FYI: Eastman and Aero including undisclosed upcharge on overseas sales

[Jaguar66]

While I find all of this discussion somewhat interesting, I have always considered that Aero jackets are high quality items, and underpriced compared to other high quality jacket makers. (consider Japanese items for example). They are at least 20% undervalued, probably more. If prices went up 20% to bring them up to an equavalent market value, (probably still under Japanese prices) and then reduced the item to non UK based clients (to back out the VAT), the overall price would be approximately the same, would it not? Perhaps that is what will happen so that Aero can "satisfy" its overseas customer base.

Just my opinion on the quality and value of Aero jackets and price of its products.

 

[ButteMT61]

But Jag, that's NOT the point. Never has been. It would be akin to Good Wear charging UK buyers Washington state taxes on jackets. They don't. But, if they didn't charge anyone taxes, UK buyers could say they're paying OUR taxes if Good Wear pays proper taxes at year's end. And they would be. Because no vendor is going to eat those costs - they're simply spread out to all with higher jacket prices.

 

[Jaguar66]

I do understand the point being made in this thread. I will still buy Aero. They are great jackets for the money. That is my point.

 

[ButteMT61]

I do understand the point being made in this thread. I will still buy Aero. They are great jackets for the money. That is my point.

And you know the facts now. You (we) didn't before. So you're at least making and informed choice. And that's fine if you or anyone chooses to do so.

 

[Kt Templar]

On the subject of prices not increasing when VAT rates are increased. The Govt are very savvy at this, they only increase VAT in small amounts over a long period. We went from 10% to 12.5% to 15% to 17.5%... back down to 15% back up to 17.5% and now up to 20% (this is over a period of something like 25 years mind you). Most of the time retailers (particularly the smaller retailers) did not change the VAT with each budget, the cost of changing all the sales literature, shelf strips and pricing labels made it even more costly to do.They would absorb the price until they had to increase the price next due to inflation (annually or by season) and it got bundled into that. If they didn't we'd be looking a prices like we look at stocks and shares!

For this example it really is not as simple as taking the UK price and chopping off 20%. It simply costs Aero and Eastman more to sell them to the US.

1) With higher credit card charges. (Something like 7% of the total bill goes to Amex for instance). UK buyers debit card costs to the retailer can be as low as 20p/30¢.
2) With credit cards giving poor exchange rates (typically with paypal I get 1.50 to the pound when I should be getting 1.56 at the moment).
3) The aforementioned, average larger footage on US jackets.
4) The higher maintenance nature of order to the US.

And lastly I'm pretty sure I get charged the Federal sales tax even though I've had US companines remove the State sales tax.

I do feel a lot of the annoyance felt here is the way both of our countries' consumers have been brought up to understand tax as the price on an item.

In the UK the price of an item is X vat inclusive, ie a hypothetical £9.99. "How much did your greeblie cost?" "Oh, it was a Tenner".

On the US you seem to ignore the tax when asked prices.

"How much did your greeblie cost?" "Oh, it was a Ten bucks". NOT ten dollars plus tax.

 

[wdw]

Given the strength of feeling from the US members, I can't help but think that the only outcome from this will be increased prices, VAT deductions for overseas customers, hefty overseas carriage charges, no free returns, new charges for modifications and also price increases for the larger sizes. At least that would then better reflect the true costs involved in individual jackets and more importantly the tax burden.

I've no problem with that, as I think that the Aero prices are incredible value for money, even with a 10% increase. It would also be fairer in that those who buy pretty much off the rack would then not be subsidising those who make mods or who demand FOC fitting tweaks involving free returns. Given the 13-16 week waiting list, a price increase might also reduce waiting times. They could even introduce a queue jumping charge for those prepared to pay for quicker delivery.

In comparison, I see the new Belstaff site is charging around £1,100-£1,600 for their tissue paper leather jackets, with some sheepskin ones at over £4,000.

 

[GriffDeLaGriff]

Wait, so does this mean that I already buy stuff "without VAT" in the end?
Menaing that if they had to change the policy to include or subtract the VAT, then my jacket will cost more since its overseas?

As i said earlier, it isnt just 20 or 25% anymore for us overseas, the total package comes to 40% more. In this package is the fee they take for taking it through customs for me. So its basically DHL´s fee + shipping + baseprice + 25% and that became on my last jacket a 40% increase from the baseprice I payed Aero on my creditcard.

