yes they charge VAT. and is exactly why i never used their service (and why i left eSellerate too) – those companies act as the retailer of the product instead of you – this is nice because they’re responsible for paying appropriate taxes – then they pay you a royalty of that sale – like a book author gets from a publishing house – the “fee” they charge is just a reduction in the royalty they pay. it’s a very nice system because it removes all of the complications of selling.
but it’s also a double-negative: not only do you have to pay a larger percentage on the sale than paypal, but you also cannot deduct it as a business expense – since it’s not an expense but just the agreed upon royalty for the sale.
by managing paypal myself i get a much lower fee and can deduct it from my taxes at the end of the year – further reducing the effective cost.
A higher revenue minus expense fee is, from accounting point of view, the same as a lower revenue without expenses.
Of course the resellers fee is higher than the PayPal only fee. But again, you are not able to compare a resellers fee with the PayPal only fee, as you are getting more service from the reseller.
however that was not my experience when i used a similar service (eSellerate). in that case the sales were significantly lower – i guess due to price-elasticity and a higher sticker in some key markets (Germany <3 Stacks!!! yeah!!!) due to VAT.
when i switched i saw an immediate increase in sales (~20%???), a 6.5% decrease in fees, and a tax write-off of 3.3%.
it’s like getting a free macbook every month!
no joke: it’s the single best business decision i’ve ever made. like the exact opposite of Stacks Cloud.
Don’t get me wrong. We small business also think that these new digital goods VAT rules are to complicated. I would love to have the same rules than before 2015, where I only had to pay the local (German) tax. These new rules make everything more complicated for us, and therefore, we have to use Paddle and co to make our lives easier.
The good thing is, Amazon, Apple etc. have to pay tax now
And of course we are jealous that you are sitting in the US, where our tax officers are not able to reach you, so that you are able to get more out of your money
Therefore I like having a lot of non - EU customers, because FastSpring doesn’t have to collect tax from them. Lucky, these are more than 50% of all customers
I’m considering a switch from Cartloom to Paddle… or did. I’m not there yet – but I’m in the middle of a redesign of my entire site, so… it would be nice get a hold on the cart solution at the same time.
Paddle… as kind of a reseller… handles vat for users.
That’s a huge benefit.
The check-out overlay looks nice.
Paddle has some nice featurs if you’re an app developer.
BUT… the product overview is dumb! Products are listed in the order you’ve entered it. You can’t sort it in anyway – by product, category or price. You cant search. You can’t see the prices you’ve entered, yout can’t see the discount you offer… unless you click every software product you sell or offer for free. You have to click every single product. That’s not problem if you only have say 3-5-10 products. If you have 60-80-100-200… it’s a problem.
Unless you – as one of the other developers mentioned – maintain a seperate spreadsheet with all your products, prices, download links… really shouldn’t be needed if you ask me!
Cartloom – on the other hand – offers a great overview… with all the features mentioned above, that Paddle lacks. Except one… Cartloom doesn’t handle or pay your vat. But sums up your vat…
Another difference between Paddle and Cartloom… Paddle sends you an e-mail when you purchase a product. You check your e-mail, click the link and download the software.
Cartloom does the same, send you an e-mail with the download link but also – after purchase – sends you to a page where you can download your purchased software as soon as the purchase has gone through = aprox 30-60 seconds… as a user – it’s nice – as a user – being able to download your software the monent you purchased it and want or need the addon to get on with your work – without waiting for an e-mail to go through… e-mails are often slooooooooooow – especially if your in the middle of creating something…
I’m sure Paddle will get a hold on the short commings… someday and hopefully soon – but for now… as a potential switcher – it’s a no-go. Paddle lacks some important features you’d expect from your cart solution.
