[access-uk] Re: THE OLD CHESTNUT OF FREEDOM'S US AND UK PRICES

George,
That is all alright, but why is the like of software more expensive, even if it is downloadable and the licence has to be purchased, such as JFW? Here we have no shipping; unless they ship the software over to the UK to make available on-line! lol! 

Regards,

Mike
----- Original Message ----- From: "George Bell" <george@xxxxxxxxxxxxxxxxxxx> 
To: <access-uk@xxxxxxxxxxxxx>
Sent: Friday, August 27, 2010 11:47 AM
Subject: [access-uk] Re: THE OLD CHESTNUT OF FREEDOM'S US AND UK PRICES
Commercial response here. I'm not making excuses for the industry's pricing here, but I do feel everyone should be aware of the facts and 
associated costs of importing products from abroad.
We've been importing equipment from many countries for over 25 years now, and so I feel that I can speak with some degree of first hand 
experience here.
First, there is a tendency on everyone's part (including mine) to price equipment based on the Exchange Rate we hear on the news. In the real world, this is purely an Interbank Rate based on transactions way, way and above the value of goods we are importing. So if the American Dollar shows at $1.55 to the £1, when we buy Dollars from our bank, the rate we get will be closer to $1.50. This will be obvious also to anyone who has bought goods from abroad on a credit card.
In addition, the banks make a flat charge on both sender and receiver of the funds. With our own bank, they charge us around £20 - £25 per transaction to send money abroad, and between £5 and £10 to receive 
money from abroad.
In the case of credit cards, the charge is usually a percentage of the whole, and with more and more people using credit cards, that's a further erosion of margin going to the banks, generally of around 3%, but it can be higher depending on the card type. Note that Debit cards are a different matter, and usually only attract a flat fee per 
transaction.

That explains part of the pure financial side.
But then the shipping guys, and Customs get in on the act. Shipping costs are generally based on a weight/volume calculation, but it doesn't end there. Initial freight cost is usually based ex-factory, so you have added shipping cost to the airport. That and the resultant airfreight are usually based on local currency, and again, 
the exchange rate factor comes into play.
Although we do not charge VAT when we sell the goods, we still have to pay VAT at point of import. And not only that, the VAT man wants the VAT actually paid as cleared/guaranteed funds. So rather than have to trundle up to the airport with cash or a certified bank cheque, most importers pay their freight importer a flat fee to deal with this - ours calls it, "Advance of Duty/VAT Fee", and in a recent import that 
was £15.
Well then Customs charge for "Customs clearance" - currently 
Birmingham for example, charge £31.
And to cap it all, the airlines also add a flat fee, and again at 
Birmingham, this was another £29.
Finally, unless you collect the goods yourself, you have to pay 
delivery from airport to your premises.
These are actual figure I have taken from the import of one single braille embosser earlier this month. The theoretical air freight cost from the States to Birmingham was $163.10 which at $1.50 came to 
£108.73.
When the goods actually arrived here at my office, I had to pay a 
total of £638.12.
We then have to check that the goods are working properly and tested, 
before finally shipping out to the customer.
Clearly a major element here is VAT, but it will be into October before our next VAT Return will allow us to reclaim the VAT.
As I said at the start, I'm not making excuses for excessive pricing, 
but do feel some explanation is necessary.

George Bell
Managing Director
Techno-Vision Systems Ltd
76 Bunting Road Ind. Est.
NORTHAMPTON, NN2 6EE, UK.
Tel: (01604) 792777
Fax: (01604) 792726
mailto:george@xxxxxxxxxxxxxxxxxxx
web: http://www.techno-vision.co.uk
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