Who are they, where did they come from and what are they doing?

We have some idea. We have scraps of information we’re piecing together from the few people who aren’t scared to offer them but we dont have everything. After-all, that’s all part of the mystery, isn’t it?

Let be clear before we start – This isn’t a sweeping shot at all businesses in these two areas. We purchase from and supply some fantastic businesses in both of these areas which is the case for the most part.  What it is, is the start of an internal industry investigation spanning close to a dozen other businesses into counterfeiting of the products we supply, the safety of past, present and future customers, and an overall look at what damages an industry, through the eyes and experiences of those who operate in it.

Welcome then, to part two of “Things that upset Ben”

Why the “The Birmingham and/or Manchester boys”?

No idea. This is just what most refer to them as. Whenever they’re mentioned, this seems to be the common nomenclature. Its not just these two locations though. Bolton and a few others are fast moving up the ranks but the first two are the most common.

Who are they?

Wholesalers, mostly. Down little alleyways, in basements, houses, market stalls, secret underground shopping malls. These aren’t your average stand up business with flashy websites and a huge online following of happy customers. Often you have to know who to ask, where and when. They only supply a small number of people who then filter the products outward. They import almost anything from home-wares to consumer electronics, cosmetics to furniture. Anything that China produces and they can make money from. There’s nothing wrong with that though. You could argue that for the most part, everyone in the vape/e-cigarette industry is doing the same thing, us included.

So whats the problem?

Counterfeiting. VAT fraud (see my previous blog post) and according to some their activities even extend to organised crime like money laundering and drug trafficking. We cant comment on the last two and I’ve no interest or time to go digging into it. But we can look at the first two because they’re both directly relevant to and impacting everyone who operates in this industry.

What do we have?

We have some names; personal and business. We have some inside information on the way they conduct their business and who with, where and when. You name it, its happening. So lets just look at the two things above.

First up, counterfeiting.

Its covers everything but we’re focusing on cells here. We’re sent dozens of cells for testing in addition to the database of information we’ve accumulated from test orders with businesses across the UK who’ve been highlighted as potentially selling counterfeit cells. At the moment we cant supply the information we’ve gathered because it would damage current investigations but we work closely with authorities and any useful information is passed on. This includes the products themselves, the results of our tests and any other supporting information/documents.

Its not difficult to understand the “why”. Its easy to compete in a highly competitive industry if you’re selling a product at 20% less that everyone else. You can buy Sony VTC5A wholesale in the UK for circa £3, or Samsung 25R for around £1.50 and of course, there’s no VAT. At the time of writing, you cant get legitimate Sony VTC5A cells that cheap. Likewise, £1.50 for a Samsung 25R is considerably less than what even we pay and we can turn over upwards of 30-40,000 of them each month when supply is good. Why are they so cheap? Because the VTC5A were old stock VTC4, and the Samsung 25R we’re actually almost identical in performance to a 26F and you get what you pay for. Counterfeits.

Throwing the big “V”.

Value. Added. TAX. Value? Debatable. Added? Always. Tax. We’re (mostly) all used to that aren’t we? We all hate it for different reasons but you have to pay it or you go to prison. Some have even spent some time being looked after at Her Majesty’s Pleasure that ironically, they didn’t pay for. If you know the right names to Google you can even view the local newspaper articles online. But if you set up the business in a family members name and go right back to what you were doing, that’s all good right? (/sarcasm)

Another way of grabbing business and extra profit is not charging or paying VAT, or worse, charging it to appear legitimate when not actually VAT registered. VAT law in the UK can be complicated in areas but there are plenty of ways it can be quickly and easily set up and any business accountant can walk you through it with ease. The government says “Tax doesnt have to be taxing”, and it really isn’t. Its as easy to bend as it is to comply.

So how are they doing it? (This is not a how to guide!) – Some are very un-creative. They just dont charge VAT despite being well over the threshold at which they should and when HMRC come knocking, they close the business. Some take advantage of the “Flat rate” VAT scheme whereby they pay a far lower rate of VAT but in return, cant reclaim VAT on purchases and when they hit the threshold where they should convert to full rate (20%) VAT,  they close the business and open under a different name. This was easier before the GDPR. They can no longer transfer customer data meaning they lose everything. (that said, if they’ll skirt VAT, i cant see them complying with that either).

Then there’s the really creative ones. They take a bit of skill and some foreign help. What if i told you its possible (with the right connections), to import a container of stuff, pay the VAT and import duty, empty it, put all the boxes back (along with some junk to make weight) and then ship it back as “goods not required” or “Faulty”, have it signed for the other side, then claim the VAT amount back? I honestly nearly fell off my chair and almost sent my mouthful of coffee into the face of my contact when i heard that for the first time. This is actually happening, in our industry, probably as i write. I didn’t even know what to say!

