers each item the cheapest.
@30
Spot on, Sue.
Free Shipping is fine IF:
1. You can set discounts for multiple purchases.
2. (Final Value) Fees are adjusted downwards to compensate.
Without these in place it sounds like commercial suicide for sellers and eBay. It seems almost inconceivable that one of the biggest ecommerce sites in the world doesn’t have a shopping cart.
If they got these things sorted then Free Shipping would also be a useful tool to rid the site of some of the Far East ’99p item with £15 postage’ sellers.
I couldn’t care less about the P+P issue, its the overall price of an item which matters.
Ebay created this farce by charging FVF on item not P+P…creating 99p+29.99 postage and the like…
It should have always been a FVF based on total price, at least then, there is no advantage to anyone or incentive to post silly P+P prices.
As it stands, I think Free p+p is good, its clearer for buyers which must be a good thing, although doesn’t encourage multi-buys, but when this happens now the seller claws some extra margin by bundling as one shipment.
In saying all that, I’ve had a customer buying 3 items on free postage demanding a discount after purchase, I said NO, took 3 negs as a result and not sure what DSR, anyway, after lobbying ebay, I have had removed (yes they still can do that – not revised- removed!) and had the said user suspended, good riddance…rant over lol
ebay needs better sellers but also better buyers too
@32
I don’t agree with the way the buyer acted – they should have got in touch beforehand and asked about a discount before committing to buy. But, surely they have a point about not paying multiple shipping charges when all their items can be sent in one package?
As a buyer, I will not purchase multiple ‘free shipping’ items on ebay now – I will go to amazon or independent websites (it’s too much hassle to contact a seller and negotiate a discount before buying – ecommerce is supposed to be quick and easy!).
No chance to “claw some extra margin” from me, thanks very much.
I wish everyone would stop calling it free shipping, or at least point me in the direction of the parcel carrier who is providing this free shipping you are all talking about 🙂
Savvy Paul don’t you think amazon have factored in the free “super saver” delivery & subsidized “prime” into there priceing?
We provide genuine free shipping as an option on our website, We think of it more as a service. It drives sales and our business model can support it.
It’s not just a simple case of adding the postage cost to the item price as most people seem to think.
#35 yes Amazon will have factored in “super saver” into the price but I’m sure the terms they get from Royal Mail and Home Delivery Network make this only a very small percentage of the price. But the key difference is with Amazon the default shipping in the checkout is not free and the buyer has to click ‘Super Saver’ postage to get ‘free’ delivery which it clearly states to be several working days slower than first class so you know if you want it delivered free you have to wait around a week for it. While on eBay so called free p&p has to be the first option and it is not stressed that this is the slowest.
Well I sell a product that is not in these categories and am worried that this will be next. However I will be moving all sales to Amazon for media sales when I get them because I usually sell for small ammounts plus postage at the £0.99 rate and because ebay have tinkered, sellers are dissapearing fast.
People then argue back that Amazon charges more, which is true, but items sell for more on there and I have had good sales, so it’s a no brainer.
When will ebay realise they are killing what they were once good at.
genuine free shipping
No such thing. Someone pays for it somewhere.
Is there a link on the Ebay site which details where the “free shipping” can be found?
#40 & where is the midget sized king who is the same size as my tasty snack?
#39 It is free to the customer/buyer. The business/seller pays for the shipping.
My point was that just because someone is offering free shipping, to assume that the shipping price has simply been incorporated into the product price is not correct in all cases.
Thank you very much for the explanation, Sue. That sounds pretty similar to what happens here.
Site to store free shipping is quite common and growing pretty quickly. Oddly, not with clothing retailers as in France, but with the heavier, bulkier items. Big home improvement/hardware stores nearly all offer the service.
Walmart is probably the biggest company that uses the free-to-store option.
eBay really doesn’t understand multiple item purchase businesses and unfortunately–media is a category that is VERY dependent on multiple item purchases. At least for the seller. When my store was open on eBay (closed in Nov after 6 years) my average order size was 6 items. Average international order was 4 items.
(Before surface mail was eliminated by the postal service, international orders were 20-40 items per order)
Romance readers buy A LOT of books. It’s a billion dollar industry. While the rest of the book publishing industry is suffering along with everyone else in the recession, romance is booming. Most of my customers–US, UK, AU–NEVER buy just one book. They want to save on shipping. And they have it figured pretty accurately how to buy the right amount to spend the least per book on shipping.
We don’t have mandated free postage in the US (yet) but I just can’t see how this will successfully work for most BOOK sellers OR buyers on eBay UK. There’s no incentive to buy multiple items from a single seller–because media is so low-margin that the sellers will HAVE to add most of the postage to the item price and combined shipping will be too much of a hassle. It will definitely drive away those buyers who like to place larger orders. That was a selling point for eBay that Amazon didn’t have.
Fantastic news all round in my opinion, as it’s essentially eBay slamming yet another nail into its own coffin. The sooner this ridiculous company is gone the better for all.
I really can’t understand all these eBay lovers, they are treating sellers like scum yet the sellers still stick up for their ridiculous site and rules.
#44 I don’t stick up for any of it Steve, I put up with it because the rewards are still good.
You will never ever see me waving the eBay flag, those years are in the past but I will take it for what I can get in the meantime.
#43 well said:
“There’s no incentive to buy multiple items from a single seller–because media is so low-margin that the sellers will HAVE to add most of the postage to the item price and combined shipping will be too much of a hassle. It will definitely drive away those buyers who like to place larger orders. That was a selling point for eBay that Amazon didn’t have.”
#44 but what is the point in running eBay down? It’s just the mirror of the flag waving (isn’t it)?
Ebay is just a tool for you to use.
and there is an old saying that a bad workman blames his tools.
#45 best way to treat it Whirly. Milk it while it still lives.
#47 It deserves running down, it’s an awful company and treats its customers like dirt.
#48 Yeah but not all tools are any good. And just because a saying is old doesn’t mean it’s always relevant and/or true.
#49 You are still quite bitter about what’s happened and if blaming eBay for it makes you feel better then that’s ok.
However, we are thriving on eBay and so are many other businesses. You happened to be selling in an area that eBay want to protect for it’s larger brands. But I wouldn’t go as far as saying you were a victim of eBays faults.
how is the third part of you trilogy coming?
you know, “Part 3 My own part in my downfall”
or are we just going to have to read your cheery posts until you get over it?
Something else just occurred to me…. When listing items with free p&p, whenever I use Markdown Manager (which is pretty much all the time to shift old stock) I’ll now ‘effectively’ have to give a discount on p&p too.
For example…
Without Free p&p:
Item is £1.00, postage is £1.00 (total £2.00)
Sale Price using 10% Markdown Manager £1.90
With Free p&p:
Item is £2.00, postage is free (total £2.00)
Sale Price using 10% Markdown Manager £1.80 – lose out by 10p
Neat trick – eBay have managed to make 10% of zero actually be something other than zero! Wish I could do that more often….
#50 I’ve despised eBay and its treatment of sellers for some time, long before there was any indication Retrowarez was going to fail. I don’t blame eBay for the fall of my company, although it plays a part, the real problems lie elsewhere. I accept eBay works for some BUT I still think it treats sellers like dirt.
#51 I don’t know how you are (and I don’t particularly care) but I shan’t be commenting any further on the demise of retrowarez. I was asked if I would be prepared to write the 2 articles I did and I happily did so, if at some point I wish to write the article you suggest I’ll let you know. In the meantime I think you’re mistaking me for someone who gives a damn.
Sue #23
…………….re link, the only thing I have to say is ‘thank god I’m not a Woman, they look so uncomfortable……………..
General on P&P:
I”ve said this several times……………’The word ‘FREE’ is dangerous……….
It will only take ‘1’ stubborn & determined buyer to start a legal action against a seller who says ‘FREE’, but really means ‘included’ and they win in Law, all these ads/listings will become illegal.
This is a very slippery slope for many sellers & ebay should be aware of this point and the long term damage it will cause.
I also resent ebay taking a slice of P&P, when virtually all sellers battle daily with trying to keep the packing part cost to a minimum, indeed in some cases heavily subsidising it to keep sales coming in.
