Online Store (importing, tax etc.)

[Pooky]

So I was thinking I might like to try my hand at having a small online store selling niche products.

It's just an idea so I am doing some research beforehand as I know it can be a difficult thing.

My first question has to do with importing.

Does anyone run a store that would know about this, for example registering for an importers license, do I need a license to resell stuff, tax number etc, or are there any guides available?

 

[saturnz]

the first problem you going to run into is the same problem major domestic retailers have in competing with international suppliers, basically you would have to charge VAT whereas the international retailers can escape this (onus is on buyer to declare VAT payment).

current tax legislation amendments attempt to remedy this by expecting international suppliers to register locally for VAT by April next year but by that time, so until then your prices will effectively be atleast 14% more than that of international suppliers.

 

[Paratex]

Allot depends on what you going to import and how you do it, if your product is niche and you can establish yourself with a reputation in your niche field.

If you importing you going to need a permit this is a simple process and simple form to fill out from SARS.

I am a South African living in China, I do allot of wholesale and retail work on various platforms, one thing I can tell you is that there are many gaps for you to be able to do things that are cost effective for you. Its allot of work for little reward especially at the beginning.

 

[Pooky]

Yeah the stuff would be clothing from various places; but I think the problem is the 45% customs duties plus 14% vat.

By the time you have paid all that the cost price would be through the roof.

 

[saturnz]

yes and I can tell you cheap imports from China is on the SARS radar, currently there is a window but it will be closing soon as we cannot afford to run R20bn monthly trade deficits mostly as a result of inelastic imports, something has to give.

 

[greggpb]

FOB Price = purchase price at factory door + transport to closest port
CustomsValue = FOB Price X 1.1
DutyPayable = CustomsValue * duty Rate
Direct import VAT = 14% of (customsValue + DutyPayable)

therefore for a t-shirt that costs 100
FOB(100)+Duty(49.5) + VAT(22.33) = 171.83

 

[Pooky]

FOB Price = purchase price at factory door + transport to closest port
CustomsValue = FOB Price X 1.1
DutyPayable = CustomsValue * duty Rate
Direct import VAT = 14% of (customsValue + DutyPayable)

therefore for a t-shirt that costs 100
FOB(100)+Duty(49.5) + VAT(22.33) = 171.83

Thanks that's helpful.

In terms of selling, does one have to register a company?

 

[greggpb]

you don't HAVE to register a company you can be a sole trader, but it make sense to register a company

You also can claim the vat back irrespective of the size of you company and you need to file a DA185 and submit it to customs to get a importer code..

 

[itareanlnotani]

yes and I can tell you cheap imports from China is on the SARS radar, currently there is a window but it will be closing soon as we cannot afford to run R20bn monthly trade deficits mostly as a result of inelastic imports, something has to give.

I have one word for that - WTO.

I'd register a company, get a provisional vat number, and get an importers licence. Its fairly straightforward.
Clothing is a bit trickier, especially from China, as you have to deal with import quota's (which is an allowed method under WTO to protect local industries). Local manufacturing prices are competitive with China for some area's - eg T-Shirts, as duties make up a high proportion of pricing.

eg.
T-Shirt cost of manufacturing in China would be around RMB15 (R25), landed would be about R50 + duties would bring you close to R100. You can buy retail here for less...

If you do small items - you'll be basically doing air freight. Air freight can work out cheaper surprisingly than Sea Freight despite the cost difference. Clearance costs here are insanely high compared to other countries.
Its only when you start doing container loads of product that it starts making sense.

That said, there are huge margins in some area's for offshore vs local pricing, and lots of opportunity.
There are literally times when I've gone shopping here, and looked at the price and gone screw that, I can import it myself from China for 1/10th the price, and had staff ship me something over. Doesn't make sense though unless you already have infrastructure in place for that.

Importing is the easy part. Sales & distribution is harder...

@Paratex - Where you at in .cn ? (I'm in Shanghai most of the year).

 

[DJ...]

The little pookster considering the selling business again? Lol. The last time it didn't end well for you. Especially the part where most people accused you of scamming them. Shame. That kind of thing will follow you around.

