FYI: Eastman and Aero including undisclosed upcharge on overseas sales

[ButteMT61]

Ha ha Lets hope you are a big fat Norwegian like those big Americans !!At least then you can feel happy that you have used up a lot more material Seriously if you were not being charged for VAT the jackets would be cheaper and you actually might buy more.Both Aero and Eastman could actually increase their sales and yes profits too ..if they were smart about this.And us Brits would not even have to pay more even if the Fat more material US subsidization "tax" was lost !!Alan

Hey Alan,I'm putting together a group of us big, fat Americans to come over for a "chat". See you soon... lol Seems you chaps need all the money you can get.. http://www.npr.org/blogs/thetorch/2...-seats-have-olympic-committee-playing-defense

 

[Jeff M]

I emailed Aero asking about their VAT policy on non UK sales last week.
I phrased my initial question "The prices shown on the Aero web site...are they VAT included?"

They replied;
"Hi, only on sales within the UK or Europe"

I felt my question didn't really pin down an answer, so I followed up it with;

"If somebody were to buy a jacket that is listed for $500 on your web site, and they lived in the UK, how much would the final charge be?
$500, or $500 plus VAT?"

They replied;

"they would pay £500.."

ie, no VAT fee added to UK sales, none deducted from non UK sales.
Same as ELC.

 

[ButteMT61]

Thanks Jeff. Not nice Brits. Not nice.

 

[oldcrow82]

I find this a very interesting thread and have quite a few thoughts on the matter. First let me say I (and I know I'll be labeled a goat for doing so) by the laws of the free market Aero is not charging enough for their products. Only when they have no more customers, nobody willing to purchase their products is an item overpriced.
What I know about European Tax law is only what I read here on the internet, knowing that everything I read on the internet is factual, I will presume that the VAT is rolled into the cost of a product, ie when aero purchases raw material's a VAT is charged. Again assuming what I read here is true, and the VAT is not allowed to be disclosed, I would assume that the listed price on Aero's site includes the VAT. I cant seem to locate the receipt that arrived with my newly acquired highwayman, but I seem to recall a 20% charge for a value added tax. Assuming that VAT is already included and another vat was tacked on I paid a 40% surcharge on my new highwayman. Again, my knowledge of Euro tax laws are only what I've read about here.
With that said, as a fellow business owner, my sympathies tend toward fellow business owners. Nobody forced me to buy my Aero. In other dealings, I have felt jerked around by fees or a price being to high and as a result I did not purchase the item.
I have noticed a trend in recent years of fees being a way for companies to regain profit margins that have eroded in years past. Take our American airline industry as of late. Baggage fees are a great example of that. There was a news story out just this week that American airlines, Delta, and Alaskan have made huge profits in the tune of Billions tacking on these fees. The reality is of course their overall prices went up but the marketing gimmick is a competitive ticket price but the profit margins are tacked on as fees. I know a lot of people scream about this tactic but in reality it is really just a marketing ploy.
In my small business not everyone can be charged an equal amount. It would be utterly to complicated and too time consuming (thus costing more $$$ because time is $$$). Some of our customers end up paying more for the same service than do others (or conversely our profits on some of our customers are higher than on others). I am putting words in Holly's mouth, but for them to charge every customer based on amount of material needed, time spent in exchanging emails, ect (not to mention possibility of returns or alterations), would be far too complicated. I have subsidized, in my purchase (having not exchanged my highwayman or need alterations) the cost of those who have, because essentially we have paid the same amount for our jackets. Or it can be said that Aero made less money on somebody who they had to exchange a jacket or make an alteration than they did with me.

So, again using Griff as a model, not only are non-EU buyers getting dinged for an extra 20% retail cost, but they are then liable for additional taxes at home for the inflated "VAT"-added price. We get to pay more retail and pay more in tax. Does that sound fair?



Or they can keep doing what they're doing.

In any case, full disclosure needs to be made. Otherwise unwitting buyers are still getting gouged.

I sure hate the word fair when it is being used in the context of the free market. By defination the free market is fair! You either accept Aero's price (buyer be ware) or you dont. I would say that is fair.
What isnt fair is being forced to purchase something....

 

[Jeff M]

...By defination the free market is fair! You either accept Aero's price (buyer be ware) or you dont. I would say that is fair.
What isnt fair is being forced to purchase something....

Most definitely.
I am a firm believer in if somebody is wiling to pay something for a product, then it is worth it..to that person.
What I don't like is asking a direct question and getting obfuscating answers.
Lay it out there.
Don't play on buyer ignorance and misleading answers as part of your business plan.
"we absorb the VAT..." yeah, right.
What you do is you raise the price of your products to non UK customers to cover the VAT you have to pay on UK sales.

The saying that keeps popping up in my head is...don't piss on my leg and try to tell me it's raining.
I may very well chose to stay where I am standing...but at least tell me up front what it is that is running down my leg.

