Drop shipping

[jennywren]

I don't drop shipping, but am thinking about it, I roughly understand how it works, but tax wise how does this work. If someone else is supplying it and posting it, you make a small profit and collect the money, how is the tax spilt. I know this is a huge and forever ongoing questions, but the basic will do.

[mrs maggot]

they are in business supplying you goods and you pay them for supplying the goods, so they invoice you for the work they have done on your behalf - so forget that they have sold an item for £15 what they have done is supply you with a service for £9 which is what they will bill you for if that makes sense

[WorthDoingRight]

So you will pay tax on your profit made on the item. It is no different to buying an item from any supplier and selling it at a profit (or loss). So just look at dropshippers as suppliers that ship directly for you to your customer and you pay them like any other supplier.

So you pay the dropshipper £10 for an item delivered to your client that you charged them £15 for then your profit will be £5 less tax on the £5.

Hope this helps along with Laura's earlier reply.

[mrs maggot]

do you do ebay at the moment ?? if you do just treat them exactly the same, its income from a different source to your normal outlet, wothdoingright has summed it up easier than i did lol

[jennywren]

do you do ebay at the moment ?? if you do just treat them exactly the same, its income from a different source to your normal outlet, wothdoingright has summed it up easier than i did lol

No I do not do ebay, not a big fan I'm afraid, not putting it down it just not for me. Still I still digesting at the moment, I have a lot thinking before I go that way, normally I make quick decision but I trying to get my head around it. But thanks for your input.

[Mattie]

go for it, i've been drop shipping for a few year now and i'd say it's worth it. The income is just treated the same as a normal sale (you minus your costs to get your profit and that's what your taxed on)

[jennywren]

It the engraving side that I wish to build on, but who to pick, so many companies that offer this, but picking one when you never done drop shipping is the biggest problem for me now, its a new area that I'm looking at, its like a minefield I'm not sure on what to avoid.

[Mattie]

I wouldn't bother with engraving side if i was you, last year i spend a fortune on engraving equipment and stock, people weren't really interested in the engraving side when they notice i did printing on products

i ended up selling the equipment and stock back in march