UK seller- Confusion about tax on items?

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New Member
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Hi,

 

I signed up for shopify a couple of days ago, it seems relatively straight forward to someone who doesn't understand coding, but I've ran into some confusion.

I will be dropshipping, I have found some suppliers.

I have only managed to list one product before I've ran into problems, firstly I am confused by the taxes. I presumed dropshipping was as simple as selling on Ebay. In the past I have just added ontop whatever profit I feel I can make then add postage costs. Is there a free app that takes  care of this, or is it something I need to learn, I've never earned enough to have to know about taxes so not sure where to start. Other people have told me im over complicating things and to figure that out once I've earned over £1000 but I dont want to risk getting in trouble or having annoyed customers because they buy an item then have to pay extra cost at the other end they were not expecting.

The other things I am wondering about is stock quantity that it asks for, what do you do when dropping shipping? I put in a random number as the suppliers said they always have enough stock etc so I thought maybe to start with 80-100 as stock listing? or is this a bad idea?

Lastly, im having problems getting rid of the 'collection' section at the bottom, I tried putting the products into it but it is no working and just keeps showing the unedited version, everything else is working fine so i thought possibly im confused with what is suppose to be inserted here.

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Shopify Staff
Shopify Staff
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Hi, there!
Morgan here from the Social Media team at Shopify. 

Thanks for reaching out over the forums. I can completely understand feeling overwhelmed when first starting up a new business. Having to wear a lot of hats or be a "jack of all trades" can lead to confusion and doubt with things such as taxes. 

When it comes to taxes, if you click the "charge taxes on this product" tab within the product, general local taxes for your area will be generated for those items. You don't have to go in and add tax rates manually. Granted, most areas only require tax to be charged for customers also in those areas. So, many of you customers (ones from outside you region) will automatically be tax exempt, which Shopify recognizes for you. 

This does differ by country/local area, but Shopify will provide those general tax rates automatically. You can see those under Settings>Taxes. It is always good to double check with a local tax professional to see if the products you sell require special taxation. 

Once you have chosen whether or not the item is taxable, you can then choose whether or not the tax for your store is to be added on top of the item prices, or if the item price includes tax. If you choose the latter option, this will help with the issue of added costs at checkout, like you had mentioned. You can choose this in your settings under Settings>Taxes as well. 

In many countries you don't actually have to pay business/income tax until you reach over a certain annual revenue. This is good to note as you might not be required to pay those taxes right away, but they should be kept track of for when you do need to. Your Shopify reporting can break down the taxes you've collected when it is time to dive into those numbers. 

When it comes to inventory, because you are drop shipping you can toggle the "Shopify keeps track of inventory" button. This will allow you to sell as much as you would like, without Shopify marking anything as sold out. Also, some products imported from Oberlo will automatically import the inventory levels as well, meaning you will not have to update these inventory levels manually. 

Example product page for the tips above: 

Lastly, are you able to elaborate on the collection section you are referring to? Are you meaning the "featured collection" on a home page? If so, to add products here you will need to follow 2 steps: 

1. Create a collection under Products> Collections, and add products to it. 
2. Go into your theme editor, Online Store> Themes> Customize Theme> Sections and go to the "Featured Collection". You will then have the ability to choose your newly created collection to feature on your home page. 

Let me know if you have any troubles with these steps, or questions on the topics above! 

Morgan 

Morgan | Social Care @ Shopify
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