Etsy Integration Sales Tax

Discussion in 'Shapeways Shops' started by VBits, Mar 10, 2021.

  1. VBits
    VBits Member
    For those using the Etsy integration, is there something I'm missing for handling the sales tax?

    I had a customer place an order on Etsy, which gave me print cost + markup + shipping as a credit. However, the shapeways order then charged print cost + shipping + tax on the print cost, which was shipping to Denmark (25%, wow!). That charge was more than enough to wipe out my markup, so it comes out to a loss overall. From my perspective, taxes are paid on the order twice, once for the buyer purchasing from me, and once for me purchasing from Shapeways.

    What I'm wondering is if there is something I'm missing here? Does everyone else using the integration just price the tax into the markup? If so, how do you deal with the wide range of taxes across the globe? Marking 25% for a country like Denmark makes it way more expensive for US customers etc. I've seen people talking about resale certificates, but I'm not sure how that works/if I would have to get one for every state/territory I'd want to sell in? Is there some way to claim the cost otherwise? I'm very new to all of this, so thank you for bearing with me.
     
  2. wgseligman
    wgseligman Well-Known Member
    I've noticed the same thing, though fortunately no one has ordered anything from Denmark (I guess my stuff isn't that interesting). I've just accepted double-taxation as yet another cost of doing business via the Etsy-SW integration.

    A potential (though unpleasant) solution is to raise the Etsy shipping fee to places like Denmark for your products so that you make a net profit on the sale. The problem is that Shapeways' shipping fees have occasionally caused complaints from my Etsy customers (all while Etsy is encouraging us to offer "free shipping") and increasing those costs may cause your own customers to complain. If you increase your shipping charges to make up for taxes, the cost of "shipping" that your Danish customers see could grow so high that it will discourage them from purchasing your product.

    The overall issue is that we're using expensive services for our products (Shapeways' printing+shipping; Etsy's marketing). Since they're independent businesses, they're required to individually pay taxes, which they pass on to us. We have to allow for that in our price planning, go elsewhere, or accept that there's no business model for what we're trying to do.
     
  3. EvaShinQ
    EvaShinQ Member
    That is a terrible phenomenon in the sales process, and I felt a huge loss of money when I had a big party to send to Denmark. Seligman said, right, you need to raise the price to avoid any losses, but the customers will complain about that. Personally, I started to use groovefunnels from https://xnura.com/groovefunnels-review/ for expensive products, so it is easier to sell them and save money on taxes. You can have a try if you're interested. If you use it correctly, you can easily increase your sales.
     
    Last edited: Apr 29, 2021