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what's up guys Ryan here today I wanted
to do a quick video about the changes
coming to the printful platform for
those of us doing drop ships
print-on-demand sales on e-commerce
platforms like Amazon eBay Etsy and then
fulfilling those orders through printful
we've probably if you're paying any
attention you probably noticed that
you're starting to see sales tax charged
to you by printful and you didn't have
any say in this matter it kind of just
happened overnight so what happened was
starting March 1st printful announced
that they were going to start charging
sales tax in certain states now first I
just want to tell you why this is the
case so I've been doing a lot of
research I'm not a tax expert I'm a web
developer
according to tax job right here the
Supreme Court ruled in South Dakota
verse Wayfair that you no longer had to
have a physical presence in a state to
be required to pay sales tax in that
state now you can have what they called
an economic presence so what this meant
was I'll just read it in other words due
to the way fair ruling even if you do
not have a physical presence in any
state if you pass a state's economic
threshold for total revenue or number of
transactions in that state you're
legally obligated to collect and remit
sales tax to that state and you're
thinking well what is the threshold am I
really gonna have to do this well if you
actually look it up the threshold is
often only 200 transactions per state
which is quite easy to I mean if you're
established it's it's pretty easy to
surpass that or a hundred thousand
dollars a year which you know and that's
again each state is different so this is
another tax jar page but Colorado
$100,000 a year gross revenue or 200
separate transactions Connecticut
250,000 a year Georgia 250,000 a year
but they all use 200 so 200 seems to be
the most common number of transactions
for you to be required to remit sales
tax to them and so anyways what printful
ended up doing to try to make this
easier and protect themselves from any
liability is they just went ahead and
charge sales tax on our behalf so they
have a list here which represents the 36
states that they charge sales tax in
currently and this list can change it's
subject to change but they mean
it on a printful URL that I'll put in
the description anyways you can see a
list of the states here where if you
have customers purchasing from the
states you'll likely see something like
this on your printful bills so notice
this extra line called tax here they
charge a dollar seventy eight here they
charge two dollars and twelve cents so
collecting sales tax on our behalf for
like Amazon orders for instance is
actually doing us a favor in my opinion
because the alternative to this is you
have to go register for a tax
certificate in each individual state and
then collect sales tax yourself and
remit sales tax to each state yourself
obviously this is meant to be a passive
as passive as possible business model
and that sounds like a lot of work
because it is so by printful doing this
we're not on the hook to do that on our
Amazon sales while printful also does it
on our etsy sales and our eBay sales and
sales from everywhere else they're just
doing it across the board the only way
this becomes a problem is what if the
market places themselves charge sales
tax and there's nothing we can do about
it well unfortunately what I just
described is taking place on Etsy so
currently there's a list of 13 states
that by a certain date these states
began charging sales tax or they will in
the future it looks like three of them
haven't started yet New Jersey DC and
Alabama but ten of them already have
meaning if we have customers in those 13
places they will be charged sales tax
via Etsy unfortunately printful is not
aware of this and they're trying to
protect themselves so they'll charge us
sales tax either way to be remitted to
the state what that means is we're
paying double sales tax to the state so
they're really coming out ahead in these
specific cases and there's nothing we
can do about it I've checked on the
printful Facebook group and the admins
have said they're aware of the issue but
there's they basically said you know I
work for a company that does what
development and we just say yeah you
know we sent it to the dev team dev
teams working on it and what that means
is we don't know when there's gonna be a
resolution if there's gonna be a
resolution obviously this is something
that's gonna anger a lot of people using
the Etsy printful integration so
hopefully they do figure it out at some
point but for now what you'll see is
coming back over here these two
instances I
go in and I see there's Etsy charging me
sales tax on it and I'm being charged by
printful so the only real winner here is
the state they're making out big time
but anyways I mean from a tax liability
perspective you all you never want try
to cheat taxes that's a terrible
solution for a long-term business model
like print-on-demand so just accept it
mark up your prices if you have to do
whatever you can to survive this it's
gonna suck a little bit one thing that I
did note in one of the Facebook group
discussions talking about the new sales
tax law is that if you use printful and
you use their dynamic shipping options
and you charge your customers a flat
rate for shipping like you can see here
I often charge my customers actually you
can't see here because this is what I
actually pay printful but I usually
charge my customers either between $5 to
$5 75 cents flat rate for shipping any
of my print-on-demand products and then
if printful fulfills them you can use
the dynamic shipping and often times you
can ship via DHL expedited Express for 3
dollars and 50 cents to the majority
locations in the United States anywhere
from $3 50 cents to like 4 dollars on
average and then you pocket the
difference so if you collect $5 75 cents
you can make between a dollar fifty to
two dollars on average which pretty much
covers the sales tax so just a thought
there I know a lot of people do free
shipping to entice customers to buy I've
experimented with and without on etsy
specifically I think if you run a 10%
off sale it still tags your listings in
search results and lets them stand out
to get those clicks from customers and
let them feel like they're getting a
deal either way I definitely think you
should be running some sort of a
promotion either free shipping or some
sort of percent off but just so you know
10% off typically means you make more
money than if you do free shipping and
for me charging flat rate shipping and
then using print phones dynamic shipping
to fulfill on the back end which I made
a separate video about about how to get
more Etsy reviews by upgrading people's
shipping to DHL expedited one to three
days and then messaging your customer on
Etsy saying hey I bumped up your
shipping for free a little do they know
they paid you more money than it costs
to upgrade the ship and you actually
saved money by changing their shipping
to D H
expedited anyways I'm ranting thank you
guys for checking out this video if you
liked it hit a thumbs up subscribe drop
me a comment and I'll see you at the
next one wherever she goes I go we bow
we go now you know the city's down to B
oh sweet oh man I feel nothing else
forever but I'm down for the many
soldiers chill
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