Happy New Year’s Eve, all!
I’m just popping my head up from a holiday daze to post a quick note about this whole #VATmess business.
Others have done a much better job of explaining the issues and available solutions, so I won’t go into detail here, but do check out these links for more if you’re interested:
- Ravelry’s overview
- LoveKnitting’s overview
- Ysolda Teague’s wonderfully thorough explanation
- Louise Zass-Bangham (Inspiration Knits)’ multi-part explanation: one, two, three, four
- Hunter Hammersen (Violently Domestic)’s frank explanation
I’ve decided to go with the Ravelry/LoveKnitting solution, at least for the time being. I’ve added my for-sale patterns to the LoveKnitting site, and they’ve just been approved (though I have some editing/tagging to do on their site). Here’s what this means for any EU customers:
- Buy your patterns now, in the remaining few hours of 2014, to take advantage of the current pricing and lack of VAT!
- As of Jan. 1st anyone from the EU who purchases my patterns through Ravelry will be automatically directed to use the LoveKnitting checkout (which will handle the VAT requirements).
- Thanks to the partnership between Ravelry and LoveKnitting, any patterns you purchase in this way will still be added to your Ravelry library!
- Prices WILL change, at least for EU customers, unfortunately.
- Right off the bat, EU customers will have to pay their own country’s VAT, on top of the base price of a given pattern.
- I’m not changing my pricing significantly at this point (LoveKnitting has converted the Canadian pricing I use on Ravelry to GBP, so there may be a tiny difference based on their conversion rate), but I’m going to have to look at my sales figures over the next 6 months to figure out what’s reasonable. I will post here with advance warning if/when I do change my pricing!
- LoveKnitting is offering their service free for 6 months, but once that period is up, their service will be more costly for me, as a designer, than Ravelry is. On every sale, LoveKnitting will keep a 20% + £o.25 commission, which they take out of the overall cost of the pattern. (The VAT will be added on top of the base price, but the commission fees come out of the base price, so buyers won’t see that broken out separately.) That’s a substantial bite out of a pattern sale, from a designer’s perspective!
- Furthermore, LoveKnitting will only process payments to designers once the net they owe us (sales minus commission) is over £20 — so if I only sell a few patterns in a month, they hold my earnings until the next month, or the next, or the next, whenever I clear that minimum. I know that this is done to save on transfer fees, and it does make sense from that perspective. Still, Ravelry has only been showing me purchasers’ country information since the start of November, so I don’t have a lot of data to work with, but at this point only about 2% of my sales since then have come from the EU. In other words, I’m not liable to get payment from LoveKnitting very often, as I’ll have to wait several months for sales to accrue between payments! That’s a new twist on my cost of doing business as a designer, and something I’ll need to reflect on more.
- On one hand, if my EU sales are such a tiny fragment of my overall sales, it means that maybe I can afford to take the hit of the LoveKnitting commission, without increasing my prices, since it will have a smaller effect on my bottom line — but on the other hand, having a slice of my sales revenue stuck in limbo for months at a time is a new challenge. (I’m glad, at this moment, that designing is not my main source of income…)
- Unfortunately, any sales/promotions/coupon codes offered through Ravelry will not carry over to the LoveKnitting site. (This is new information, to me at least, so I don’t know if there will be workarounds offered…)
I am very grateful to Ravelry and LoveKnitting for coming up with a solution so quickly and for making it so seamless for designers like myself.
However, you might detect a hint of frustration in my tone, and you’d be right. I am frustrated! I’m frustrated at the EU lawmakers’ lack of forethought about how this affects microbusinesses. I’m frustrated that I have to charge some of my customers more than others, for an identical product. I’m frustrated at some of the clunkiness of the LoveKnitting website (and my own inexperience with their platform) that’s making it tricky to figure out what I’m doing there. (Right now, I can’t even find a way to link to all of my designs in their store, even though they’ve had me set up a designer profile…!)
Anyway. I’m sorry, EU customers, that you have to deal with this new frustration. And I’m sorry, non-EU readers, that you’ve just had to sit through my rant!
To thank you for bearing with me, I’ll leave you with a happier mental image: Nike demanding belly rubs!