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

George, That's very interesting, as although I knew about the exchange rate
and bank stuff, I hadn't fully appreciated all of the other costs involved.


Do you have any thoughts on why most distributors seem to charge the same
price, with very little flexibility?  Presumably resellers are free to set
their own prices, and are given a recommended price by the manufacturer?

Thanks for that interesting insight into the situation from a supplier's
point of view.


Richard Godfrey-McKay

Telephone: 01738-445 880

Mobile: 07791 452 593

 


-----Original Message-----
From: access-uk@xxxxxxxxxxxxx [mailto:access-uk@xxxxxxxxxxxxx] On Behalf Of
George Bell
Sent: 27 August 2010 11:47
To: access-uk@xxxxxxxxxxxxx
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

** To leave the list, click on the immediately-following link:-
** [mailto:access-uk-request@xxxxxxxxxxxxx?subject=unsubscribe]
** If this link doesn't work then send a message to:
** access-uk-request@xxxxxxxxxxxxx
** and in the Subject line type
** unsubscribe
** For other list commands such as vacation mode, click on the
** immediately-following link:-
** [mailto:access-uk-request@xxxxxxxxxxxxx?subject=faq]
** or send a message, to
** access-uk-request@xxxxxxxxxxxxx with the Subject:- faq


__________ NOD32 5400 (20100826) Information __________

This message was checked by NOD32 antivirus system.
http://www.eset.com


** To leave the list, click on the immediately-following link:-
** [mailto:access-uk-request@xxxxxxxxxxxxx?subject=unsubscribe]
** If this link doesn't work then send a message to:
** access-uk-request@xxxxxxxxxxxxx
** and in the Subject line type
** unsubscribe
** For other list commands such as vacation mode, click on the
** immediately-following link:-
** [mailto:access-uk-request@xxxxxxxxxxxxx?subject=faq]
** or send a message, to
** access-uk-request@xxxxxxxxxxxxx with the Subject:- faq

Other related posts: