Archive for January, 2010

Cost of sales – makes you wonder why you bother

January 23rd, 2010

It’s amazing how quickly cost of sales tot-up. An item I am going to be selling costs me £12 to purchase from the supplier (as long as I buy more than £200 at a time and pay before shipping and don’t want express shipping) – however, to sell it, I’ve got to add postage costs of £2.24 to get it to the customer (well, I will come the 1st of April when UK postage prices go up again), then I’ve got to add VAT at 17.5% on top, then I’ve got to add Paypal fees of 20p and 3.4% on top of that – giving me the final “cost of sale” of £19.54 – that’s £7.54 I’ve got to pay to third parties just to sell this item. One of my more expensive items costs me £21 to purchase, and the cost of sale is £31.19 as Paypal and the VAT man both want a larger cut….

I’ve then got to try and make a profit on it, remember that if I do make a profit I’ll then have to put around 30% of it to one side to pay as Corporation Tax – I’ve also got to try and account for “shrinkage” (i.e. when a package gets lost in Royal Mail’s systems and I’m not able to reclaim the full amount), got to try and account for the costs of running the server and website I’m running the site from (around £120 per month, plus bi-yearly domain registration fees and SSL certificate costs), any bank/charges and interest, telephone line usage (even if it’s just for incoming calls, I’ve still got to pay line rental), £35 monthly accountancy fees, £15 annual return fees and various other little bits and bobs (insurance/storage costs etc): and that’s all before I can even consider paying myself some money for the time and effort I’ve put in. Oh and if I do start paying myself money, I’ve then got to pay National Insurance contributions, Employers and Employees tax, Payroll fees and other little annoying bits…

I do sometimes ask myself why I’m bothering: all this work for very little (if any payoff) – but if I was just unemployed, I’ll actually end up, at the end of the day, with more money… Meh!

Moan: Single occupancy hotel prices

January 15th, 2010

I’ve watched some of Channel 5’s “The Hotel Inspector” about Walpole Bay Hotel in Margate and I thought I’d go to their website to see if they were still in business and they are. However, I then saw their Rooms and rates prices which offered “Prices below are per room per night including breakfast ” – but then said “In a double or twin room is £50 per night increasing to £60 during high season” (note a “Standard double” during “Low season” is £60 so you are nearly doubling the price – and also note that they don’t actually offer single rooms, nor is there a single supplement charge on their sleeps 3 Family Rooms or sleeps 4 Family Suites!).

If you are charging by the room, why does it matter how many people are in it? And if you are including breakfast in the price of a double/twin room and there is only one person staying, doesn’t that actually *save* you money? And what happens if you actually book it for two people, but one person is ill and can’t make it or has to go home half-way through.

I wish this practice would stop – either charge per person or charge per room: don’t do both!

gamy-dance
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