FYI: Eastman and Aero including undisclosed upcharge on overseas sales

[Deleted member 16736]

You could order your jacket through Insurrection. They're currently charging $1099, which works out at around £700. This is a bit more than it would be direct from Aero, but customs duties would already have been paid, and shipping will be cheaper. Ironheart also have a flat price worldwide, but include shipping within that.

I suspect that some of it is to do with higher costs associated with an export, be they credit card fees, writing a customs declaration, and possibly postage, as John Lever pointed out in the original thread on VLJ.

If you're happy paying Aero's or ELC's prices then buy a jacket from them. Given that neither company is particularly large or a household name, I doubt that they're engaged in rampant profiteering. And, yes, I appreciate a 20% discount would be nice.

If you're not then Goodwear, Lost Worlds, Bill Kelso and so forth offer similar styles without any surcharge. I'm sure that they'd accept any sales you put their way. (Unless Goodwear aren't taking orders again at the moment. )

Is shipping included? I thought you had to pay for shipping too. When I ordered a jean jacket from Aero recently, I was charged by UPS upon delivery. Not sure if that was for shipping or customs, but it wasn't coming out of them whatever it was.

 

[Rudie]

It depends. I had to pay shipping for my first jacket, but not for my second. When the second jacket was damaged and had to be repaired I paid the shipping to Scotland. Aero didn't charge for the repairs and covered the shipping back to Germany.

 

[Don Tomaso]

I agree that Aero should charge overseas customers (outside the EU) the et price price, excl VAT. US customers then pay the VAT locally, in Germany the similar process is called "Einfuhrumsatzsteuer" (we love long composed nouns in Germany ). Of course, both taxes, the "Mehrwertsteuer (VAT)" and "Einfuhrumsatzsteuer" are the same percentage, in my case that would be 19% for buying goods from the US or Japan, for example.
So, in fact, it seems that Aero pockets money they should not and I would say that a statement from Holly or her father would be highly welcome. This, however, brings me to the question why this thread has started just now? A coincidence? As we all know, Aeroleather company is on summer break since friday, so I hope they have a look at this before things get ut of hand, as if happens quickly on the net. I really don't wat to cry "conspiracy" here, but the timing of this thread makes me quite suspicious.

 

[tonypaj]

I'm happy to muddle the waters a bit. Aero most definitely states the amount of VAT in their invoices, at least in the ones sent to me. They also used to deduct the VAT when selling outside the EU, Switzerland in my case. However, I asked for it, and they had no problems. That was a few years back, today I do not know.

 

[Dr H]

A conspiracy theory sounds a little dramatic - if you read the thread on the VLJF the poster became aware of the pricing discrepancy before placing an order, became concerned, and posted. I don't think that he'd have considered holiday dates before doing so.

 

[hpalapdog]

This is a result of the way VAT is buried in the price of the items in countries such as the UK and other EU countries. The retailer is actually not permitted to show the pre-VAT price and tax separately.

Nonsense ! The VAT content is normally shown on receipts for more expensive items, unless of course, the vendor is bellow the threshold for VAT registration.

Or, a UK website showing both prices

http://www.scan.co.uk/shop/computer-hardware/all/hard-drives-ssd/ssd-25-sata-iii-(240gb-1tb)

 

[Graemsay]

Is shipping included? I thought you had to pay for shipping too. When I ordered a jean jacket from Aero recently, I was charged by UPS upon delivery. Not sure if that was for shipping or customs, but it wasn't coming out of them whatever it was.

Ironheart have delivery built into their prices. Aero charge separately, as do Insurrection.

The UPS charge is probably for customs. Shipping companies often levy a further fee to cover collecting any duties due.

 

[Jeff M]

"Neither will apparently...". Is this a fact or an assumption or an accusation? ...