As has been said many time here on Tamebay, most sellers battle daily with ‘low’ DSRs on P&P charges anyway.
So now read this, P&P; post 50p + pack charge 30p + ebay commision 08p = 88p. not 80p as before (only approx figures).
Wake up Ebay, your sellers are getting very tied.
Thankfully only 1 catagory we list in insists on FREE P&P (at this moment, anyway).
#53 Steve,
You know steve we’ve all been down bad Roads & one thing that I dislike intently, Is other people sitting on their god almighty high thrones, making crap comments about things, they actually know stuff all about.
They should also remember, it can (and does) happen to other people all the time & the old saying ‘people in glass houses……etc,etc, omes to mind!!!.
Hope things get good for you, in the not to distant future…………
As a media seller ‘Free P&P’ is going to hurt me, and I suspect many other media sellers as well. To those sellers who are doing well or believe that free P&P won’t affect them I say well done- good luck to you.
It’s great to hear that some sellers are thriving. This is good for ebay and good for the economy.
I bought from ebay long before I sold, and still do. I want ebay to be varied, with lots of categories. I want to be able to buy a CD or item of furniture whenever I choose to do so.
This is my point – my first purchase was a CD for a couple of pound, my last purchase was a desk for several hundred pounds.
If ebay are going to close down or dramatically reduce any category i.e. the media categories, then potential buyers of CD’s may never go on and purchase other items. Its in everybody’s interest that ebay is seen as a viable market place where buyers can purchase just about anything.
There is no doubt in my mind that Free P&P for DVD’s has had a significant detrimental effect on my business. Free P&P on CD’s is going to devastate multiple purchase orders.
To those who say ‘Move with the times / adapt / and other similar comments’ – I am moving with the times – I’m moving away from ebay – I’m promoting my own shop in preference to ebay.
Ebays policies are quite simply bad business for me, which is why I’m moving further away from ebay every day – surely that has to be bad business for ebay
It will only take ‘1? stubborn & determined buyer to start a legal action against a seller who says ‘FREE’, but really means ‘included’ and they win in Law, all these ads/listings will become illegal.
…LOL, I think you need to take some of your own advice within #55. The above is the biggest load of rubbish I have ever read! You clearly know nothing of UK law and possibly little more about running a business beyond “eBay selling”
Why do you assume that just because someone doesn’t charge separate postage that it is just added onto the item price. Postage is an expense, covered from profits within your business. It goes way deeper than 50p post 30p pack etc
“I think you’re mistaking me for someone who gives a damn.”
I think I will just take that as Part 3
says it all really.
#53 “other people sitting on their god almighty high thrones, making crap comments about things, they actually know stuff all about.” Yeah of course, 106000 feedback and I know nothing about eBay.
#58 I still don’t give a damn what you think. Your concerns and/or interests are not a long way down the list, they’re not even on the list.
me and the rest of your customers i suppose.
#57
LOL, I think you need to take some of your own advice within #55. The above is the biggest load of rubbish I have ever read! You clearly know nothing of UK law and possibly little more about running a business beyond “eBay selling”
Why do you assume that just because someone doesn’t charge separate postage that it is just added onto the item price. Postage is an expense, covered from profits within your business. It goes way deeper than 50p post 30p pack etc
————————
REPLY
As, you know nothing about our business experience, then your commets are irrelevant.
You may well include/absorb P&P into your business costs, however the general comments in this forum are simply about adding P&P to a listing and calling it free.
It is that I am making comments on, not you or your bussiness activities, or how you run your outfit.
As for our comments in #54, as we said, if a buyer decides to challenge ‘free’ they would probally win.
#Adverb of ‘free’
1. in a free manner. 2. without charge or cost
Our comments in #54 have nothing to do with comments made in #55, you seem to be mixing them together to make the point.
The figures quoted (as stated) were just an odd example.
They are free, the buyer is paying for the item, they are paying nothing for the delivery of that item.
For example I could charge £100 for a used tooth pick (if I wanted too) and quite legally say we deliver it for free. To assume the delivery is “included” is just that an “assumption” NOT a “fact”
#62
We are not talking about a tooth pick for £100 with free/including delivery.
We are talking about ebay listings that say free when they mean included.
