Source 40 or 50 Sofas Directly

MrAA

Hi,

I have some questions on product sourcing, imports & VAT threshold.

I would greatly appreciate any insight as in to how I could source (Sofas) cancelled Orders, End of Line Stock, Sample Stock, Liquidation Stock and Ex-Showroom Display Models & Customer Returns from High Street Retailers directly either in the Ireland or UK.

I have contacted DFS for example multiple times but no Detail but I have seen UK counterparts implement this with direct sourcing of Stocks from High Street retailers.

I could source what I am looking for in the UK, there is Auction house's with the stock I have in mind.

However my understanding is you could be paying VAT twice? Provided you are VAT registered here in Ireland & importing from the UK also appears to be strenuous.

I have noted there may not be new customs charges if the product is manufactured in the UK & employing Customs agent appears to be the only solution for paperwork on imports.

Some Detail on me I would not be VAT registered, I would be buying 40 or 50 sofas at a time (Trailer Load ) rinse and repeat until I reach €85000 in Revenue which I believe is VAT threshold.

Any insights.

Thanks

antoinolachtnai

You shouldn't be paying UK VAT if the stuff is being exported to Ireland. You are probably going to have to engage a professional to advise you on how best to import product from outside the EU. I would anticipate import problems with this UK stock, because the stock you are buying will not have been made in the United Kingdom and so duty will apply (even though duty may already have been paid when this stock was imported into the United Kingdom previously).

I don't know how you are going to be able to formulate a plan to make enough gross margin at this to pay a salary, rent and utilities with such a low turnover.

Mick Tator

Any insights?

Yes, lots.

You are looking at the wrong problem. Questions on VAT, import taxes, etc., are a distraction. The real question is the viability of the business plan, which has zero hope of success based on what you've written.

You are talking about selling second-hand furniture. No debate on this, it is customer returns, ex-showroom stock, cancelled orders, whatever. It’s stuff that either did not sell or people did not want.

Most people don’t buy sofas, they buy a sofa with two armchairs. Go to a few auctions and see the prices achieved for sofas, armchairs, etc. Ask any of the auctioneers about taking in your stock to sell. (That’s the logical way of operating, saves you warehousing and ancillary costs.)  If they are honest, they will politely tell you that there is no demand and to go away.

You also need to study the Irish furniture retail sector, which has been a dog for years for several reasons. Irish retailers thought they would be smart and buy direct, more cheaply, from overseas and ignore local manufacturers. Seemed like a good idea at the time, but they ignored several downside risks – (i) Pay up front, so huge pressure on cashflow; (ii) delivery periods for special orders– longer than usual, buyers were unhappy to pay a big chunk upfront to retailers (iii) transport costs – they have been increasing considerably for years; (iv) discounts. When a range did not sell the retailer was stuck with it, the supplier did not care, he had his cash. With an Irish manufacturer/supplier his sales rep had to pass the stock on every visit to the retailer and it was the norm for the supplier to give a credit note to reduce the invoice, clear the stock and get a new order. Can't do that with an overseas supplier.

You need to do homework on the 'customer demand' part of the business plan first and forget about VAT and Duties until you get that done.

https://www.boards.ie/discussion/2058287064/source-40-or-50-sofas-directly

RUDOLF289

https://www.boards.ie/discussion/comment/120360959#Comment_120360959

Just to clarify, most furniture items imported into the EU (including Ireland) are zero rated for Duty regardless of origin. So even furniture that has been imported into the UK and shipped onwards to Ireland has a zero rate of Duty, eventhough it has not been manufactured in the UK (The Free Trade Agreement does not cme in to play when there is no duty payable regardless of origin). In terms of VAT, in principle, subject to agreement of the seller in the UK, VAT on exports from the UK to Ireland should be zero rated. However, that means the seller would need to arrange Export Customs Clearance to be sure the goods were shipped from the UK.

In terms of VAT in Ireland, yes, you would be liable for VAT over the cost of the product plus the transport costs from the UK to Ireland.

Feel free to post again or DM me if you need any further information

Cheers,

Rudolf289