Fact.
I live in the US, have purchased several items from both ELC and Aero..never had the VAT deducted.
This whole discussion came about as I recently purchased a jacket from ELC, and while discussing the prices of an ELC A2 vs a GW A2 over at the LJ forum, I noted that based on the prices advertised on ELC
s web site there was basically no difference in cost to US buyers between a GW and an ELC.
A forum member who lives in the UK was sure that I had to be mistaken, stating that the ELC web advertised price must be VAT inclusive, and that would be deducted when they shipped outside of the UK.
I emailed ELC and asked them about this...they noted that no, both UK and non UK buyers paid that same price.
No extra charge was added to a UK buyers total cost (ie, no VAT added post sale) and no VAT was deducted from a non UK buyers total cost.

 

[Kt Templar]

Nonsense ! The VAT content is normally shown on receipts for more expensive items, unless of course, the vendor is bellow the threshold for VAT registration.

Or, a UK website showing both prices

http://www.scan.co.uk/shop/computer-hardware/all/hard-drives-ssd/ssd-25-sata-iii-(240gb-1tb)

Stuff like computer equipment is an exception. Theoretically are expected to be business-to-business sales so the VAT usually can be reclaimed.

http://www.hmrc.gov.uk/vat/sectors/consumers/basics.htm

Prices in retail shops

Prices advertised to the public in ordinary retail shops include VAT. No tax will be added to the price when you pay. This is a legal requirement.

Prices in advertisements, catalogues and price lists

Products advertised in outlets, magazines, on the internet, or shown in catalogues, price lists and other literature may be aimed at the consumer, businesses, or both. If they're only meant for the general public, they'll show you a price including VAT. This is a legal requirement.

If they're aimed at both consumers and businesses, they will usually show a VAT inclusive price, but may also show a price without VAT. The VAT inclusive price must be given equal importance, but read carefully to make absolutely certain you understand what price you'll pay.

Prices aimed only at businesses are usually shown with no VAT included. VAT will be charged on top of the price shown.

VAT on bills and receipts

Most retail prices on bills and receipts include VAT - it is not shown separately. However, some may also show the VAT element as a separate line. This doesn't mean you're being charged extra - it just shows how much tax is included in the price.

Ok, so they can show the VAT as a separate line in the receipt but ensure that it is clear that it is part of the total.

The question that has been bugging me is: Are these 2 companies actually charging VAT? We would imagine that their turnovers should be higher than £77k a year... which is the point where they MUST register for VAT and must charge. As that probably only amounts to an average of 3 or 4 jackets a week! Interesting....

 

[Aerojoe]

Fact.
I live in the US, have purchased several items from both ELC and Aero..never had the VAT deducted.
This whole discussion came about as I recently purchased a jacket from ELC, and while discussing the prices of an ELC A2 vs a GW A2 over at the LJ forum, I noted that based on the prices advertised on ELC
s web site there was basically no difference in cost to US buyers between a GW and an ELC.
A forum member who lives in the UK was sure that I had to be mistaken, stating that the ELC web advertised price must be VAT inclusive, and that would be deducted when they shipped outside of the UK.
I emailed ELC and asked them about this...they noted that no, both UK and non UK buyers paid that same price.
No extra charge was added to a UK buyers total cost (ie, no VAT added post sale) and no VAT was deducted from a non UK buyers total cost.

Probably they are considering all their internet sales as locally made sales, therefore, collecting VAT always. As long as they declare this VAT to the treasury, they are ok. Besides, they are free too tag their products as they want.

Overseas customers can chose to not buy from them and everybody happy.

Then, there are reasons why a business wanted to follow this pricing policy. If they were discounting overseas sales a 20%, they could face a problem of parallel importations. That it is to say, their very same product, 20% cheaper in the shop next door.

If anybody of you manage to have an ELC jacket without VAT, please let me know because I'll re-purchase from you

 

[wdw]

Do overseas buyers need to pay extra on top of the advertised price for postage? If not, presumably that cost can be deducted from the differential. I can't imagine 3kg or more to the US can be cheap.

