Rip off Britain again

[kafkaian]

The only thing I'd add to this argument is the value of the product in real terms on both sides of the pond.

So, if the saw is only say £30 our value across the pond, is that commensurate with the overall quality and an accurate reflection of what the Americans see as reasonable value for what you get? If so then I wouldn't buy the product for say £140 over here, but may spend say £60.

This is why Chinese products are so appealing. It's often worth the risk to spend £30 on a power tool which you might have to chuck away after a year when spending £300 isn't necessarily always going to supply you with long term ownership. And then there's resale value/depreciation and other factors to take into account.

The conclusion for me is that one cannot generalise and each product has to be taken on its own merit as far as reasonable analysis allows. If I'm unsure, then I buy cheap Chinese stuff accounting for any governable idiosyncrasies and inaccuracies. If however I'm pretty confident about a product's guaranteed quality, then I spend the money.

 

[Andy Pullen]

Well at least this thread has stopped the tumbleweeds blowing through the forum for a while.

 

[Anonymous]

Here, here, Andy, healthy debate never hurt anyone, except when I mention that the forum needs livening up, I get severely rebuked and told to go else where if i'm not happy........ wooooh there calm down, just of to take me medicine........

 

[motownmartin]

Why aren't Americans queuing up to import bread from the UK?

Because it would be stale by the time it got there :lol:

I'll just get my coat

 

[engineer one]

what everyone who complains about rip off britain forgets is the cost of land and housing which must be factored properly into your costs.

there are at least 300 million folks in the us, and 60 here,
and land costs are even now, no more than 25% of the same here.

so two things happen immediately, you can buy a larger quantity at one time and you can store them more cheaply when you have bought them.
next thing is in a built up area like chicago, you are no more than a couple of hundred miles from a population the size of the whole of the UK, thus your distribution costs are lower.

final thing that everybody forgets is the cost of money.

to buy from china or wherever, you have to either prepay, or at least tie up your money in your own bank to fund the letter of credit, for anything up to six months if you are ordering a special. then you have to prepay for shipping, and the time that takes, then you have import duties and taxes plus customs clearance etc.

volume equals high turnover, and within reason a decent profit since you recover your money more quickly, and in fact the whole raison detre behind business is to recover your money as often as possible during the year, and make a margin on top, that way you eat, and employ people too.

don't forget that many of these products are disposable, and also discretionary purchases, so do you want the gamble of buying lots of them and hope that they can be sold. if so start it yourself as has been suggested before, or buy of QVC, where you often find its cheaper in screwfix or b&q :? go figure.

some people will never appreciate that you have to pay for some services and thus will always ignore overheads as a legitimate cost of doing business. a business of less than 10 people generally has to waste the whole time of at least 1 person just to handle the redtape, taxes, vat etc. :twisted:

paul :wink:

 

[DomValente]

Got to disagree there Paul.
I have dealings in Italy both private and commercial.
Rents and rates are far lower there, yet there is less land than over there and the same number of people but prices for unprepared foods and tools is lower.
So it is my belief that we are not being "ripped off" by retailers, it is a vicious circle caused by exorbitantly high rents, high rates and ridiculous prices we pay for utilities, these have to be payed for by retailers who in turn pass their costs on to us.

Dom

 

[engineer one]

but dom, think about two things.
italy is mainland europe, and has always exported. certainly since the founding of italy as a complete country :lol: in addition, since the romans has had a trading background. remember that when dewalt started making in europe, they did it from italy.

but of more importance is that in the business world, italy invests in machinery and has a decent tax structure for doing business, although you have of course to keep 3 sets of books :lol: :twisted: you know, revenue, actual and " the friends"

and of course the italians take many eu rules with a pinch of salt, rather than impose them as heavily as are done here. plus the sun shines there :lol:

finally of course food is actually important to the italians, so you get decent quality for a good price, whereas here we get cheap food but little quality

 

[DomValente]

although you have of course to keep 3 sets of books :lol: :twisted: you know, revenue, actual and " the friends"

Noooo.

Although things have become very tight now. When you leave a shop even if you've just had a coffee, the revenue can now stop you and ask to see a receipt.
I recall when it was announced, by the then Prime Minister that all cash registers must have two till rolls, one for the shopkeeper and one for the government, his company Olivetti was the only one that was aware of this new law and therefore the only one tooled up to supply the market :-k

Dom

 

[Scrit]

One of the things which has always annoyed me is the way many European power tool manufacturers set a lower wholesale prices on the stuff exported to the USA than sold through the channel here in the EU, presumably they take a much smaller margin in the USA to keep the volume up and in order to be competitive with the American manufacturers. There are some exceptions to this, such as Mafell, but if you read the American web sites you'll periodically see some bellyaching about their pricing policies (and those of Festool as well). The power tool market in the USA is very much driven by the big sheds, though, and there have been many allegations that certain manufacturers are producing lower grade tools for sale through these low-price outlets.