For the record, for anyone considering buying anything from the pookster, be warned that he was previously banned from this forum for his scam-like selling. He was blacklisted from Bidorbuy for the same. He registered numerous accounts all over SA forums trying to con people into buying from him. He even tried to get someone to donate him a Nintendo Wii while simultaneously trying to sell it. He's also been banned from numerous forums for the same behaviour.

Do not be conned by Pooky aka squirrel, aka HelloThere. Be warned. And advising him in this respect is also irresponsible on your part...

 

[Sensorei]

Wow, super dodgy. Thanks for the warning haha.

 

[lived666]

People change, grow older and wiser.

 

[DJ...]

People change, grow older and wiser.

So we give them a second chance to hopefully this time around not scam us?

That's not how it works in my book. And people should be forewarned not to do business with this kid...

 

[lived666]

So we give them a second chance to hopefully this time around not scam us?

That's not how it works in my book. And people should be forewarned not to do business with this kid...

Yeh, definitely, the kid has grown up in my book. I mean come one, all that **** was what 5 - 6 years ago?

BTW didn't you recently get a second chance on this very forum

 

[DJ...]

Yeh, definitely, the kid has grown up in my book. I mean come one, all that **** was what 5 - 6 years ago?

BTW didn't you recently get a second chance on this very forum

Makes little difference. We wouldn't accept Brian Gibello back here and we'd warn against anyone doing business with him.

The fact that the pookster was able to stay on the site due to a technical error on ic's part should make no difference at all to whether people should do business with him. It would be bloody irresponsible to not warn people about his past.

Ironic that he's now using the very same site whose users he tried to scam, to get advice about setting up an online store.

I wouldn't trust this little bugger with a cent, let alone credit card or any other payment details. Nor would I trust him to this time actually deliver anything. I sincerely wish him all the failure in the world and will happily warn off others from putting any trust in him.

He made his bed. You don't just pretend that it didn't happen...

 

[azbob]

Hello there, what ever happened to that wii?

 

[DJ...]

Edit: I see pookys attempt to defend himself was deleted so this post has less context now. And his comments about rwenzori are now also gone...

There's a reason ic banned you as HelloThere and your nonsense as squirrel was well documented on this and other forums. Some of us haven't forgotten. For the record again, that's not how BoB works. You're lying again.

My heart pumps lumpy custard for you and your attempts to now start a venture in online sales. You were a dishonest spammer then, trying to sell things that you didn't have and dishonestly attempting to make yourself seem legit. That's how a scam works. Whether you want to admit it or not. PM and email whoever the hell you like. No skin off my back. This isn't a vendetta at all. It's called lying in the bed you made. A life lesson that you need to learn. Running to mommy and crying foul is not...

 

[Pooky]

Edit: I see pookys attempt to defend himself was deleted...

I removed it as it was directed at abzo.

DJ, all I can say is you hurt me with your false accusations and at the same time I pity you.

 

[DJ...]

Edit: I see pookys attempt to defend himself was deleted...

I removed it as it was directed at abzo.

DJ, all I can say is you hurt me with your false accusations and at the same time I pity you.

So do you wanna go down that path again and explain yourself to people? Seems if you want to make amends you might want to start with addressing the elephant in the room. No point pretending that it didn't happen. It did. And people I know were aggrieved and felt taken for a ride. I'll drop them an email and have them come into the fray here to have their say as well if you'd like? Or you can for once address it by your own accord. I have absolutely zero compassion for your hurt feelings. You're not the first person to feel hard done by when their actions got them in the dwang.

So please, go ahead. Explain how it is that mybb members felt taken for a ride, how BoB blacklisted you, how the 360 forum banned you, why you spammed this forum under two different user names at the same time and faked convos to make things seem legit, or spammed forums with hearts to drive up your post count, or why you even had to do any of these things in the first place. Or why you tried to sell things that you didn't actually own at the time?

Crying foul because people point out your own actions is childish. So you want people to just leave you alone and expect the forum to trust you. Earn it. Explain yourself...

 

[azbob]

Got your PM. Perhaps you should re-post it here for others to see your side of the story.

Anyway, I wasn't around at the time of these incidents so can't really choose sides.