FYI: Eastman and Aero including undisclosed upcharge on overseas sales

[Kt Templar]

I'm quite glad that my initial interpretation of the situation is spot on to how both Aero and ELC see it. The END PRICE in Europe is identical to the END PRICE in the US. EXCEPT in the UK both companies lose X amount to the government in VAT when selling to a UK buyer. That is what they mean by absorbing the cost. You in the US are not paying any more at all.

However, you should pay more for shipping, you are further away and it costs more. Though it should be proportional and realistic.

 

[tonypaj]

I have argued one side of the coin, purely legal and contractual one. Which is no VAT should be levied when it is not legally required, regardless of other business circumstances.

Then there is the other side. I have 6 Aero jackets here, and the next leather jacket will most likely be from Aero. They have always kept their word with me, with prices and the deliveries, the service is impeccable, the product is what I want. At a price I wish to pay.

 

[hpalapdog]

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.

It's very rare to have perfect information in a market that's why things like arbitrage exist.

Go into a GAP branch in London and you can find an American company taking advantage of this. The prices are shown in Sterling and Euros. Most people without a calculator at hand are likely to assume the two are similar. In fact the person paying in Euro's is making a saving of circa 18%. Do you think the girl at the checkout tells punters "ere darling it's cheaper to use Euros" Of course not ! Caveat emptor is one of the cornerstones of capitalism. Therefore I see no reason why Aero should change their website, however if someone specifically asks for a VAT free sale out of the EU then they should oblige. Indeed it should be the automatic response free of terms like 'absorption' ! This is a term normally found in something like Star Trek.

 

[Kt Templar]

The reply from Aero seems be: The price is he same where ever you buy it from. The VAT is a local issue specific to the UK, we pay the VAT for the UK market out of our own pocket due to market weakness in the UK.

 

[Dr H]

. Let's not forget the Value Added Tax was levied by the Queen.

Call me a pedant, but it's levied by HM Government. We've not had a monarch with those powers in the UK for several hundreds of years. ;-)

 

[Norwayman]

I got a Jacket from Aero earlier this year, and paid full price including their EU Tax (660GBP).
When the jacket arrived Norway (NOT EU),I had to pay 25% Norwegian Tax on top of that...
Oh well...

 

[Graemsay]

For the Norwegians, surely the solution would be to buy a cheap flight over to the UK, pick up the jacket from the Aero factory, and reclaim the VAT at the airport.

Whether or not you declare it upon reaching Norway is up to your own conscience.

 

[too much coffee]

Call me a pedant, but it's levied by HM Government. We've not had a monarch with those powers in the UK for several hundreds of years. ;-)

Guess I'm really behind the times. So what does HM stand for?

 

[cloudylemonade]

The reply from Aero seems be: The price is he same where ever you buy it from. The VAT is a local issue specific to the UK, we pay the VAT for the UK market out of our own pocket due to market weakness in the UK.

This is exactly what I have been trying to get across. It is not a case of us "concealing information" as we've been accused of. We have always had a standard price, world wide. There have been no changes in our 30 years as a company.

 

[Dr H]

Guess I'm really behind the times. So what does HM stand for?

Her Majesty's Government, but the balance of power shifted in the 17th Century.

 

[too much coffee]

Well this post's subject and follow on remarks has been a real eye opener for me. Let me just say "We'll have to agree to disagree."

I'm out of it.........I have a headache!

Holly, have a wonderful and fulfilling vacation.

Regards,
coffee

 

[schitzo]

Having read Holly's response I think that's absolutely fine. The cost is the cost is the cost. Everybody knows what the price is before they buy and there are no hidden charges. Like the wise oldcrow has said you are free to take it or leave it. It doesn't mater what other companys do, this one does it this way and has even taken the time to now explain why. At the risk of repeating Holly, the VAT is a hit they take on UK sales which they are able to absorb since UK sales constitute only a small percentage of business. In my mind there is nothing unethical about this practice at all. It is a free market and they can decide how to run their business and what the cost of their product will be. I have no doubt that aero will continue to prosper off the back of their product and customer service, no matter how many non EU buyers wish to whine on here. The bottom line is that none of us (the customers) are paying VAT. For UK sales VAT has to be paid and it is aero who pays that.