Oh, and whilst I'm on the subject why is it that a Porter-Cable 7539 plunge router, made in the USA, costs hugely more in the EU when coloured red and sold under the Flex-Porter Cable banner? Same applies to "American" Milwaukee tools, many of which were designed and are still made in Germany in the former AEG and Atlas-Copco factories?

Having looked at importing stuff myself a few times I'd say our economy here is really skewed by freakishly high property prices, extortionate fuel prices and by a business rates system which has driven certain classes of retail business out of existence in the last 15 years (so when was the last time you saw a habadashers then?). I don't think the cost of shipping, customs clearance, etc is the issue in the UK - the high costs associated with operating here in terms of rent, rates, fuel (transport and distribution) are. So if anyone is ripping us off, it's the government....

Scrit

 

[A_n_g_e_l_a]

Didn't thinkit would be long before you popped up!

I take it, David, that you were happy to read my contribution. Any other interpretation might lead one to assume you were being churlish with a possible tendency towards the misogynistic. Heaven forfend that such behaviour would be allowed in this Forum.

 

[ivan]

I understand how some folk may come to write their posts, but please consider the following.

LN are modest volume producers with a reputation for a relatively fixed wholesale price, so some idea of the relevant distribution tax/duty and sales costs in small sclale volume can be estimated by looking at their UK/USA retail prices. Many posters have pointed out just how small this difference is, before VAT.

Secondly, most of the above arguments have difficulty in holding up when considering the Made in UK DW621 and Made in Italy DW625 that I bought in the USA for half price (pre VAT/US sales tax). I would have bee very happy if B&D sold here at the US (pre sales tax) price + VAT. The pre tax prices have become closer in the years since the popular press began writing about rip off Britain, so it's not hard to believe there is some truth in this decription!

It is worth remembering that there were more people in the unenlarged EU than in the US, and as a supposedly unified marketplace we should be reaping similar benefits of scale. I suspect we won't get them, as we do not demand it in the way americans do when buying goods.

 

[beech1948]

I've hesitated to drop into this but here goes.

I have spent 25+ years working for US based companies and have worked on EU as well as UK pricing. That means starting from the factory gate price and working up full profit based price structures. The following may help a little.

1) Factory Gate Price. This is the price the factory charges the rest of the company for its products. It comprises all materials inputs + overheads + utility costs+local rates such as local council charges. To this is added a factory profit margin. Typically 15 to 35% of internal costs per item.

2) Factories ship to other countries and not just the parent company so there is a mythical line in the factory which when the goods are pushed over it they become the property of the recieving country. At this point the price increases to:-
Factory gate price+HQ country mark up for profit+shippings costs ( 2-4%)+ insurance+transport to port of embarcation+any taxes due on export

3) upon landing in say UK there are taxes made up of import duties and VAT + profit added by UK subsidiary+transport to UK HQ warehouse+stock holding charges(profit 2) at which an OEM UK price is set and a RRP price.

4) Usually the distributor will pay transport for pickup from HQ warehouse and the OEM price and to this OEM price add the following:-
OEM+transport to distributor+VAT increment minus VAT reclaim from OEM price+ profit.

This is a simple case. AS you can see there are several points at which a profit is added. The most complex I ever dealt with was Switzerland where the treatment of EU VAT+local taxes is tortuous and there were over 9 points at which a profit was added.

On balance I think that there are several issues at play here.

Simple things are marked up to price levels which bear no relation to the value of the piece but bear a relationship to the retail idea that every thing has a price point eg £5.99 or 59.99 or 109.99 you get the idea and that is used to create the maximum profit.

ALL of the other reasons given in other messages about VAT, the cost of property leases etc etc are mainly just the ramblings of those repeating what they have been taught by the media to use as excuses. Basically the tax and property leasing environment in the UK is on a par with other countries.

The problem is really to do with greed, that the overly rich woodworkers ( and others) do not complain and that the shop keeper can get away with it.

RIP OFF Britain..definitely. The old adage that the US has a bigger population is bunkum as the unenlarged EU has a higher population that the US. It is more to do with the poorly managed EU economy and the lack of commonality we as users should be demanding in standards, price, competition and distribution and that includes price parity with the US.

regards

Alan

 

[White House Workshop]

=
This is why Chinese products are so appealing. It's often worth the risk to spend £30 on a power tool which you might have to chuck away after a year

If however I'm pretty confident about a product's guaranteed quality, then I spend the money.

But isn't it really difficult buying real quality any more? For example my one and only circular saw is a Black and Decker professional range that I bought in 1975, and it's still going strong. I paid £10 for it back then, which was a lot! It's had the power cord replaced, and has gone through a few blades, but it's as good functionally as when I bought it. My stepson, however, has just gone through 3 circular saws in 6 months on a home renovation project and each one has ended up in the skip because for a few pounds it's not worth the hassle of returning it - cheaper and easier to nip down to Wickes or wherever buy a new one. Let's all contribute even more to the landfill why don't we? In spite of chucking away almost £300 quid's worth of tools so far he still refuses to buy quality professional stuff.

I think I must be getting mean in my old-er age as I refuse to buy imported junk any more. However, it also makes me feel good, really good in fact, to know I'm not contributing to the need to build more coal-fired power stations in some parts of the world. :twisted:

 

[Green]

:-k

 

[Harbo]

One way around this issue, if you are buying downloadable software, is to buy from the US sites.

I recently had to remove Norton from my computer as all the tweaks would not cure it. In the end I had to use the "final solution" which was to remove it and download the latest version. What p####d me off was that there was 180days left on the previous subscription which was wiped out!. They wanted £59.99 for the new one but on the US site $59.99 - half as much!
In the end I have loaded AVG Free edition - working fine.

Rod

 

[engineer one]

beech, as one of those who you feel has been pushing the media line, i might add som eother variables that you have ignored.

the us market is basically homogenous, ie in most of the mainland states, apart from sales taxes, the transport although long in time is standard, and understood, there are nowhere near the same variations in fuel duties that we and the europeans have to get involved in. witness the constant complaints from uk owner operator truckers about being beaten on price by those from all parts of europe, not least because of roadtax and fuel duties.

also internally in europe each country has many more variations on the theme than inside the states. although many american states have wierd rules, they also have standard codes in most places so it is easier for the companies to produce a one size fits all product. not so easy in europe

certainly european property and business overheads are high, but they seem to promote greater efficiencies whereas here they just make life difficult.

however the one area that you have ignored is to do with the multi nationals that attribute different costs in different countries to maximise the profit and minimise taxation, which is why the europeans and indeed jaguar :lol: fix a dollar price at the beginning of the year, and then gamble on the financial markets that the prices will stay stable over the period. they then sell in their home market at prices which do not represent the actual costs. check out a ferrari in italy, switzerland and america :roll:

and also do not forget that it is only in the last 10 years that the uk interest rates long and short term have been on average below 7.5% so you have to cover your interest costs before you think about profits.

then of course we have all the social taxes in europe that do not apply to the yanks :?

we can of course go on for ages, but the fact is that unless you are prepared to invest a lot of money or do the occasional one offs then it is hit and miss importing yourself.

paul :wink:

 

[dolmen]

Good healthy debate...

just to perhaps clear some things, if you care to watch a very interesting film, I'd recommend the following, it has three parts, and you really need to watch it all. It sorta explains a lot of what is being discussed...

http://video.google.co.uk/videoplay?doc ... &plindex=4

Best Regards,

 

[DomValente]

Alan wrote

ALL of the other reasons given in other messages about VAT, the cost of property leases etc etc are mainly just the ramblings of those repeating what they have been taught by the media to use as excuses. Basically the tax and property leasing environment in the UK is on a par with other countries.

I can assure you I was not rambling, the media as far as I am concerned lie as much as do our politicians.
I speak from a wide experience of paying taxes both here and in Italy. Our taxes, rents and rates are considerably higher here than in Italy and where you compare like for like, the retailer gets more for his money over there, making it easier to keep prices at a sensible level.

Dom

 

[A_n_g_e_l_a]

I'd recommend the following, it has three parts, and you really need to watch it all. It sorta explains a lot of what is being discussed...

I wouldn't waste your time - just took a quick peek and it appears to be the god squad proseletising again. Why do they need to do that?

 

[engineer one]

i agree with you dom, the interesting thing is that the italian coffee market is regulated, and the price is i think still fixed by the government, but the companies are huge, and make money because they have to be so efficient. come here and it's rubbish at a big price :? and of course paper cups

paul :wink: