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

Tokyo installed see-through public toilets in a park to let people inspect their cleanliness before using them, at which point the glass turns opaque

* Two see-through bathrooms have been installed in public parks in Tokyo. * They are made from "smart glass" designed so people can see how clean they are inside before using them. The glass turns opaque when the bathroom is locked and in use. * The stalls are part of a project that is redoing 17 of the city's public bathrooms with different designers to make them more accessible and appealing. * The goal is to fight assumptions that public toilets are "are dark, dirty, smelly, and scary," said the nonprofit foundation behind the project. * Visit Business Insider's homepage for more stories. Tokyo has installed two see-through bathroom facilities in public parks, allowing people to see how clean they are before deciding to use them, at which point they turn opaque. The bathrooms are made of colored "smart glass," which turns opaque when the stalls are locked, said Shigeru Ban, the architect behind the designs. You can see how it works her...
Read more

Bill Gates says the world would need as many as 14 billion doses of a coronavirus vaccine to stop the virus

* The world could need as many as 14 billion doses of COVID-19 vaccines, Bill Gates said on Thursday in a blog post about the race to develop a way to make people immune to the disease. * "We need to make billions of doses, we need to get them out to every part of the world, and we need all of this to happen as quickly as possible," Gates said. * Gates said he had his eyes on eight to 10 promising candidates, adding that healthcare workers and people in low-income countries should be first in line once we find one that works. * While potential vaccines are progressing with historic speed, they're still months, or even years away, and the biggest challenge lies ahead in proving whether they are safe and effective in humans. * Visit Business Insider's homepage for more stories. Bill Gates believes we may eventually need to produce as many as 14 billion doses of COVID-19 vaccines globally and that we're anywhere from nine months to two years away from making tha...
Read more

The 11 most important details we already know about the PlayStation 5, Sony's next-generation video game console set to arrive this year

* The PlayStation 5, Sony's next-generation game console that's deep in production, is scheduled to launch during the 2020 holiday season. * As you might expect, the PlayStation 5 is promised to be more powerful than the existing PlayStation 4 — and we've slowly been learning more about the next-gen console's new features since it was first revealed. * So far, Sony has offered a first glimpse at the new console via its new DualSense gamepad, and a tech demo highlighted the technical prowess of the new machine. * Here's everything we know so far about Sony's next-generation PlayStation console. * Visit Business Insider's homepage for more stories. The PlayStation 5 is almost here. Sony's next-generation PlayStation game console is scheduled to arrive this holiday season, but we already know plenty of details about it right now: how powerful it is, its main features, and we've even gotten a good look at its new gamepad.  Here everything we kno...
Read more