 So when it comes to dropshipping in the UK, there's three really big questions I get asked quite frequently too, almost on a daily basis. In fact, number one is customs, UT, VAT, income taxes. How do I pay them? Do I need to pay them? How do I avoid them? Who pays them? Does the customer pay them? Question number two is do I need to set up a company? Do I go sole trader? Do I go limited? What are the advantages? Which one's right for me? And then the third and final question I get asked all the time is delivery time. So customers, are they really willing to wait for that 20 to 40 days that AliExpress quotes? So there are the three questions I'm going to be answering in this video. Hopefully by the time you've finished watching this, then your mind will be put at ease and you'll be ready to get started in your dropshipping business. Because trust me, the best way to become good at running a business is by actually running a business, not by watching YouTube videos. Before we get started though, one big favor to ask, and that is if you enjoy this video. So if I answer any of these questions adequately for you, please do me the favor of hitting that like button. If you have any comments, questions, video suggestions, make sure you post them down below too. I read every single comment. And then third and finally, only 50% of people who watch these videos are actually subscribed. So if you haven't subscribed yet, please make sure you hit that subscribe button now. And that being said then, let's jump straight into question number one. So the first topic I want to address in this video is customs, duty and VAT. So these are two potential charges, two potential costs that you will come across as you're dropshipping. So outside of the EU into the UK, you have customs duty and you have VAT, two completely separate things. And these aren't to be confused with the VAT if you're a registered business where you pay 20% on all sales. They're not to be confused with corporation tax, which is what you pay on your profits if you're a business. And they're not to be confused with income taxes as well. These are the taxes on the goods that you're bringing in. And that's it, just two separate things. Number one is customs duty. So this is charged on all gifts and goods if they're sent from outside the EU. So if you're dropshipping from China, then customs duty will come into play and they have to be above a certain value. Anything under 135 pounds, there will be no charge and you won't have to worry about paying customs duty. The second potential cost you have to worry about is VAT, which is currently charged at 20% of the total value of the goods. And this is charged on goods sent from outside the EU, so IE China into the UK. And you don't have to pay VAT if the cost of those goods are under 15 pounds total. So as it says there, under 15 pounds total equals no charge. If your goods are more than that, then you have to pay VAT on what the total value is. The next point you have to consider as well is these values. So the 15 pound total, the 135 pounds total, this includes the postage cost. So if you buy an item off AliExpress that costs 14 pounds 99, as long as there's no delivery cost, you'll be absolutely fine. But if you have to pay E-Packet on top of that and that takes it over the 15 pounds total, then there will be a VAT charge to pay. The next important note to keep in mind is that this is on the total value of the goods that we pay for. So it's what we pay on AliExpress. If you're buying an item for 10 pounds total and selling it for 50 pounds, it's only based on what we pay on AliExpress. It's not based on what we sell it for. The next thing I wanna kinda clarify as well is that the source of this information is as of March 2020. So if you're watching this one, two, three years later, it may have changed. The best thing to do to get the latest up to date information is to go to this link here. So this is from the official.gov.uk website. So as I'm recording this now then in March 2020, then all of this is so far accurate. The next question to answer then is should I set up a company? So should I go limited, should I go sole trader? Basically there's three different ways you can do it. So when you start a business, you can set up as a sole trader, you can set up as a limited company or you can go as a partnership. Now it's really difficult to kinda give a blanket answer to this because it depends on so many different factors. It depends on whether you have a job and how much money you earn from that. It depends on whether you own a house, do you have a family? Ultimately the best advice I can give you is to speak to a financial professional, i.e. an accountant and they will ask you probably half a dozen different questions and depending on what your answers are to those questions, the ones I've just mentioned, they will then advise you what the best thing to do. However, most of the people I speak to then attend to be quite young students who aren't earning any money. So for most people I'm guessing that they would want to register as a sole trader first and you have to do this then. So the point in which you have to tell HMRC that you're running a business and you're earning money is when you earn more than 1,000 pounds in a tax year. Now just to take you through the kind of argument of sole trader versus limited company because there's no doubt some people will ask me, what's the difference? Why do you do one over the other? I've bullet pointed the three kind of main advantages or at least they're the main advantages in my mind. In terms of a sole trader versus limited company, when it comes to actually running your business, i.e. accounting, then it's a lot cheaper to do so because as a sole trader you can register for self-assessment and you can file your own accounts. As a limited company to my knowledge you have to pay a registered accountant, a chartered accountant to file your account on a yearly basis which depending on who you go with usually somewhere between kind of 500 and 1,000 pounds. Point number two is that limited companies offer better tax relief when you hear a certain amount of profit. So when you're running as a sole trader any profit you make would be classed as income tax. Income tax typically is higher when you get to a higher amounts income tax is typically higher account