I dont care about paying Aero 20%, but I cannot pay DHL/Government 40% of something I buy for myself, this just is not right. Every fiber in my being says its crazy.

The sucky thing about all this is why the 25% is there in the first place. As I understand it its there so that not everyone buys stuff from other countries thus making the native shops not sell anything. I can go along with that if I buy something overseas that they also sell here. But they dont sell Aero here, and nothing comes close to it, so therefore Im just paing my government money for nothing!

 

[wdw]

Without knowing Aero's specific accounting practices, I am sure that the one fact is that any UK sales will include 20% VAT, which will be passed on to the government. Sales to other EU countries may or may not have VAT-equivalent deductions depending on any arrangement with the purchaser, but any deductions would then require the buyer to ensure that their local equivalent tax was paid at their end. If the local equivalent is within a few percent, then most people probably wouldn't bother with the extra hassle, as as long as tax is paid somewhere within the EU, then that's all that's required by law.

Sales outwith the EU will be at the price quoted and therefore agreed by the purchaser and would not be subject to VAT, but that would be the base price against which any import duties and charges are paid. I suspect that once the dust settles here, prices will rise to fund the necessary VAT deductions. Griff, you and the Americans will then get a transparent VAT deduction of the 20% equivalent, but that will be partially offset by delivery charges and possible modifications charges. You should still be better off, but almost certainly not by anything like the 17% people may have initially assumed.

Griff, if you're paying 40% or about £250 per jacket, it must be worth your while to have a short break to Scotland to pick the jacket(s) up and avoid paying any fees in Norway. I gather that's done quite often. As you'd have bought it in the UK, you'd have to pay the VAT, but you could then reclaim that on leaving the country and it would be up to your conscience whether or not you declare it in Norway. You could easily get it at £525 at today's prices.

 

[GriffDeLaGriff]

I know of a couple of different things I can do to avoid the 40%. All of them are grey areas.

Flying back and forth will cost me about £270 so its really not an option.

This 40% only happened on my last jacket that came with DHL.
All my other jackets came with UPS and there were only about £100 extra so I never bothered Aero with questions about VAT.

I have bought other stuff without VAT before, and usually it is no big problem, but there were a 1-man company who said there were alot of paper hassle for him so eventually I just got the item for free. THis is why I never bothered Aero with it. But after my last purchase i saw (and I think you agree) that its no longer an option to just buy and pay. I was gonna ask Amanda about this for my next jacket but this thread came up just before I managed to send a question.

 

[schitzo]

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

Sure buddy. Just let me know where to where to send the cheque

 

[cloudylemonade]

With retail technically VAT is NOT paid by the buyer although a portion of the price paid 15%/17.5%/20% has to be paid to HM Customs by Aero regardless if we allow extra in the price to cover it or pay it ourselves,It's yet another tax in this already heavily taxed country no different than any another UK tax such as Corporation Tax, Business Rates, National Insurance Contributions, income tax etc.

Although we have to pay this tax (VAT) on every UK sale it is illegal to show it a a proportion of our website price list and there is no legal obligation to show the amount we have to pay as VAT a separate charge on a retail invoice. We can just enter the price paid if we wanted to with no mention of VAT.

The only reason we list the VAT portion on the invoice separately is to simplify the three monthly accounting we must supply HN Customs & Excise.

 

[wdw]

Possible scenario - current price of a jacket to the USA -£630. New price to include nominal uplift for general VAT deduction - £660, less £110 VAT = £550, now excluding delivery. Add say £40 delivery, £20 arm/hem length adjustment, £20 each for two G1 pockets, £10 for a corduroy hem strip and specifically no alterations without further charge or returns costs. New cost to USA = £660, plus any further alterations charges.

Whilst that still sounds very reasonable, it also sounds a lot more hassle and risky if you don't like the fit and want a further alteration, not to mention more expensive anyway.

I totally understand the initial point and the concerns raised, but this is a can of worms which could end up counterproductive for those who aren't a standard off the rack size and who like their mods, as many people here seem to (myself included).

 

[HorseHide]

I totally understand the initial point and the concerns raised, but this is a can of worms

Consistent with a number of other topics on this forum...

 

[hpalapdog]

Without knowing Aero's specific accounting practices, I am sure that the one fact is that any UK sales will include 20% VAT, which will be passed on to the government. Sales to other EU countries may or may not have VAT-equivalent deductions depending on any arrangement with the purchaser, but any deductions would then require the buyer to ensure that their local equivalent tax was paid at their end. If the local equivalent is within a few percent, then most people probably wouldn't bother with the extra hassle, as as long as tax is paid somewhere within the EU, then that's all that's required by law.