 

Crazy isn’t it? The lengths people will go to just to get one up on a competitor and one over on their customers. Instead of focusing on top quality customer service, keeping ahead of trends and having the right products at the right time and enjoying the healthy competition it creates, they just take a giant metaphorical crap all over our industry in the name of a few extra quid while putting all of our safety and livelihoods on the line.

If you have any information on the source of counterfeit cells, please let us know in complete confidence in an email to hello@18650.uk We keep records of which cells turn up where in order to trace them backwards. If you have any information about VAT or any other type of business fraud, you can report it completely anonymously here – www.gov.uk/report-vat-fraud

That’s all, for now… Let us know what you think below!

Ben – Sales Director

18650 UK

 

 

 

 

 

 

 

No really, it is..

What am i talking about?

“Do u do cash deals?”. “Can i not pay the VAT?”. “Can i just like maybe send it to ur personal PayPal or bank or summink”?

The first time it happened about a year ago, it was quite funny. I’ve never had it in any other industry before and of all the verticals we supply, its only ever the vape industry that ask these questions. Businesses more than end users mostly. With the frequency of occurrences hitting monthly and occasionally weekly now, i think its time to address it.

Firstly, its both completely immoral but also obviously (you would think..) ILLEGAL

We are a full rate VAT registered business. We pay VAT, we charge VAT. Its that simple. Operating small to medium businesses in the UK has only got more tricky over the last decade and why should anyone get a leg up in this way? If we’re not all playing the same game by the same rules, no-one can actually win and lets be honest, if you’re going to attempt commit fraud (which is exactly what it is) we dont want to be a part of it, and its probably best not to do it against the Government. They do make the rules after-all…

It makes a mockery of the industry.

Why are we only seeing this from businesses in the vape industry? I’m sure it happens in many other industries, but this is our experience. The vape/e-cigarette industry is experiencing one of the fastest growth rates of any industry in the UK and as a result, competition is fierce. Is that an excuse to break the law to beat the shop down the road, or the online business you think is taking your customers? Surely not?! For an industry that got away with so much before the introduction of the TPD and is still enjoying a lot more freedom than our friends are getting from the FDA in the USA, why bring unnecessary negative attention to an industry which is already being looked at for new taxation classes and regulation?

What can we all do about it? 

Not a lot really. We politely decline all requests to not pay VAT or put cash in our own PayPal accounts. Some will just accept it and order anyway, others never come back and some even get quite angry about it. People like this damage industries. By not paying their way like everyone else they are able to undercut law abiding businesses, driving a price war and racing to the bottom where in an already “pence margin” industry businesses will fold, everyone loses the game and while some lose everything else too, these people will just move on to destroy another industry. They’re here for the good time, not a long time. We might drink like that after some weeks, but we dont do business the same way!

If you’re reading this and this is how you operate; please don’t ask us do it. It”ll be awkward for the both of us.

Has this happened to you? How did you deal with it? Let us know below, on our Facebook page or drop us an email to hello@18650.UK

Stay tuned for my next blog of “Things that upset Ben – The mythical Birmingham and Manchester boys”

Ben – Sales Director

18650UK

 

You might remember that we recently ran a poll to tackle some of the questions we would love to ask every customer who uses the site but unfortunately, its just not possible.

That said, we had a fantastic response from customers and non-customers both on the survey and via email and i thought it might be interesting to share our thought process behind the questions and some of the results with the public.

Some of the questions are irrelevant to anyone but us so if you filled in the survey (thank you to all 1500+ of you, we hoped you enjoyed the little surprise at the end!) and you’re wondering why some of the questions aren’t here, that’s why!

So. Question time. Its worth noting that this poll was completely anonymous, so we can only base opinions on the answers given…

First up, we asked where people had heard of us. We had a feeling that Facebook was probably the biggest driver of traffic for us. We were right, with 61% of you joining us from our Facebook page (www.facebook.com/18650UK) Almost 20% of you had come from Planet of the Vapes (www.planetofthevapes.co.uk) which is nice to see given the Facebook age is slowing killing forums which before big socials, were the primary source of information on just about anything!

How many cells people buy at a time is difficult to track in our software, so we thought this was relevant. Mostly so we can tailor our offers to customers. The 2-5 bracket took the win as you can see below

Question 4 tackled the long running debate between the LG HG2, Sony VTC6 and Samsung 30Q, given how similar these cells are. We dropped the ball on this one, not providing a “not applicable” option for those who dont use them. This may have skewed the results as it was a mandatory question but the results were interesting. (Personally, i like the colour green..)

Next we looked specifically at customers who purchase cells for vaping. We were keen to see what devices people were using the cells for and the results confirmed what we expected. Most people are regulated device users, with another chunk who use regulated primarily with a dabble in mechanical, me included.