 

[tonypaj]

What I know about European Tax law is only what I read here on the internet, knowing that everything I read on the internet is factual, I will presume that the VAT is rolled into the cost of a product, ie when aero purchases raw material's a VAT is charged. Again assuming what I read here is true, and the VAT is not allowed to be disclosed, I would assume that the listed price on Aero's site includes the VAT. I cant seem to locate the receipt that arrived with my newly acquired highwayman, but I seem to recall a 20% charge for a value added tax. Assuming that VAT is already included and another vat was tacked on I paid a 40% surcharge on my new highwayman. Again, my knowledge of Euro tax laws are only what I've read about here.

It is not tacked on, the company can, and will, deduct the VAT they have paid. The problem here is that the company does not have to pay the next step, the VAT for the final sale, as it is export from the EU. Yet the customer pays it.

 

[ButteMT61]

As in your airline example oldcrow, businesses have two choices when doing business where there are variables involved.
1) absorb the costs of variables into the products as a whole
2) charge different prices for different orders and circumstances
I've been on the receiving end of both. It stings because I can't help being big, although I could and did help being fat. I can cut my travel costs by not checking luggage - I don't. And I guess the "eye for an eye" part of me thinks that's fair because I've paid more for big clothing over the years.
In the end, it's up to the buyers. I do prefer Aero's (Holly) response to ELC's. which formally, is nil, and via PM, rather like "eff you".
Great fun whilst we all wait for jacket weather

 

[SuinBruin]

I sure hate the word fair when it is being used in the context of the free market. By defination the free market is fair! You either accept Aero's price (buyer be ware) or you dont. I would say that is fair.
What isnt fair is being forced to purchase something....

A "free" market is only free insofar as the buyers and sellers have adequate information to make an informed decision. This is why we have fair business practices laws, securities laws, civil fraud liability, etc.

If Aero and ELC disclosed their VAT policies on their web sites then there wouldn't be a problem. The issue is not the upcharge in and of itself but the lack of transparency and the apparent effort to take advantage of people's ignorance. (ELC's responses to Jeff, which Aero obviously aren't responsible for, showed a conscious effort to obscure the issue.) Once people have all the information they are free to decide what is fair or not.

 

[oldcrow82]

As in your airline example oldcrow, businesses have two choices when doing business where there are variables involved.
1) absorb the costs of variables into the products as a whole
2) charge different prices for different orders and circumstances
I've been on the receiving end of both. It stings because I can't help being big, although I could and did help being fat. I can cut my travel costs by not checking luggage - I don't. And I guess the "eye for an eye" part of me thinks that's fair because I've paid more for big clothing over the years.
In the end, it's up to the buyers. I do prefer Aero's (Holly) response to ELC's. which formally, is nil, and via PM, rather like "eff you".
Great fun whilst we all wait for jacket weather

Or the third option is not do business with this vendor in the first place. Nobody forces me to fly, or buy Aero jackets. Thats my point is that they are priced exactly where they should be, because enough people think the price is worth it.
I find delta, americans, and alaskans prices generally too high, which is why I fly jetblue or southwest, and only own one areo instead of multiplies

 

[oldcrow82]

A "free" market is only free insofar as the buyers and sellers have adequate information to make an informed decision. This is why we have fair business practices laws, securities laws, civil fraud liability, etc.

If Aero and ELC disclosed their VAT policies on their web sites then there wouldn't be a problem. The issue is not the upcharge in and of itself but the lack of transparency and the apparent effort to take advantage of people's ignorance. (ELC's responses to Jeff, which Aero obviously aren't responsible for, showed a conscious effort to obscure the issue.) Once people have all the information they are free to decide what is fair or not.

It is still a free market and again I argue fair, in that I am not forced to purchase their product.
The problem with freedom is that sometimes it is messy. If you find aero's practices untoward thank god for the freedom to not have to do business with them.

 

[ButteMT61]

Or the third option is not do business with this vendor in the first place. Nobody forces me to fly, or buy Aero jackets. Thats my point is that they are priced exactly where they should be, because enough people think the price is worth it. I find delta, americans, and alaskans prices generally too high, which is why I fly jetblue or southwest, and only own one areo instead of multiplies

I said businesses, not consumers But as others have pointed out, we don't have all the information, and those bad practices have spawned protective laws. It's not a matter of what I'll pay, but what I'll pay knowing the truth.

 

[SuinBruin]

It is still a free market and again I argue fair, in that I am not forced to purchase their product.
The problem with freedom is that sometimes it is messy. If you find aero's practices untoward thank god for the freedom to not have to do business with them.

I only find the practices untoward because I know about them. Now more people know about them, too, and Aero's justification for them. Having a better-informed customer base is not only compatible with, but is essential for, a functioning free market and the economically efficient allocation of resources.

 

[too much coffee]

It's a magic show put on by Aero and Eastman. Through an ingenious array of smoke and mirrors, Aero is attempting to hide the real issue which is the American consumer paying the equivalent of the 20% VAT also paid by customers of the EU. Let's not forget the Value Added Tax was levied by the Queen to be paid by UK and I presume EU customers when they purchase UK goods. It was never meant to be tacked on to purchases from American consumers living in the United States.

