Quote:
Originally Posted by |Fred /img/forum/go_quote.gif
you stated:
-taxe : VAT, headphone taxe 2%
-inport fees
-shipping (from us to wholesaler => wholesaler=> dealer)
you forgot:
-> service fees (the wholesaler take care of the falty unit)
-> distribution fee (it a job to distribute a product)
-> provision to take into account the fluctuation of the fluctuation of the exchange rate in your pricing.
-> relative cost to run a business
|
Apologies, I did mean to reply to this post but it slipped past me!
Again, yes, I can see now that I wasn't being considerate enough to the retailer in such circumstances of import from another country/continent, and this case in particular. I was a bit blinkered in my reaction to such a high price tag, particulary after it had originally been posted up before stock arrived in their store at a significantly lower figure (this was neither labelled as a preliminary anticipation nor was the sudden price hike explained and justified when they updated the price of this item; they didn't help themselves by not reasoning this development).
I let my suspicions of being robbed and exploited, due the marketplace in which I inhabit, take over and did not reason out all the costs or potential costs to the retailer in such circumstances to obtain said product; not an exuse, but this has probably built up over numerous times and cases and examples whereby we, in Europe and the UK, pay more, and this item being so long-awaited and anticipated and then well recieved, I was just angered, as a prospective customer in the UK market, at such a high asking price. I didn't stay calm and rationally analyse the situation first, which I should of done.
Even so, I can can only speculate as to what these respective charges and fees and costs would be as likely amounts. I have no clue whether they would be much or little, what the demands are for services, eg shipping, and/or how its divided and/or who ends up paying for it if it's passed on as part of wholesale deals or what have you. Without this insight, awareness, know-how or understanding, I can't really commeasurate as to how big the profit margins are at each specific point along this chain.
Westone are the primary dealer that manufactuer and produce the product (Westone 3). They know how much it costs them, all factors incorporated, to produce a unit, or batch of units (and how that divides down per unit off assembly line). They then set a msp for this product and only they can know the mark-up of that from production price. Variphone buy in bulk to wholesale deal themselves off Westone and distribute to other would-be dealers within a given market/EU. First off, the unit price per unit in their bulk deal, due to wholesale aquirement, is gona be less than native market/American msp. How much lower I can only speculate but I imagine in such, what I anticipate to be, massive deals, where very large numbers of a product are bought, for the reasons already discussed, it would be a significant mark-down to this price. Then, possible sur charges involved for this shipment or shipments to reach Variphone would be shipping costs; probably, on such large quantities of expensive product, insurance costs (that may be incororated in the shipping cost); import fees (I have no clue as to how these are determined but I imagine it's at fixed, categorised values or case x applied to a system set in place, like with customs charges); taxe (to Variphone, I can only see headphone tax of 2%, that I wasn't aware of but that you've listed there; no VAT, of course); and then, Westone, as the primary source/dealer to Variphone (to be a secondary dealer/distributor within a given realm/Europe), maybe charging them- or rather taking it out of their profit margin in the wholesale deal to Variphone- an amount to assign towards the general maintenance and running of their business, a distribution fee and a provision to accomodate for potential fluctuations in the exchange rates involved; I presume, as Variphone would be looking to accomodate a quality control service in their set-up as a secondary distributor, a service fee wouldn't be incorporated.Even all the above likely applcable and in place, Variphone would still, in all probability, be getting the Westone 3 units in at less than the native market/american market msp, at my reckoning. Then again they might not as I have no idea what Westone would knock of each unit bought as part of a wholesale deal! As a man running a business, |Fred, can you give me any educated guess or aniticpation of what one might get off in such a likely very, very big wholesale to distribute to a massive marketplace deal? A 1/3 off native market msp per unit? More than that? Less than that?