There are many listings that still show the actual price + P&P on non compulory free P&P ebay sites, in the drop down country P&P prices box, but actually show free on Uk compulsory free site.
Hene it means including not free.
Can anyone join in the bun fight. 🙂
As someone who buys and sells magazines on ebay I find the free p&p appalling.
For buyers, this is an end to reduced combined p&p charges
For sellers, it’s an end to to being able to realistically list items below £1.00 an not be charged for items that don’t sell. It also means higher Final Value Fees.
I will have to either list my magazines in a catagory where I can charge for p&p or list them as collect only and advise buyers they can be posted but at a cost in the description
Ebay are the only winners from this stupid change
#65 “Ebay are the only winners from this stupid change”
In the long run eBay will realise they are not winners and have actually lost FVF and customers destroying what made eBay the original success it was: – as total order size declines, less multiple purchases, more sellers leave eBay, less obscure and intersting items listed, far fewer used items, less choice, casual sellers give up as without a PPI / courier account included P&P makes their items too expensive, auction listings decline dramatically, the original point of eBay destroyed, less customers visit the site, therefore even their ‘favoured’ large retailers give up listing – what will be unique about eBay compared to other more professional ecommerce sites?
A spiral of decline!
#64
Yes of course, but bring your own Buns & no metal bits baked in……!!!!
destroying what made eBay the original success it was:-
that would be auctions.
and ebays users only have themselves for destroying those.
Now please don’t get me wrong on this and I’m not looking for a fight, but I feel I must make comments about various comments by some contributors.
It’s not my place to police Tamebay. I agree with a lot of what Chris and Sue say, but not all of it. I regularly read Tamebay because it’s interesting to read different view points and that is one of its strengths.
But I do get somewhat miffed when people are stating that you have to move with the times, adapt and other such twaddle when they really don’t know what they are talking about.
To appreciate the negative effect that Free P&P is going to have on media sellers, you really need to be one, and not somebody on the outside looking in.
Business sellers are going to be hurt by ebays new policies and all those armchair experts who spout on about established sellers begin dinosaurs who will become extinct in the New age of ebay should really keep their ill-informed opinions to themselves.
If your not a serious seller then please don’t give advise to those that are.
#69 Glenn, FWIW, I am a business seller in the media category, and free p&p is directly going to affect me and my business. In fact, I’ve got very nearly 3,000 listings to modify before October, and just today I’ve started new listings with free p&p to test the waters.
I admit that I don’t want to move with the times or adapt in this case because it’s going to cause me a lot of work, and I’m going to have to spend time updating my business model too. It would be far easier just to coast along as we are.
However, we do have to get on with it and adapt, because my own website will never get as much traffic as eBay generates. And that’s the bottom line as far as I’m concerned. It’s just another channel to be used – if it disappears up its own backside, or in a ball of flame, another channel WILL appear in its place. Having said that, I personally do have a little faith in eBay to remain a professional and competitive business, and as much as I’m afraid that these latest changes could hurt my business, I just have to get on with it and place a little trust in their judgement. Last year’s changes saved me hundreds of pounds every month.
This year’s changes could cost me in many ways – time and money. However, it’s also forced me down a path I’ve never tried (free p&p) and who knows? It may even improve my sales and profits. A couple of folk on this board have said as much in their own experience.
If our sales and profits plummet, then I will be gutted. And eBay would have lost another seller. But I’m damn well going to give it my best shot first!
That’s why I feel that my business has to adapt and get on with it.
So there 😉
Is there any real reason, why ebay can not allow a lower price for additional items on free P&P.
Obviously his would have to be done manually by the seller, aross different listings (or some auto set up), but why could this not be done????.
I’ve read the posts here with great interest. There is one issue that hasn’t been raised. I ran a very successful and well know specialist music retail website until 2007 when I pulled the plug on it after 11 years online (I was on the web very early). The reason I did that is because 96% of new DVD and CD mail order is now based in the Channel Islands avoiding VAT. If you don’t know the scam it involves sending stuff to the Channel Islands (who are outside the EU) to gain relief on VAT on reimportation . No VAT is charged on a postal import of £18 or less if it comes in from outside the EU so essentially the item is VAT free. The first company to do this was Play.com who introduced the concept of free postage on anything. Traditionally free postage has been used as a bulk order incentive. However the reason Play.com offered free postage was because if it wasn’t included in the value of the package then they could get the maximum VAT free relief. Obviously free postage on everything is also a huge selling point. The downside is that everything has to be sent individually which is why if you order 10 items from these Channel Islands retailers you get 10 jiffy bags (I won’t even discuss the negative impact on the environment of all the increased transport costs to and from the Islands and the wastage of extra packaging) Anyhow, as we all know Play.com is a now a huge operation and it resulted in all of the major mail order retailers of CD’s and DVDs having to locate to The Channel Islands and offer the same deal. The result of this was that most UK independent retailers big and small on line and on the high street have gone bust. You just cannot compete with free delivery and no VAT. It’s impossible. Which brings me to the issue of free delivery on ebay. It seems clear to me that the suits at ebay took a look at the UK CD and DVD market and decided that everyone offers free postage. Since 96% of DVD and CD mailorder is offshore offering free postage then they would be right. But the reason for that is because of the VAT scam. These retailers also enjoy no VAT (either on purchase or sale). Anyone who sells new CD and DVD product on ebay will know that it’s almost impossible to compete with these offshore retailers. Now that you have been forced to accept free P & P you are dead , unless of course you are one of the ebay retailers that knew about this scam and have also set up in The Channel Islands. As for the ongoing scam itself, anyone participating will tell you it’s all perfectly legal. Well unfortunately it isn’t. The EU directive that covers the VAT relief being abused clearly states that member states of the EU must not allow the relief if it’s being abused for tax avoidance or results in a distortion in the home market. The only reason it continues is because the UK Government hasn’t stopped it. You can blame Gordon brown and the f&c!wits that run our country for that. We are losing millions of pounds in VAT each year to help support what is essentially another country. There is clearly a distortion in the market for CD’s and DVDs. Prices are unrealistically low hence the reason I got out. There is however one ray of light. There is a challenge to the UK Government going on at the EU and it could well be that the EU force the UK to stop this stupid tax avoidance scam. Let’s hope that happens so we can consign the whole idea of free postage on everything to the dustbin of history.
I dont see how it is a scam.
you to can move to the channel island and do the same thing
its not illegal and no one is being ripped off
also if you are interested i could sell you a couple of paragraphs :p
#72 you keep calling it a scam, its not a scam, you are free to start a business in the channel islands, just like all of play.com’s competitors have.
Free postage is here to stay on dvds, places like dvd.co.uk shipping out of Switzerland and amazon’s prime service have made a joke out of people like retrowarez on ebay expecting people to pay 2 quid for a 78p first class postage (price then i know its more now, eg. 90p).
Wasn’t Richard Branson caught for something similar a few years back. The practice itself is not illegal or a scam HOWEVER the intent/reason could be deemed as such.
Number 75 . Bang on. Perhaps 73 who seems to be the legal expert on this page would like to give us his brief ? Yes it is a scam, yes the abuse of a directive is illegal under EU (UK) law and yes the UK is being ripped off as we lose sales that would have generated tax in the UK, to a non EU domain (and that’s ignoring the other negative factors of a market distortion such as UK mainland business going under, lack of consumer choice as shops and retailers disappear etc.). In simple terms European law is based on intent unlike UK law which is based on the letter of the law. The intent of this directive was not to allow people to abuse EU VAT law by sending goods to the Channel Islands and shipping them back again for no reason other than to avoid VAT (even the Channel Island Government admit the only reason this trade exists is because of the VAT relief. Why would anyone set up on the other side of the channel to supply UK customers for any reason other than that ?) There is also already clear case law in this area. The Directive relating to Low Value Consigment Relief was intended for small value goods from outside the EU to come in VAT free. That means goods that originate outside the EU. The abuse here is that UK goods are sent out from the UK (UK DVD’s. CD’s etc) and then reimported again in order to gain the VAT advantage. Furthermore if you read the directive it specifically mentions mail order and VAT abuse. It clearly says that member states must disallow the relief if it causes a distortion in the market or if it used for abusive purposes and tax avoidance. Member states have an obligation under the 6th VAT directive to ensure that there is no unfair competition or tax avoidance as a result of the abuse of an EU directive relating to VAT. The Government could stop this tomorrow but because they are the bunch of idiots we have now, they haven’t yet realised whats going on. However if the EU orders them to act, they are going to have to act. And I hope they do because for every sale lost from a UK retailer the UK loses tax. Avoiding VAT is good for the consumer in the short run but in the long run we all lose out in tax income and competition is distorted to a degree that we lose consumer choice (less companies operating with large companies dominating). I’m no fan of VAT but if we have to pay it lets make sure we don’t have to compete with people that don’t.
Just remember this is all governed by EU law. The UK is a member of the EU and has to do what the rules say. Non EU members have absolutely no control over this. So if you are in the Channel Islands taking advantage of this EU directive by importing and re exporting UK goods legally in EU legal terms (the law that covers this) you are on very shaky ground, because at any moment the UK could be forced to stop it.
Number 73 Thanks for the offer of advice. I don’t need it. I have a QC.
Further reading. Sleep well.
https://www.taxresearch.org.uk/Blog/category/vat/
From the Observer :
[A] senior tax partner at one “big four” accountancy firm, who asked not to be named, said this argument [that it would cost more to collect VAT on these imports than it was worth] was increasingly untenable. “It [the EU directive] is being used in a way that was not envisaged and the Treasury really needs to take another look,” he said.
You’d better start looking at UK warehousing….
74. Thanks for the invite to the Channel Islands in order to compete with Play.com. What kind of competition is that! You are free to move to Afghanistan.
Also number 74 would that ‘freedom to start up a company in The Channel Islands’ involve pretending to be a Jersey national by getting one of your wonderful financial service companies to provide me with a fake company complete with nominated Jersey National directors ? Would it also involve selling the transactions to a third party fulfilment company to perpetuate the illusion ? So that’s not a scam is it ?
Channel Islands selling may not be illegal technically, BUT realistically it is on somewhat shaky ground.
“you are free to start a business in the channel islands, just like all of play.com’s competitors have.”
Try it, it’s a lot harder to set up than you think. Guernsey is easier than Jersey.
To be fair to Play.com they didn’t set up in the Channel Islands to avoid the VAT, they were already there in the first place, as were BlahDVD (now owned by DVD.co.uk) and SplashDVD. There are even eBay sellers who are Channel Islands based who don’t have to pay VAT, but like Play.com they were there in the first place …. (hello Rose !)
The debate is pointless anyway because Amazon is UK mainland based and as far DVD is concerned (and probably other products as well) Amazon is winning this war will beat Play and all the rest of them in the end. Don’t believe me ? Ok I might not be 100% right on this but let’s check back in 3 or 4 years shall we ?
#73 I bet you could disagree with your own shadow. Life must be a riot being married to you ….
Steve – ethicalcompanies.co.uk
PS like the article on your site Richard (Freak Emporium Richard not MagnumOpus Richard) about the VAT “scam” (as it is being called here). I expect the demise didn’t help your industry any either.
There is another one of the independent online CD sellers just up the road from me, he’s not having an easy time of it either I believe 🙁 But I hope he can carry on (Loud1.net)
Steve – ethicalcompanies.co.uk
Life must be a riot being married to you ….
well thats the first time i have seen you say anything I would agree with.
keep that up and we might be friends.
Hi Steve
Re your post :
To be fair to Play.com they didn’t set up in the Channel Islands to avoid the VAT, they were already there in the first place, as were BlahDVD (now owned by DVD.co.uk) and SplashDVD. There are even eBay sellers who are Channel Islands based who don’t have to pay VAT, but like Play.com they were there in the first place ….
I’d like to believe you. This VAT directive was being abused long before Play.com etc got hold of it. The Flower industry was importing Flowers from Holland using the same scam. I’d like to see any of these retailers argue in front of a judge that they are based in the Channel Islands for any reason other than to avoid VAT. Their main market is the UK Mainland which is miles away, the goods have to be sent to the Islands to then be sent back again and labour costs and warehousing isn’t cheaper than locations on the UK mainland. There is no commercial reason you would invest all of your infrastructure miles away from your main market other than to take advantage of a tax loophole.
Let me just give you an excerpt from a Jersey Government Report :
Jersey’s Economic Affairs Scrutiny Panel “The impact of the fulfilment industry on the local economy” dated 30th October 2006
“3.2 Low Value Consignment Relief (LVCR)
It has been claimed that logistical excellence and reasonable pricing are the reasons that so many e-commerce companies are located in Jersey. However, local fulfilment companies incur high rental and labour costs, and in the case of UK businesses distributing from Jersey, could operate from any part of the UK mainland. It is therefore a reasonable assumption that one of the factors which make Jersey attractive to these companies is the LVCR situation.”
Likewise the Oxera report commissioned by the Jersey Government in 2005 titled “What is the Contribution of The Fulfilment Industry to Jersey’s economy?” concludes that the fulfilment industry is located in Jersey because of the competitive advantages afforded to it by the exploitation of LVCR:
“1.1.2 Why Does The Industry Locate In Jersey ?
The principal reason for the industry to locate in Jersey is that the goods of relatively low value, such as CDs and DVDs, are exempt from having VAT levied on the purchaser when shipped from Jersey to the UK or other destinations in the EU. This contrasts with the same goods dispatched from within the EU where the VAT applicable would be that of the country from which the goods were dispatched.…… The result of LVCR is that goods despatched from Jersey (or equivalent jurisdictions) can be sold to EU residents at prices excluding VAT. This gives companies a potential price advantage compared with a similar retail operation set up within the EU.”
If the Jersey Government admits it …….
Also heres the text of part of the EU directive which makes it clear what memebers states should be doing :
Directive 1983/181/EEC, Article 1
1. The scope of the exemptions from value added tax referred to in Article 14 (1) (d) of Directive 77/388/EEC and the rules for their implementation referred to in Article 14 (2) of that Directive shall be defined by this Directive. In accordance with the aforesaid Article, the Member States shall apply the exemptions laid down in this Directive under the conditions fixed by them in order to ensure that such exemptions are correctly and simply applied and to prevent any evasion, avoidance or abuses.
Note the last line. UK Government has a legal obligation to stop this import relief being used for evasion, avoidance or abuses.
I rest my case. Lets not forget The Channel Islands chose to be outside of the EU. You can’t have it both ways.
“The debate is pointless anyway because Amazon is UK mainland based”
That may apply to non music and film products (at the moment) but Amazon use Indigo Starfish to handle their CD’s and DVDs via the Channel Islands. Amazon had to move offshore with this to compete.
They are all at it.
Agree 100% with what Richard has been saying.
Shame that there are so many on here that want to argue, based solely on the person who holds an opinion, rather than the opinion itself.
When I stated “to be fair from Play.com” I was just referring to the fact that they were at least a Jersey based company. They didn’t specifically move there. If that makes sense.
Steve
Hi Strve
Yes I know what you mean. They use that excuse though. It obvious what the real game is, except to our glorious HMRC. “TW%ts” to quote David Cameron. If you ran a business and had a customer in Birmingham would you send your stuff on a round trip to an Island on the other side of the Channel and back (at your expense) if you couldn’t save any VAT. No brainer I say.
Come on…we’re all waiting for you offshore guys to say something…
#83
Steve, Amazon may be UK mainland based but they have an arrangement with Indigo Starfish, a Jersey company owned by Glasgow-registered parent Indigo Lighthouse to fulfill CD and DVD orders.
As you say the only genuinely Channel Islands-owned company using the VAT loophole is Play.com, founded by Jersey islanders Richard Goulding and Simon Perree.
“Scottish Enterprise, a government quango, became a shareholder in Indigo Lighthouse after investing in 2004. Asked about the investment it said: ‘We are pleased with Indigo Lighthouse’s contribution to the Scottish economy.'”
So now you know why the UK government (run by Scots) isn’t closing this loophole just yet.
What happened to “Amazon Jersey” ?
Steve – ethicalcompanies.co.uk
Play.com ship all their over £18 packages from UK mainland and have offices and staff in Cambridge…. Why would you do that if it was so great in Jersey ?