Aero charges the same price for a jacket regardless if the customer lives in Bedfordshire County or Richmond, VA. The customer in Bedfordshire, by virtue of the VAT should pay 20% more than the guy in Richmond JUST BASED ON THE VAT. Those are UK rules, not mine.

Aero clouds and disquises this with remarks about added production costs due to larger framed Americans with their plethora of phone calls and Emails to their one and only office person. This is probably true but it has nothing to do with the VAT.

If I take a size 48 jacket....charge me more. If I'm tying up Amanda with excessive communication......charge me additional. If the jacket has to come back for alterations and God knows what else....charge postage.

Just don't charge me the equivalent of 20% VAT tax and try to substantiate it to say it's being used to offset the admin costs, postage, excessive hide usage or what have you. Just don't give me the high hard one and tell me it's the same for everyone.

 

[tonypaj]

Normal business practices with me and where I work (let's just say hundreds of millions of dollars in purchases a year) are that contractors or suppliers give us prices without taxes. We deal with it then with the authorities, giving our suppliers proof that they can sell without adding taxes, as would be the case with export. Same goes for me personally. If the transaction is supposed to be without taxes, I will not pay the tax. Be it a leather jacket or a car. And I have argued these things for my employer and myself to the point of exhaustion...

 

[cloudylemonade]

We do not charge VAT to American customers but are forced by the economics of trading in UK to 'swallow' the VAT portion of our price in the UK (paid to HM Government by Aero along with all the other UK taxes imposed on us, both blatant and hidden…… NI contributions, employment taxes, waste disposal taxes, rates, etc etc).

There are many, many instances where a home market product costs less than one bought abroad but as regards Aero this seems to be a UK/USA problem which appears be directly connected to the fact that we have no retail outlets in either the UK or USA (The Factory and Insurrection excluded). Perhaps if more stores in USA stocked Aero the value we offer would become more apparent.

Although our biggest markets are Germany and Japan followed by France, we get very little direct mail orders from these countries in comparison to the volume of trade sales, shoppers (end users) preferring to pay a much higher price to buy from one of the shops we supply even though they know how to order online and make substantial savings. Customers in the UK and USA pay a much lower retail price than charged in these countries for example, Aero Grizzly £1200 (Japan) £931 (France) £940 (Germany) while the web price (and UK & US price) is only £700. Similar % savings can be made right across the board by German, French and Japanese customers yet the % of retail as opposed to trade is very low in comparison.

It also benefits us that special orders from these stockists also tend to be less complicated, and therefore less time consuming, as our stockists (trade price customers) can’t return special orders, they have to sell them from stock, same as we do with our returns on our sales page.

Pricing a jacket is all about numbers, the more jackets we make, the less the overheads on each one so the time spent on very involved 'specials' can reduce the number of garments made per week.

All in all, we believe our jackets are exceptionally good value whether bought direct from the factory or not, and even our customers in countries where our jackets are in stores seem to agree while those who shop on-line obviously get the best deal.

As a footnote, we give six weeks paid holidays to each staff member even though we already pay the highest level rates in the UK clothing industry, with such skills honed over 20/25 years we wouldn’t want to loose any top machinists would we? Bottom line, we are a very ethical company and that's in the old meaning of "ethical".

 

[Dr H]

In view of the adverse comments expressed on both fora, I'm simply relieved to have an order placed with JC at Good Wear. A longer wait certainly, but no qualms about how the process operates.

 

[oldcrow82]

I only find the practices untoward because I know about them. Now more people know about them, too, and Aero's justification for them. Having a better-informed customer base is not only compatible with, but is essential for, a functioning free market and the economically efficient allocation of resources.

I agree whole heartily.
I find it ineresting that no one has bemoaned the authors of said confusion (wether aero or elc is hiding behind knowingly or not). Without a vat would not aero and elc be either forced to outright raise prices or confusion averted? It sounds to me like the vat itself is meant to be hidden.

 

[hyptul]

we are a very ethical company and that's in the old meaning of "ethical".

You have been charged with concealing information. If you apologize, we could believe that hiding information was unintentional. But instead of excuses you say that you are well behaved in another. You do not even realize how ridiculous it is.

 

[Don Tomaso]

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.

This was a bit tongue in cheek, of course, even without a smiley . But then the timing was interesting, wasn't it?
But be that as it may, I think the way Holly defends her case here will do no good in the long term. It might be wiser to return to a more transparent pricing-policy, eg stating export-prices (excl VAT) clearly, as many other companies do. If other costs, like excessive emails or alterations, need to be absorbed, this could be done by a customization-flatrate or the like. To my knowlegde customers like to be informed openly about these things, even if they don't really save much. It simply makes one feel better. As I don't really have an issue here, living inside the EU, I leave this thread now to the US-guys and Aero. Keep it friendly.

 

[Don Tomaso]

You have been charged with concealing information. If you apologize, we could believe that hiding information was unintentional. But instead of excuses you say that you are well behaved in another. You do not even realize how ridiculous it is.

Don't you think you should consider some more gentlemanlike wording in your posts? I find this most inappropriate and I hope the bartenders will have a look at this.