 

[Deleted member 16736]

Having read Holly's response I think that's absolutely fine. The cost is the cost is the cost. Everybody knows what the price is before they buy and there are no hidden charges. Like the wise oldcrow has said you are free to take it or leave it. It doesn't mater what other companys do, this one does it this way and has even taken the time to now explain why. At the risk of repeating Holly, the VAT is a hit they take on UK sales which they are able to absorb since UK sales constitute only a small percentage of business. In my mind there is nothing unethical about this practice at all. It is a free market and they can decide how to run their business and what the cost of their product will be. I have no doubt that aero will continue to prosper off the back of their product and customer service, no matter how many non EU buyers wish to whine on here. The bottom line is that none of us (the customers) are paying VAT. For UK sales VAT has to be paid and it is aero who pays that.

Yes, we are paying VAT. Aero passes along the cost of the VAT in the aggregate to all of us, even those who shouldn't be charged any VAT at all. It's a subsidy. Whether an overseas buyers wishes to pay this subsidy on behalf of others is a matter for them to decide. But in any case, I don't think demanding honesty in your business dealings is whining, and I resent that remark.

 

[HoosierDaddy]

Yes, we are paying VAT. Aero passes along the cost of the VAT in the aggregate to all of us, even those who shouldn't be charged any VAT at all. It's a subsidy. Whether an overseas buyers wishes to pay this subsidy on behalf of others is a matter for them to decide. But in any case, I don't think demanding honesty in your business dealings is whining, and I resent that remark.

Yep..you are quite correct....and not alone concerning the whining remark.
HD

 

[Jeff M]

the VAT is a hit they take on UK sales which they are able to absorb since UK sales constitute only a small percentage of business. .

And that's where we disagree.
Aero and ELC don't take a "hit" , "absorb", "sacrifice" or whatever noble term those with a PR mind come up with next to explain the situation.
They set their prices so as to make a profit.
If the tax went up to 30%, they would raise their prices to cover it.
What they ARE doing is decreasing the additional cost that the tax adds to UK sales to UK buyers, while raising the cost of the item to non UK buyers....whose purchases are NOT taxed by the UK tax service.

You can disagree as to whether this is appropriate or not, whether it angers you or not, whether you think it's stupid people are upset about it or not...but lets be honest about what is going on.
"Absorb the cost".
Yeah.
Right.

Yes, we are paying VAT. Aero passes along the cost of the VAT in the aggregate to all of us, even those who shouldn't be charged any VAT at all. It's a subsidy. Whether an overseas buyers wishes to pay this subsidy on behalf of others is a matter for them to decide. But in any case, I don't think demanding honesty in your business dealings is whining, and I resent that remark.

Spot on.

 

[schitzo]

I don't think demanding honesty in your business dealings is whining, and I resent that remark.

Well, Joel there is no reason for you to presuppose that my remark - 'no matter how many non EU buyers wish to whinge about it here' - is referring to you or anybody else who has posted on this thread so far. If you aren't whinging then it doesn't apply does it. As for resenting my remark that's akin to telling me I've said something that is in some way offensive or uncalled for, is it not? in which case I refer you to Stephen Fry:

'It's now very common to hear people say, "I'm rather offended by that", as if that gives them certain rights. It's no more than a whine. It has no meaning, it has no purpose, it has no reason to be respected as a phrase. "I'm offended by that." Well, so ****ing what?' —Stephen Fry

Best wishes
Schitz

 

[ButteMT61]

Hey schitzo, why not pay my VAT too then?
I'll happily accept. Then I can buy another Aero.

