Skip to main content

Amazon's UK sellers are facing a 2% fee hike after the company decided to pass along the entire cost of a new national digital tax (AMZN)

* Amazon will be raising the fees for sellers on its UK marketplace by 2%, starting in September. * The change follows the passing of a new digital services tax in the UK, which levies a 2% tax on revenues of companies that run search engines, social media services, or online marketplaces in the country. * The moves shows Amazon is passing along the costs of the new tax on to its small business sellers, and raises questions on the effectiveness of such measures. * Visit Business Insider's homepage for more stories. Amazon announced on Tuesday that it plans to charge more fees to the sellers on its UK marketplace, in response to the country's new Digital Services Tax. In a note to sellers, Amazon wrote that it will add a 2% fee to all merchants using its marketplace or storage and fulfillment services in the UK region. The new fee will go into effect on Sept. 1.  Amazon said the fee increase is driven by the passing of the DST law, which levies a 2% tax on the revenues of companies that run search engines, social media services, or online marketplaces, and generate over £500 million in sales. Until now, Amazon absorbed this cost, it added. Here's what the note said: "In spring of 2020, the UK government introduced a Digital Services Tax ("DST"). While the legislation was being passed, and as we continued our discussions with the government to encourage them to take an approach that would not impact our selling partners, we absorbed this cost.  Now that the legislation has passed, we want to inform you that we will be adjusting referral fees, Fulfillment by Amazon (FBA) fees, monthly FBA storage fees, and Multichannel Fulfillment (MCF) fees in the UK to reflect this additional cost. We will not apply the increased charges retroactively, but starting 1 September 2020, the above fee types will increase by 2%." While Amazon is passing along the costs of the new tax to the thousands of small business owners selling on its UK marketplace, it raises questions about how effective such measures are. Amazon made a similar move in France last year when it raised seller fees by 3% in response to the country's new digital tax. The UK law is aimed at ensuring big companies pay more taxes, as most of their European headquarters are located in tax havens like Luxembourg, and leveling the playing field between them and the small- and medium-sized businesses in the region. The UK is Amazon's third-largest market in the world, after the US and Germany. Amazon generated over $17.5 billion in sales from the UK last year.  In a statement to Business Insider, Amazon's spokesperson said the company advocates for a global agreement on taxation, instead of a government-level law that varies by the country. "Like many others, we have encouraged the Government to pursue a global agreement on the taxation of the digital economy at OECD level rather than unilateral taxes, so that rules would be consistent across countries and clearer and fairer for businesses. As we've previously indicated, the way that the Government has designed the Digital Services Tax will directly impact the businesses that use our services," it said. No other choice Still, sellers in the UK are likely to continue using Amazon's services — even if it becomes more expensive — because of its sheer size, according to Tom Baker, founder of FordeBaker, an agency that helps Amazon sellers.  He said Amazon may become a slightly less attractive option for online sellers, as their profit margins will shrink, but they can't afford to abandon the marketplace given it's the largest e-commerce site in the country. They can't raise their prices on Amazon either, he said, because doing so could drop a seller's search ranking on the site — or risk having certain products suspended due to Amazon's policy of keeping low prices. "The size of the pie is just too big," Baker said. While it's no surprise that Amazon is passing on the cost of the new tax to its sellers, Baker said it's a "missed opportunity" for the company to show support for the small businesses that account for a large chunk of its sales. Roughly 60% of all products sold on Amazon now come from third-party sellers, and the company has been promoting itself as a staunch supporter of small businesses lately as regulatory scrutiny has grown over its market power.  "It could have been an opportunity for Amazon to make a stand for SMBs and show their support for the backbone of the UK economy," Baker said. Join the conversation about this story » NOW WATCH: What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence
https://bit.ly/2Xz1EgA

Popular posts from this blog

How to enable the text-to-speech feature on your Kindle Fire device to hear text read aloud

* You can enable the text-to-speech feature on your Kindle Fire device to have written content read aloud. * Both Kindle content and your personal documents can utilize the text-to-speech feature. * Text-to-speech inputs are also available for languages other than English and can be downloaded via the progress bar within the book itself. * Visit Business Insider's Tech Reference library for more stories. If you are vision-impaired or simply want to hear your book or document aloud rather than reading the text, Kindle Fire has a text-to-speech feature that will translate the written words to audio so you can listen aloud. Best of all, text-to-speech is not only available for Kindle books but also for many (though not all) personal text files. Turning on text-to-speech is easy and should only take a few seconds. Books in the Kindle store will even notify you if the capability is available before you purchase, though the feature must be turned on within the book or document itse...
Read more

The NSA warned staff that smartphone apps can track them. Here are their recommendations to avoid tracking.

* The NSA warned members of the US military and intelligence community this week that their smartphone apps could be tracking them and put their security at risk. * In guidance issued Tuesday, the agency noted that many apps make use of WiFi, GPS, and Bluetooth to collect cellphone location information, which is typically sold to advertisers or third parties. * The agency recommended specific steps for staff to reduce their data exposure, like restricting app permissions and reducing web browsing on their smartphones. * Visit Business Insider's homepage for more stories. The National Security Administration warned staff that the amount of data their smartphones track could pose a national security risk in new guidance issued Tuesday. The guidance highlights a practice that's common across Silicon Valley products but rarely understood by consumers: smartphones are constantly gathering information on users' location, through a combination of apps, the smartphone's o...
Read more

All the coolest features of every Tesla vehicle ever made or unveiled, ranked (TSLA)

* Tesla's vehicles are and always have been crammed with great ideas. * These range from touchscreen interfaces to innovative battery designs to staggering acceleration. * I've driven or experienced every vehicle Tesla has ever sold or intends to sell in the future. * Here are all my favorite features, ranked. * Visit Business Insider's homepage for more stories. In about two decades, Tesla has done what everyone in the auto industry thought was impossible: create an all-electric brand that could sell hundreds of thousands of vehicles. Tesla could have done that in a boring or modest way, developing  the equivalent of an electric VW Beetle. Instead, Tesla made fantastically compelling cars that are fast, look amazing, and are packed with features. Here's a rundown of all my favorites, ranked from bottom to top: FOLLOW US: On Facebook for more car and transportation content! Tesla has been in business for 17 years. In that period of time, it's consisten...
Read more