[access-uk] Re: THE OLD CHESTNUT OF FREEDOM'S US AND UK PRICES
- From: Gordon Keen <gordonkeen@xxxxxxxxxxxxxx>
- To: access-uk@xxxxxxxxxxxxx
- Date: Fri, 27 Aug 2010 12:09:40 +0100
Hi George
While I go along with some of what you say do U.S. resalers not have transport
costs if not in excess of that incurred by U.K. retailers then at least equal
to them?
Surely a company in say Alaska selling goods from, um, Florida have the same
costs to pay.
As I understand the U.S. federal system duty has also to be paid when goods
move from state to state and each state may vary said duties which must
complicate matters for them as well.
lastly why are virtual goods charged at the same rate when sending software by
email or download from an ftp site that incurs no transport costs at all?
I would love someone to explain these anomalies to me.
BTW when I worked for Export credit guarantee department of the D.t. & I (gawd
knows what they call it now!) British exporters and importers often bought
forward foreign currencies at favourable rates from the banks helping to smooth
out fluctuations, does this not happen now?
Regards
G
From glorious Devon, England.
On 27 Aug 2010, at 11:47, George Bell wrote:
> 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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