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  1. Home
  2. Knowledge Base
  3. 3. Pricing, Profit & Business Basics
  4. How Pricing, VAT and Delivery Work on GBFM
  1. Home
  2. Knowledge Base
  3. 5. Payments, Fees & VAT
  4. How Pricing, VAT and Delivery Work on GBFM

How Pricing, VAT and Delivery Work on GBFM

Introduction

GBFM works differently from most online marketplaces.
To keep things simple, transparent and fair for both sellers and customers, all delivery costs are, and should be, included within your product price. Customers never see separate shipping fees, and sellers never need to configure delivery settings.

This article explains:

  • how to price your products correctly
  • how VAT applies when delivery is included
  • what GBFM expects from sellers
  • why we use this model
  • how to avoid the most common pricing mistakes

If you are unsure about how to set your prices, handle VAT or manage delivery costs, this guide will walk you through everything step by step.


Why GBFM Uses Delivery-Included Pricing

Delivery-included pricing is one of our core principles. Here’s why:

1. Simplicity builds trust

Customers see one clear price. No surprises. No hidden fees.

2. Sellers don’t deal with shipping settings

You don’t need to configure shipping methods, zones or classes.
You simply price your product properly and we handle the rest.

3. It removes a huge source of errors

Multi-vendor shipping is complicated and often breaks checkout or creates unfair costs. Delivery-included pricing avoids all of it. (Remember the issues eBay had with shipping prices being extreme some years ago.)

4. It keeps you profitable

You can recover your packaging and postage costs directly in your product price.

5. It allows bulk-order savings

If a buyer orders multiple items, you can price in small savings as you only ship once. ( See multibuy shipping discount bands below)

6. It aligns with GBFM values

Fair, honest, transparent pricing.
No tricks. No fake discounts. No surprise charges.


Multibuy Shipping Discount bands

Royal Mail Discount Bands

We are aware that adding shipping into the product price can feel scary and that it might feel like it puts people off buying. If a customer buys products from multiple sellers in one basket and sees multiple delivery charges at checkout, this really does put more buyers off.

With this in mind, GBFM offers four Royal Mail aligned discount Bands. These are optional categories you can assign to your products to have GBFM’s automatic multi-buy shipping discounts apply.

Don’t forget to apply your normal categories as well to ensure your products appear in the menu and search system.

These categories are internally only to allow the discount logic to apply correctly. You only need to pick one that matches closest to your requirements. If you pick multiple by mistake, they will apply in this order: Chilled/Frozen -> Age Verified -> Tracked Parcel -> Large Letter.

If you do not assign a discount band, your product will sell normally without any multi-buy discounts applied.

The four Royal Mail Discount Bands are:
  1. Royal Mail Large Letter / Untracked
    For small, flat, lightweight items.
  2. Royal Mail Tracked Parcel – Standard
    For most parcels up to 10 kg.
  3. Royal Mail Age-Verified Delivery 18+
    For alcohol, blades, tobacco products or any item requiring legally verified delivery.
  4. Royal Mail Chilled / Frozen 24h
    For perishable items that must remain chilled or frozen during delivery.

When you should choose a Royal Mail Discount Band

Choose a band if:

  • You want GBFM’s automatic multi-item discount to apply
  • You want your customers to get better pricing when they buy multiples
  • You want your product aligned with Royal Mail typical costs

You do not need to choose a band if:

  • You do not want multi-buy discounts
  • You use your own courier or local delivery
  • Your product doesn’t fit these delivery methods

Bulk Discounts Applied by Each Band

Each Royal Mail Discount Band applies bulk-buy savings automatically at checkout, and they are designed to fairly reduce the price for the customer, encourage multiple purchases of products, and also take into account the cost of postage and packaging. They are based on the costs of shipping provided here:

https://www.royalmail.com/sites/royalmail.com/files/2025-09/online-price-guide-october-2025-v2-ta.pdf

Discount Band (Large Letter / Untracked)

  • Buy 1: no discount
  • Buy 2: £1 off per unit
  • Buy 3+: £2 off per unit

Discount Band (All others)

These three bands currently share the same discount structure:

  • Buy 1: no discount
  • Buy 2: £1.50 off per unit
  • Buy 3+: £3 off per unit

Need a different discount band?

If your product needs a new discount structure or a delivery model that doesn’t fit these, just contact us and we’ll discuss adding a new Discount Band for that shipping provider and service.


How Pricing Works on GBFM

1. Your product price must include:

  • cost of materials and ingredients
  • your time
  • packaging
  • postage/delivery costs
  • marketplace commission
  • VAT (if applicable)
  • a small margin for growth

Use delivery-included pricing like this formula:

Total Price = Your Costs + Packaging + Delivery + Profit Margin + VAT (if applicable)


2. Example Pricing Calculation

Let’s say you sell handmade candles:

Cost ItemExample Amount
Materials£4.00
Packaging£1.50
Delivery (2nd Class)£3.29
Profit Margin£4.50
VAT (Zero-rated example)£0.00
Total Price£13.29 → Round to £13.30 or £13.50

If your item is VAT-standard rated (e.g. bath products), VAT sits inside the final price.

Delivery does not appear as a separate line. It is already included.


How VAT Works on GBFM

Because delivery is baked into the product price:

1. VAT follows the product setting

  • Zero-rated products → VAT = 0%
  • Standard-rated products → VAT included at 20%
  • Reduced-rate items → VAT included at the reduced rate

2. Delivery does NOT affect VAT

Normally, shipping can complicate VAT because it must match the VAT rate of the items in the order.

But because GBFM has no separate shipping line, VAT is simply:

VAT = VAT rate of the product

3. VAT-registered sellers must still:

  • include VAT within the product price
  • display prices VAT-inclusive
  • declare VAT correctly in their returns

4. Non-VAT-registered sellers

You do not need to do anything special other than specify there is no VAT in your products:


Just price your products to cover your costs.


How Delivery Works on GBFM

1. Customers see one delivery method only

Nationwide UK delivery is included and shown on the

  • basket
  • checkout
  • order confirmation

2. Sellers do NOT set up delivery

You don’t need to choose:

  • courier services
  • shipping zones
  • classes
  • weights
  • rates

GBFM handles delivery as a platform-level feature.

3. What sellers must do

Include delivery costs in the product price

This means:

  • postage
  • packaging
  • labels
  • cold packs (if needed)
  • protective packaging

Use sensible, reliable delivery services

We recommend:

  • Royal Mail Tracked
  • Evri (where appropriate)
  • DPD Local (for heavier parcels)

Dispatch orders on time

Most sellers ship within 1–3 business days.

4. UK-only orders

GBFM currently delivers within the United Kingdom only.
You don’t need to worry about export rules, customs, or international shipping.


How to Set Your Prices Step by Step

Step 1: Calculate your total cost

Add up:

  • materials
  • consumables
  • packaging
  • delivery
  • your time

Step 2: Add your profit margin

Add what you need to earn per item to make it worthwhile.

Step 3: Add VAT if you are VAT-registered

VAT is included inside your final displayed price.

Step 4: Round the price

Customers respond well to round numbers:

  • £8
  • £10
  • £12.50
  • £15

Step 5: sanity-check profitability

Ask:

  • Am I making enough per product?
  • Does this fairly cover delivery?
  • Will I still profit on larger orders?

Common Pricing Mistakes to Avoid

Underpricing delivery

Don’t guess postage. Check real courier rates.

Forgetting packaging

Boxes, wrap, tape and postage labels all cost money.

Not considering time

Your time has value — include it.

Pricing too low to “be competitive”

Cheap prices often lead to burnout or loss. GBFM values fair pricing.

Overcomplicating your price

Round numbers sell better and reduce customer hesitation.


FAQs

What if my product is expensive to ship?

Increase your product price to reflect real delivery costs.

What if I sell multiple items in one order?

Your delivery cost per item falls, which increases your margin. You may choose to price accordingly.

What if I’m VAT-registered?

Include VAT inside your product price as normal. Delivery does not change your VAT obligations.

What if I’m not VAT-registered?

Price your products to cover all your costs — you don’t need to add VAT.

Can I charge for delivery separately?

No. GBFM uses a delivery-included model for simplicity and fairness.


Checklist for Sellers

Before you list your product, make sure:

  • [ ] My product price includes delivery
  • [ ] I’ve checked my real packaging and postage costs
  • [ ] My price includes my time
  • [ ] My price includes my margin
  • [ ] If VAT-registered, my price includes VAT
  • [ ] My pricing feels fair and sustainable
  • [ ] I can dispatch within 1–3 business days

Summary

GBFM’s delivery-included model keeps things simple, honest and fair.
You don’t need to configure shipping. You simply need to:

  • price your products correctly
  • include all delivery and packaging costs
  • understand how VAT applies
  • dispatch orders reliably

This approach ensures that customers trust the price they see, and sellers stay profitable without unnecessary technical complications.

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