 

[HoosierDaddy]

Well, Joel there is no reason for you to presuppose that my remark - 'no matter how many non EU buyers wish to whinge about it here' - is referring to you or anybody else who has posted on this thread so far. If you aren't whinging then it doesn't apply does it. As for resenting my remark that's akin to telling me I've said something that is in some way offensive or uncalled for, is it not? in which case I refer you to Stephen Fry:

'It's now very common to hear people say, "I'm rather offended by that", as if that gives them certain rights. It's no more than a whine. It has no meaning, it has no purpose, it has no reason to be respected as a phrase. "I'm offended by that." Well, so ****ing what?' —Stephen Fry

Best wishes
Schitz

Well..I don't care who you refer anyone to. Your whole post of explanation about 'absorbing' VAT was about as nonsensical and snarky as what has followed.
HD

 

[oldcrow82]

Yes, we are paying VAT. Aero passes along the cost of the VAT in the aggregate to all of us, even those who shouldn't be charged any VAT at all.

Exactly right, corporations don't pay taxes, the end user is the one who does.
My family owns an operates an agricultural spray business (crop dusting). Broken down in its most simplest terms, our airplanes need to generate $2000 a tach hour for us to pay corporate taxes, workmanship comp insurance, liability insurance, wages (taxes on those wages) utilities, maintence ect. If a new tax is proposed, let's say for example, oh I dont know, we are now forced to pay for employee health care, we still need to make enough of a profit to keep paying for all of the above to keep the doors open. If your following the logic train, our business just passes the cost on to our customers. In this case we would be talking about the cost of food.
Aero, ELC, or any other business passes on the VAT or any other tax we are talking about to the end user. If you want less of something tax it.
The only way Aero or ELC isn't charging us all a value added tax, is if they aren't paying a value added tax.
To be upset at aero or ELC over this is perplexing to me. And I understand in its entirety whether or not foreigners are having a VAT added to their totals. To me the problem is the VAT.

 

[SuinBruin]

I'm quite glad that my initial interpretation of the situation is spot on to how both Aero and ELC see it. The END PRICE in Europe is identical to the END PRICE in the US. EXCEPT in the UK both companies lose X amount to the government in VAT when selling to a UK buyer. That is what they mean by absorbing the cost. You in the US are not paying any more at all.

However, you should pay more for shipping, you are further away and it costs more. Though it should be proportional and realistic.

What absolute twaddle.

I'll just crib from my own post at VLJ.

Eastman and Aero charge x for a jacket. The tax man requires that y also be charged based on the value of x, but only for EU sales. So in the EU, x + y = total price.

For non-EU sales, the tax man doesn't require that y be charged. So the total price should just be x. But Eastman and Aero are still adding y, only instead of giving it to the tax man they're keeping it. So non-EU buyers are being "done out of" y, which is measured as 20% of x.

Let's put it in concrete terms. A new FQHH Highwayman from Aero is 620 pounds. Of that, 516.67 pounds is the retail cost. The remaining 103.33 pounds is VAT. (Divide 620 by 1.2 to get this result.)

Am I to believe that on average, it costs 103 pounds more to deliver the exact same jacket in the US versus the UK (not including shipping, which is separately charged)? Seriously? How is that even remotely plausible?

And if Aero is able to "eat" 20% of the cost of each jacket sold in the EU as VAT, then its margins must be pretty staggeringly high to begin with. A business that can eat 20% of the retail cost of its items and still be profitable is doing pretty amazingly well. I find it impossible to believe that pricing in the UK is so inelastic that any change in the VAT rate leads to no change in the total price charged. That's simply not credible.

Furthermore, Aero has apparently changed its pricing policies. Tonypaj has posted that he previously received VAT-discounted pricing from Aero when buying from Switzerland. Either he was receiving preferential treatment or Aero has changed its VAT policy. Neither reflects particularly well.

I guess that US jacket makers should start charging UK buyers sales tax but just keep it since it's not payable on overseas sales. Perfectly ethical, right?