In the EU the VAT is levied in the country supplying the output not in the country of destination.
If somebody in another EU country is VAT registered they can give their number to the supplier and receive the exports without VAT.
When they file their VAT return this import is chargeable for VAT but is also a reclaimable business input.

 

[Equality 7-2521]

I know of a couple of different things I can do to avoid the 40%. All of them are grey areas.

Flying back and forth will cost me about £2700 so its really not an option.

This 40% only happened on my last jacket that came with DHL.
All my other jackets came with UPS and there were only about £100 extra so I never bothered Aero with questions about VAT.

I have bought other stuff without VAT before, and usually it is no big problem, but there were a 1-man company who said there were alot of paper hassle for him so eventually I just got the item for free. THis is why I never bothered Aero with it. But after my last purchase i saw (and I think you agree) that its no longer an option to just buy and pay. I was gonna ask Amanda about this for my next jacket but this thread came up just before I managed to send a question.

I believe you mean 270£?

Possible scenario - current price of a jacket to the USA -£630. New price to include nominal uplift for general VAT deduction - £660, less £110 VAT = £550, now excluding delivery. Add say £40 delivery, £20 arm/hem length adjustment, £20 each for two G1 pockets, £10 for a corduroy hem strip and specifically no alterations without further charge or returns costs. New cost to USA = £660, plus any further alterations charges.

Whilst that still sounds very reasonable, it also sounds a lot more hassle and risky if you don't like the fit and want a further alteration, not to mention more expensive anyway.

I totally understand the initial point and the concerns raised, but this is a can of worms which could end up counterproductive for those who aren't a standard off the rack size and who like their mods, as many people here seem to (myself included).

I completely agree with your last statement.

 

[ForestForTheTrees]

It's up to each individual consumer to decide whether or not you wish to support Aero/ELC. You best make your point with your purchases, either through these businesses, or through their competitors. In the end, actions speak louder than words.

 

[wdw]

Thinking this through, Aero seem to have adopted (by accident or design) a simplistic one-size-fits-all pricing structure which undoubtedly benefits those who like mods and insist on rework, particularly if they live overseas, to the disadvantage of those who fit off the rack and don't bother with mods. Whilst the overseas VAT issue is valid, it would be equally valid for those who're happy to take the standard pattern with no changes to complain about why should they subsidise everyone else.

Everyone, particularly the modders and fussy fitters, seemed to be more than happy with the pricing and customer service until now, but this focus on one negative issue (for some) has soured the atmosphere with the possible result that no-one, except Aero through future higher risk-free pricing, will benefit.

I analyse supplier cost and pricing on a daily basis, and this wouldn't be the first time a seemingly quick win for a client has forced a supplier to review their cost base and realise that far from reducing prices, they can actually legitimately increase them.

 

[GriffDeLaGriff]

I believe you mean 270£?

Correct. Sometimes its not easy to keep up with pounds, dollars and also my own currency NOK

//correcting the original post

 

[ButteMT61]

Consistent with a number of other topics on this forum...

I'd rather people discuss things and learn than not. It's been civil. If you don't like, the topic, don't read or post in it. Simple. As has been said, what we really ALL should be pissed at is the ridiculous rates of taxes we pay. Good lord, we need some crates of tea and a few cannons! Besides, most of us can't wear jackets now so why not pass the time with those who do? Clearly, nobody is going to agree on the outcome. The only true say you have is with your dollars. Keep 'em or spend 'em. That works in the end.

 

[too much coffee]

Hi Butte...Good Morning.
Well my headache has passed. Very good synopsis of the recent taxation discussion. It's like Governmental politics......do your due diligence and cast your vote for the candidate that fits your idealistic views. Regardless of the election outcome, by participating with his vote, the voter can say "I've done all I can do."

I will say that I can empathise with our founding fathers about garnishing support for the "taxation without representation" theme. Not everyone is going to think as one and certainly not act as one. It's impossible to get everyone on board. Like you said......."The only true say you have is with your dollars.......That works in the end."

Regards,
coffee


Edit: I'm not drawing a correlation with the taxation w/o representation quote to the Aero tax discussion, only as an example of attempting to solicit support for a scenario; any scenario.