[access-uk] Re: THE OLD CHESTNUT OF FREEDOM'S US AND UK PRICES
- From: Glenn Tookey <Glenn.Tookey@xxxxxxxxxxxxxxxxxxx>
- To: "access-uk@xxxxxxxxxxxxx" <access-uk@xxxxxxxxxxxxx>
- Date: Sun, 29 Aug 2010 15:28:06 +0000
So, taking up George's commentary, now the goods are in the Reseller's
warehouse in the UK.
Now have to allow for warranty and repairs (if we return goods to US we have to
pay the shipping) - however good a product some of them need after sales
attention and service.
Many AT products- especially new ones - have to be taken to the potential
customer which means taking them to exhibition (pay staff, pay for vehicle, pay
for travel costs, pay for insurance etc) and / or take the goods to a home
demonstration. Software is still shipped in boxes as customers still want the
media. The cost of taking a product on the road to demo is significant.
For software we also provide free helpdesk support, sometimes that means hours
on the phone for one specific problem.
When you look at the UK price for a product you will find that it is not too
far out from the US price, the exception for us at Sight and Sound is the
Pearl, which started this thread.
The reason why that product varies so significantly is that because it is
heavily discounted in the US then reseller discounts are approximately 50% of
normal discount (and the gross price is halved in the offer, so net profit to
pay all of the costs outlined in the thread is much lower) - hence the
difference between US and UK price of the Pearl.
Regards
Glenn
-----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
______________________________________________________________________
This email has been scanned by the MessageLabs Email Security System.
For more information please visit http://www.messagelabs.com/email
______________________________________________________________________
______________________________________________________________________
This email has been scanned by the MessageLabs Email Security System.
For more information please visit http://www.messagelabs.com/email
______________________________________________________________________
** 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:
