As you will know by now, we at J&P specialise in helping Amazon sellers expand their business and keeping them up to date with all the latest changes to Amazon’s service. Since we’ve already covered many of the changes to Amazon’s VAT obligations (which you can find here) it seems only right to update you on some of the other changes that are coming into effect in the coming months, such as fulfilment fees and returns policy. If you are an Amazon seller, you’ll want to make sure you are aware of these changes and that you prepare accordingly.
VAT Obligations: Amazon Changes
Whilst we have already covered these Amazon changes in previous articles, it still seems prudent to go over them again briefly as understanding the new rules will be vital for you to maximise your profit in 2021 and beyond.
The main things to remember are that Amazon are only responsible for accounting for VAT on B2C sales, not B2B sales. Whilst this seems redundant, since most sales you’ll be making are B2C by nature, it is still worth noting to make sure you do not accidentally neglect to pay VAT on your sales.
Secondly, their responsibilities only extend to sales that have a value of up to £135 when the goods are being acquired from overseas. This includes sales below £15, since the Low-Consignment Relief was abolished at the beginning of this year. This is because up until this value goods are not liable for import VAT, just sales VAT. If you want more information on this topic, click here.
Changes To Fulfilment
As you will already be aware, Amazon have stopped offering cross border fulfilment for cross border sales to and from the UK and EU. However, these are not the only changes you need to be aware of. Firstly, it will come as welcomed news to many of you to hear that Amazon are offering fulfilment for ‘big and bulky’ products from April 1st. This means amazon are going to be even more accommodating to sellers who sell larger items such as home appliances and furniture.
In addition to the Heavy and Bulky FBA program storing and shipping massive products on behalf of sellers, the program also provides greater delivery options for customers. Customers who have or do not have a Prime membership can select from Scheduled and Room of Choice delivery options, depending on their region.
Please be aware though that Amazon will charge you a minimum referral fee of £15 on top of usual FBA-related fees for each item sold. Also, the maximum weight/size of items will vary from country to country.
This is not the only change to fulfilment fees. Amazon have announced new seller fulfilment fees that will take effect on June 1, 2021. However, they have been quick to point out that they are making only modest increases (about 2-3% on average) to fulfilment fees, in order to bring them in line with or below industry averages.
They have also pledged to reduce certain fees, like the returns processing fee, which reflects feedback they have received from sellers and their continued efforts to reduce costs.
Returns Policy
If you follow the Amazon notice board then you will know that changes to the returns policy have caused a lot of confusion over the last few days. They have now clarified the new changes by informing us that from April 15, 2021, they will offer your customers returnless and free replacements as an option for eligible items as part of their Prepaid Return Label program . This change will provide you additional return resolutions and offer customers the option to receive a replacement item at no extra cost.
Whilst on the surface this might seem worrying on the surface, it should ease your concerns to know that this only applies to self-fulfilled orders and you have to opt-in for this scheme. This should limit the amount of refunds you have to give out. Further, even if you have opted in to the scheme, you can still cancel the order should the buyer attempt to get a replacement item that you are not happy with.
All Seems Positive For Amazon Sellers
All in all, these changes all seem to be positive for Amazon sellers; just ensure you understand all the changes fully and prepare your inventory and prices in any way you deem fit.
Don’t forget our long history of working with Amazon and eBay sellers means we can offer you expert advice, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com. We would be more than happy to help you register for UK & EU VAT, the UK VAT deferral scheme, EU and UK EORI number, file your UK & EU VAT returns, and help you comply with VAT in case your account faces any issues.
