Does Lazada need to consider VAT when calculating prices? How to set prices?

Lazada is still gaining momentum in Southeast Asian countries. When opening a Lazada store, sellers are also concerned about the Lazada bill settlement time, after all, this involves the turnover of funds. So does Lazada need to consider VAT when calculating prices?

Does Lazada need to consider VAT when calculating prices?

Lazada also needs to consider VAT when calculating prices. VAT must be paid if VAT tax obligations occur. VAT is the abbreviation of Value Added Tax, which applies to imports, commercial transactions and service activities generated in the UK. VAT applies to sellers who use overseas warehousing because your products are shipped from the UK and the transaction is completed.

VAT sales tax and import tax are two independently paid taxes. You have paid the import tax for the goods when they are imported into the UK overseas warehouse, but you also need to pay the sales VAT generated when the goods are sold.

If your products are shipped from local UK warehouses, they are subject to UK VAT. We recommend that you find a solution as soon as possible to register for a VAT number, declare and pay taxes, so that you can legally use local UK warehouses for shipment and sales.

How to price?

1. Product cost price;

2. Logistics costs: (including domestic and international parts);

3. Platform commission: 1-4%, calculated based on sales;

4. Tariff VAT: 1 – 2%;

5. Local national shopping tax: According to local policies in Southeast Asia, the value of the high-tech order is subject to a certain percentage of tax. Different countries have different requirements. Most of the products sold on the platform do not need to pay this tax, only a small number of high-tech unit prices need to pay.

6. Event discounts: Platform events are Lazada’s most important traffic channel. When pricing your products, event discounts should be factored into your pricing costs;

7. Return rate and package loss rate: With the development of platform logistics in recent years, the package loss rate in logistics can be well controlled. If there is any loss, the platform will generally compensate for it. The cost ratio is very low.

To calculate the product cost of Lazada, you only need to determine several dimensions, namely the VAT of the goods, cost, domestic shipping, international shipping, store commission, international tax rate, Alipay handling fee and profit.