Anyway....then a tertiary dealer- here we have PJBox.co.uk, residig in the UK- buys wholesale stock from Variphone. They are within the UK so they will be charged VAT on that import of goods. According to yourself, they will also pay a taxe of 2% for handling headphones. They will also have to pay an import fee. Each unit they buy in their wholesale deal is gona cost more than the equivalent cost to Variphone, for a number of factors/added constiruents, this time atrributable/going to to Variphone as the dealer/distributor. Variphone, though they will charge less than their msp per unit, as it's a wholesale deal, will incorporate into their deal with PJBox.co.uk (or indeed any other tertiary dealer they deign to supply to), a distribution fee, a service fee, a provisional charge for potential currency exchange fluctuations, and a levy to act as a contribution to funnel into the funds to help run and maintain their business. However, it would make sense tha these are hidden charges/incorporated into the fee for the deal, as Roy didn't mention them to be in his mini breakdown of the components of the cost to them to obtain Westone 3 from Variphone; he mentioned VAT, import tax and that Variphone do charge and/or did charge him a shipping fee. Either road, the cost to PJBox per unit in their wholesale deal, even though there is gona be some kind of a reduction from what Variphone has set their msp at as part of such a deal, is gona be significantly more than it was for Variphone in their precursory deal with Westone. And, of course, it's higher than even that as a margin of profit for Variphone has to factored into this equation, also!
Even knowing all this now, though, and, admittedly, realising a lot of it is up in the air with certain, insider facts I/we can't possibly know (if Roy is being wholly honest, then it's more the Westone-Variphone deal I'm in the dark about), I know I was still partially right to have a pop at Roy of PJBox, or rather, to believe there was some greedy business practice goin on, as he eventually admitted to me, when he opted to mark-down the asking price for the Westone 3 on their site to 303 GBP from 345 GBP, that this was to be a figure at only a 2% profit margin to them ie that the cost per unit to them was 297.06 GBP and he was charging 345 GBP per unit (that's quite a healthy mark-up alone, on his end, for profit!).
The exchange rates at the time, meant that 399 USD converted to 315.15 Euros and 273.17 GBP. 297.06 GBP doesn't look too bad when compared to that, when given all the likely fees detailed above. In fact, it ain't bad at all really! 297.06 is inclusive of import tax and shipping cost, aswell as VAT, according to Roy, but if it was inclusive of only VAT, then that'd mean, exclusive of VAT, Variphone are selling each unit of Westone 3 to PJBox at 258.31 GBP, which is significantly lower than the american msp, converted! This if of course, slightly inaccurate as the figure of 297.06 is inclusive of import tax and shipping cost so that fee could be even lower! This means, even though Variphone must still be turning a profit by dealing with PJBox, that their actual deal isn't that bad at all to the tertiary dealer. However, they advised PJBox to sell the units at a msp of between 395 and 425 Euros! Thats where the exploitation of the EU/UK based customer comes in! Given, in the UK we cannot avoid VAT, which causes the deal Variphone give PJBox.co.uk per unit to rise to 297.06, we couldn't argue with say a 310-320 GBP msp. However, Variphone's advice to market the item at between 395-425 Euros is where we as customers would be getting taking serious advantage of! Over the american msp, that's a mark-up of between 70 and 100 GBP (79.65 and 109.65 Euros)! Given the VAT charge in the UK, I'd expect to pay up to 40 GBP over the American msp, converted, but 70-100 GBP is where the exploitation comes in in my opinion.
Therefore, to conclude, if all the above is accurate, I think Roy has, in the end, done quite an honourable thing by lowering his asking price of the 3's down to only 303 GBP! Now that I've said and reasoned all that out, VAT is the killer and the prime cause of price inflation to us UK residers! That trumps an approximate sale price per unit, from Variphone to PJBox.co.uk, of 258.31 GBP to 297.06 GBP! From there, the profit margines come in, and for PJBox.co.uk, these were set (at 345 GBP) acting on advice from Variphone of marketing the 3 somewhere between 395 and 425 Euros.
Hope that makes sense enough and sorry about long post!