Possibly the Aero business model uses this "windfall" and allows it to contribute to the countless variations that are made at no extra charge and which seem to be highly valued by customers. All that could change now, though.

This is obviously a real can of worms and warrants some expanation or a lot more clarity, but it reminds me of the generally massive 35% uplift (55% at $1.55/£, then less 20% VAT) we UK buyers usually suffer when US companies sell over here by simply changing the $ to a £ sign. I'd love to pay US prices for electronics.

 

[ButteMT61]

A blanket (hidden) fee to cover shipping and other items like customization is lazy at best. We don't know how much of the cost is profit, and UK buyers are getting that for free - on our "tax".
It's also just dishonest. And not what I wanted to hear after other problems in the last year.

 

[billyb]

Hmm, if you are a foreign customer and don't approve of the list price (which includes an non-refunded VAT) of Eastman and Aero products, you could just choose not to purchase their products and take your business elsewhere. If enough foreign customers make this choice, then Eastman and Aero may be pressured by the lack of demand (i.e. Capitalism) to offer a VAT discount to foreign customers.

However, Eastman and Aero seem to be overly busy. If the demand remains and customers continue to pay the list price, what incentive does Eastman and Aero have to discount the list price by the VAT for foreign purchases? I think what Eastman and Aero is doing is a bit risky and could potentially alienate part of the customer base in the long run, but it is a business decision. I really don't think it is unethical, rather, a calculated business risk.

On the other hand, this thread is a good way to inform Eastman and Aero's customer base of the situation...a catalyst of sorts to possibly change demand.

I guess if I would have thought about it, I should have know. I have traveled to Europe a dozen times for more for work and always like to pick something up to remember my trip. On my way back to the States, I would stop by some sort of tax office at the airport to reclaim the charged VAT on my purchases. The trick was planning enough time for reclaiming the VAT charges as I always seemed to cut it close getting to the airport.

 

[ButteMT61]

I don't see how it's not unethical. I'd wager most here don't either.
As for VAT, you need serial receipts there and you need to pad for time in the way out to stand in line and get the refund. Bottom line is they make it somewhat of a pain, likely hoping many will skip it. You've already paid, so most likely don't care. All depends on how much money and how wealthy you are...
Either way, it's shady. And I'm shocked it's not come up before. I guess trust is often misplaced.

 

[tonypaj]

Fact.
I live in the US, have purchased several items from both ELC and Aero..never had the VAT deducted.
This whole discussion came about as I recently purchased a jacket from ELC, and while discussing the prices of an ELC A2 vs a GW A2 over at the LJ forum, I noted that based on the prices advertised on ELC
s web site there was basically no difference in cost to US buyers between a GW and an ELC.
A forum member who lives in the UK was sure that I had to be mistaken, stating that the ELC web advertised price must be VAT inclusive, and that would be deducted when they shipped outside of the UK.
I emailed ELC and asked them about this...they noted that no, both UK and non UK buyers paid that same price.
No extra charge was added to a UK buyers total cost (ie, no VAT added post sale) and no VAT was deducted from a non UK buyers total cost.

No extra charge should be levied with the UK buyers, as they pay the VAT that is included in the total price, and stated on the invoice sent to the UK (or EU) buyers. Non-EU buyers should not pay the UK VAT, as it is not applicable to exports.

Aero, before, did it this way, with me, as well. Today, I do not know. I have never bought anything from ELC except from gloves. VAT or not, that was fine...

 

[hpalapdog]

Stuff like computer equipment is an exception. Theoretically are expected to be business-to-business sales so the VAT usually can be reclaimed.

Nope. I was in Oxford St. just yesterday and a large clothing chain had the items tagged with the VAT inc. price and bellow that the price ex.VAT
What is not allowed is to advertise or price something in the shop with only the ex. VAT price displayed.

BTW. I'm VAT registered, as are ELC and AERO, so probably take more notice of such arcane intricacies !

 

[Kt Templar]

Nope. I was in Oxford St. just yesterday and a large clothing chain had the items tagged with the VAT inc. price and bellow that the price ex.VAT
What is not allowed is to advertise or price something in the shop with only the ex. VAT price displayed.

BTW. I'm VAT registered so probably take more notice of such arcane intricacies !

I wish I could find the ruling against McDonald's from a few years ago. They were specifically instructed that the way they were showing the, then newly instigated, 10%! VAT on fast food was illegal.

The listing from HMRC shows that the VAT inclusive amount must take precedence, obviously to prevent retailers from advertising the lower non VAT price large, then (+20%) in small print. Which is what used to happen in a lot in magazine ads, notably in HiFi and TV + Video ads. No idea why perhaps they were pretending that they were selling to trade.

As a VAT registered person you'll appreciate the unfairness of being made a unpaid Tax Collector. .

 

[HoosierDaddy]

Letsee..
ELC and Aero are charging overseas customers(USA) VAT...just like it charges local customers...but then..it's not really a VAT charge...because it's not manditory that USA customers must also pay VAT. So in reality this charge for USA customers is only more profit for ELC and Aero..that they pocket. The prices for local and USA customers look identical..so then why should USA customers object? Locals suggest...'Hell we gotta pay it...so we'll figure in just why you should too'...'And if you don't agree that's any kinda fair...Go elsewhere'!
Interestng....
HD

 

[cloudylemonade]

The factory is closed for a 2 week holiday, but I've just noticed this thread and wanted to respond to assure you we're not dodging the issue. I won't be able to respond regularly as I'm on holiday for most of this time too, but here's our response.

We do, and always have, had one price Worldwide. It is standard practice in Europe is to list items for sale at a price that includes VAT, how many European firms deduct any proportion of that price relating to the VAT on exports I couldn’t say.

When we first started Aero over 90% of our production went to trade customers with very little retail other than in The UK.

Once we started to make Horsehide jackets we found strong price resistance in The UK while our overseas market increased. The bottom line was that if we wanted any home market we were going to have to swallow the loss of the VAT content of the price we get in The UK or price ourselves out of The UK market. As these sales were such a small portion of our sales it seemed a price worth paying. Basically we were/are supplementing our UK retail business by taking the loss, rather that overcharging our export customers.

In the same way the volume of our trade sales keep the prices down on all retail sales even though traders pay far less than anybody for their jackets.

Over the years our home market has increased and while one Worldwide price might seem unfair, and I can see everyone’s point, there is more to consider.

Cost of supplying a customer overseas is more expensive than within The UK.
While local sales are usually done by phone, overseas sales can take dozens of (time consuming) emails, all needing to be written and replied to by Amanda who runs the office single handed, and export paperwork is more involved.

Then there is the cost of exchanges, returns. We do not charge return postage for replacements, even if it’s not our fault that a second jacket or alteration is needed.

Also we do not charge for alterations to returned jackets. While the cost of this is very low within The UK it can run well into 3 figures for exchanges, returns from North America or Japan.

Twice during the last twenty years when the dollar was low against the pound we gave free shipping to North America (That was several years in total) and we also put hundreds of free Lochcarron scarves in with jackets going overseas.

Not wishing to upset anyone, but the average size tends to be 2 or 3 sizes larger for the USA than any other country, therefore uses a good few feet more leather, which is another price balancing factor.

OK, I’m sure there will be some who think none of this might seem to justify what is being described as a “surcharge” on export jackets but it all adds up and as all Aero customers know, we go out of our way to give the best possible customer service whilst keeping our prices as low as possible and we will continue to do the best by our customers.

 

[HorseHide]

Not wishing to upset anyone, but the average size tends to be 2 or 3 sizes larger for the USA than any other country, therefore uses a good few feet more leather, which is another price balancing factor.

Charging us more and then calling us fat - tough love!