Since January 1, the UK has fully withdrawn from the EU, and Amazon's UK business has also changed as a result, involving logistics, taxation, branding, product labeling and other aspects.

Amazon has previously notified sellers on many occasions in the background to keep them abreast of the various changes that have occurred after the UK’s withdrawal from the EU. Among them, the most troublesome issue for sellers is the tax issue.

New Year's Day has passed, and many sellers returned from the holiday, only to find that Amazon has begun to collect UK VAT at the standard rate of 20%. The collected VAT directly accounts for 16.7% of sales. For a time, sellers cried out: "Bang! The profit is gone!"

Amazon starts paying 20% ​​UK VAT on behalf of customers

Since yesterday, a large number of sellers have reported in the seller communication group that the UK site is not functioning properly and the order volume has dropped significantly.

  ▲ The picture comes from the seller communication group

Some sellers posted screenshots of their tax collection and said: The taxes paid by Amazon on behalf of their sellers account for about 16.7% of sales, and the amount will have to increase by at least 10 pounds to be the same as before.

  ▲ The picture comes from the seller communication group

In fact, Amazon issued a notice on changes to the "UK e-commerce VAT regulations" as early as October last year.

According to Amazon Global Selling , from January 1, 2021, Amazon will be responsible for collecting and paying UK VAT on the following sales of goods ordered through any Amazon store and delivered to UK buyers: for example, goods shipped from inventory stored outside the UK and the value of the shipment does not exceed £135. For sellers who trade online, the VAT collected and paid by the e-commerce website will not be included in the low tax rate, and the standard tax rate (20% in the UK) will be used .

Now Amazon has started to pay the VAT on UK products as scheduled, but this change has made many sellers uneasy.

In the forum, many British sellers also raised questions after discovering this change:

"I can't even make 5 yuan per order. Do big companies really not evaluate their profits?"

"Why do I see that most sellers haven't adjusted their prices? Can you make money by eating up 20% of your profits all at once?"

  ▲ The picture comes from Zhiwubuyan

It can be seen that whether the price of goods will increase is the main factor that sellers are concerned about, and price changes are bound to have a certain impact on the seller's order volume.

Amazon will pay the UK VAT, which will reduce the profit margin of sellers. At this time, sellers generally raise prices to reduce costs. However, looking at the current situation, not only many sellers have not raised prices, but some sellers have even reduced prices. What is the attitude of sellers towards this change?

Some sellers have raised their prices, while others are waiting and watching.

To increase prices or not to increase prices, that is a difficult question.

Although the principle is the same, each seller’s situation is different and the strategies they adopt may also have their own advantages and disadvantages.

According to the editor's observation, some sellers have increased prices in response to this policy, and the order volume has also been affected; but some sellers are still waiting and have not adjusted their selling prices; and some sellers have done the opposite, reducing prices instead of increasing them, leaving their competitors puzzled, and the following "humble" scene appeared.

"I hope that after the wheat price goes up, the big sellers will try to increase the price... I beg you."

  ▲ The picture comes from Zhiwubuyan

How do sellers react to the fact that most of their peers do not raise prices? In the comments section of Weibo, many sellers also discussed this matter.

  ▲ The picture comes from Weibo

"I've already raised the price by $1, how about giving it to charity?"

"It will probably take a couple of days for our peers to wake up and raise prices together, otherwise it will be really bad."

"After raising prices by 20% on New Year's Day, I placed two orders. I found that my competitors did not adjust their prices, so I adjusted them back."

It can be seen that most sellers still support the price increase, but since many of their peers have not yet implemented the price increase, some sellers are still hesitant. So, what impact will this change have on sellers?

The increase in taxes means a decrease in sellers’ profits. One seller said that before the 1st, he could make 70 yuan from a product in the UK, but now he only makes 40 yuan, which is half of what he made.

  ▲ The picture comes from Zhiwubuyan

At the same time, some sellers raised their selling prices due to pressure from reduced profits, and found that the number of orders dropped a lot as a result .

There is no harm without comparison. Some sellers also said that the sales volume on the UK site was not affected by the price increase and has returned to its original level.

  ▲ The picture comes from Zhiwubuyan

  ▲ The picture comes from the seller communication group

I wonder how sellers on the UK site are dealing with this VAT change? How are the sellers’ orders after the price increase? Feel free to leave a comment in the comments section~