Immediately following this, we asked vapers which was more important to them; Capacity (mAh) or discharge rate (Amps). The results were close, with a slight preference on capacity. I have to admit, i was a little disheartened to see this result. Not having to faff about swapping batteries out or carrying them would be fantastic, but when you’re placing a device next to your face, i really hoped to see more people pick the safety option of discharge rate over the convenience of capacity here.

Question 8 covered another debated subject. Who is the biggest charger manufacturer? This one did surprise me. I gave 4 options based on the largest numbers of them on other mediums (eBay, Amazon, etc. Unfortunately a hotbed for low priced counterfeits). Nitecore, XTAR, Efest (LUC) or “Another brand not listed”. Nitecore have been around a long time and despite the number of conspiracies and counterfeits that have trickled through over the years they came out on top, by a considerable margin. Personally, i prefer XTAR but purely on aesthetics, and because my VP4 Plus Dragon has an internal resistance check function that i dont need to leave my desk to use. Both are fantastic devices and deserve their share of the market but given the number of XTAR chargers sold by our closest competitor, the result was a pleasant surprise. Equally, the number of “others” taking only 4% i think really shows who the top players are here in the UK

The next constantly contested subject, the peoples favourite OEM cell manufacturer. We kept this simple, a shootout between Sony, Samsung and LG. This is one of a few questions i want to explore a little deeper in the future to see if its performance, price or a bit of both but the results are clear. With very little new development in cells usable in vaping from LG lately, Sony and Samsung are leading the way with new options in the form the VTC6A and VTC5D, and the 20S, 24S, 25S, 30T and 40T from Samsung.

With the rise of Chinese re-brand companies, we wanted to get peoples thoughts on the best of them. Vapcell, with their recent ability to source strong, new to the market cells and rate them in line with their true performance has given them the edge over their competitors. Hopefully, we’ll be seeing all businesses who re-wrap OEM cells do the same. Afterall, at the very least i morally wrong to sell someone something that doesn’t perform like it says on the tin. At the very worst, its unbelievably dangerous.

Whats this has shown us however, is that we missed something big here. Almost as many people who picked Vapcell, picked someone not listed. This is another question we have clear reason to revisit at some point. Was everyone voting that option for one company, or lots? We need to know!

Our full compliance with UK and EU legislation is what sets us apart from our competitors. Out of the literally hundreds of companies in the UK selling these cells, we are one of only 3 companies who are fully EU/UK legislation compliant. Unless you are buying cells from us or the two others (or a business we supply to as a wholesale customer), you are buying products that shouldn’t be on the market. We asked how much this matters to our customers. We’ll let the results do the talking here.

Before this next question, we asked where people got their cells from before using 18650 UK. The winner was the same, and its unsurprising. One of the only other compliant companies in the UK with a fantastic following and a business we have a great relationship with so it was great to see them come out on top with our customers who needed something we didn’t have at the time they needed it. We work hard to keep our stock level higher than demand but just with your favourite supermarket, occasionally we get caught short and its good to see that for the most part, if we dont have something you’re looking toward the only two other compliant businesses in the UK.

 

You might notice I’ve removed two company names from the above list. At 18650 UK we love competition, but not with companies who aren’t interested in playing the game by the same rules and for this reason, I’m not able to show their name here.

Those buying from “Another UK based business”, could well be vape shops or online stores we or our compliant competitors supply to. They could however, be other UK competitors who aren’t compliant. Its impossible to tell unfortunately.

Those buying from Alibaba, Aliexpress and similar – almost guaranteed non-compliant product and another hotbed for counterfeit cells. If you’re reading this. Please. Don’t risk it. It’s not worth the potential harm to your wallet or health.

Lastly, if you want to help stamp out counterfeit and poor quality cells,  unsafe stated battery ratings and contribute to the wealth of testing data and information aimed at making vaping safer, please take a moment to look at the following page from Mooch – Mooch’s Patreon Page

If you haven’t heard of him, Mooch has a background in the very same work he has tirelessly carried out for the vaping industry for little to no return for many years, despite investing tens of thousands of dollars in equipment. For many, he is the first source of information on selecting the right cell for their purpose and his work in the industry from testing hundreds of cells and devices to actively hounding Chinese manufacturers has contributed to a huge number of industry changes.

He’s keen to quit his day job and work for you, full time. A couple of dollars/pounds a month makes a big difference. If everyone we’ve ever supplied to pledged just £2, we alone could probably keep him charged for a whole year!

What do you think? Couple of surprises? Us too! Let us know what you think on our Facebook page or drop us a line – hello@18650.UK.

Thanks again to everyone who got involved. Its been… interesting..!

Ben.

Sales Director – 18650UK