talk right now than corporation taxes. So depending on how much you're earning sometimes it's financially beneficial to register as a limited company. The third one and the biggest advantage from me at least because I own multiple different properties is that limited companies give you better protection. So the potential debts from your drop shipping business are separate from your personal finances. So for example then because I own multiple properties if one of my drop shipping business because they're all registered as a limited company if somebody was to sue me and I become liable to pay them let's say 300 grand and I don't have that money in the bank then if it wasn't a limited company and I was a sole trader I could be forced to sell those properties that I own in order to foot the bill. But when you register as a limited company the company becomes a completely separate financial entity to you and yourself. So if you have a family for example and you live in a house and you have a mortgage on that house the advantage of having a limited company is that if your drop shipping does become liable to pay some money then your house that you and your family live in is completely safe and not at risk. And again this information is from the.gov website and it's correct to my knowledge as of March 2020. The third and final question then probably the most important or the biggest question or most popular question sorry that you'll see going around in different Facebook groups is e-packet delivery times. Do customers really wait that 20 to 40 days that you see AliExpress quoting? And right a couple of points now. So number one is very, very, very, very, very rarely does it take longer than that 20 days. Here is a graph as you can see as an experiment of all different e-packets and that was sent on different dates back in 2018 and these are the number of packages so you can see typically over sometimes 10,000 orders per day and this was kind of like tracked on how quickly they were delivered. So what we can see is that within day 14 so within two weeks on average over 62% of those packages would arrive and then typically by the end of day 16 over 80% of that. So what you're talking about here is that within day 11, day 12, one in five e-packet packages are going to arrive to your customer and this is to the UK as well. Now the reason AliExpress applies and quote that 20 to 40 days or sometimes you'll see 20 to 35 days is because if an item, e-packet is tracked so if an item isn't delivered within that timeline within that date range that they give so within 35 days, within 40 days then you as a buyer can claim your money back whereas if it arrives quicker then obviously you can't because that's a good thing but if it goes over that then you can claim your money back so most supplies tend to give that kind of extended delivery time just in case whatever happens they need an extra week to processing so for example if it's Chinese holidays or if your item gets held up in customs which can sometimes happen on a rare basis then again it just gives them that breathing space and that's typically why they'll put 20 to 35 days or 20 to 45 days. What you have to realize as well is that most of the supplies on AliExpress aren't accommodating for the drop shipping market most of them are accommodating for end users so they don't mind quoting that a little bit extra because they're the end users they know it's coming from China so they would expect it to take a long time anyway. The next thing you can do then I wanna finish this video on that not many people know you can do is if you're still unsure and you still wanna try and source your products a bit quicker then there are there is something that you can actually do on AliExpress which I'm gonna show you now. So from your AliExpress drop shipping center then if you already have a product that you really wanna drop ship you've already found it say you've got your supply lined up and then just on the off chance you wanna see if you can source it a bit faster which I recommend everybody do by the way come into your drop shipping center put in so let's say you're drop shipping dog collars you can search for dog collars if it loads and then what you can also do is just change this to the country that you're drop shipping to so I want to drop ship to the UK I always do in the beginning and then I wanna try and find some countries that are a bit closer to the UK because then delivery is gonna be a bit quicker so for example I know that Spain have some really fast delivery time sometimes so essentially what it's done now is it's given me all the products I can source and drop ship from Spain into the UK and that's also gonna change up the import duties and VAT as well so if I just choose this product as an example then just to show you how quickly you can actually source things because this is quite a big supplier they have many countries in which you can source is from Poland I've never actually seen Poland before but as we can see estimated delivery to the UK is five to 20 days and that's free shipping too we have France cannot deliver to the UK and then we have Spain so again free shipping to the UK from Spain is estimated delivery on March 12th so that's about a week, nine days so as you can see if you do already have a product then that you are wanting to drop ship it's always worth coming to your drop shipping center just to see if you can source it that bit quicker and with that being said then guys I think that pretty much just wraps up the video so I'll take you to the final slide just to say thank you very much for watching hope you enjoyed it, if you did please do make sure you hit the like button please subscribe, any comments, questions or anything at all you wanna ask me I do read every single comment so make sure you do just post it down below for more content then on Shopify and drop shipping please check me out on Instagram at Jack Kitchener 458 check out my free e-box in the description below too there's five different ones that are 100% free to download and then finally if you did want a step-by-step proven program on Shopify make sure you check out my Ecom Academy as well again the link for that will be in the description below and that being said then thanks very much for watching I hope you enjoyed it and hopefully seeing you in the next one