FYI: Eastman and Aero including undisclosed upcharge on overseas sales

[SuinBruin]

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.

Please, just stop. This quote shows two things: one, you don't know what you're talking about ("Federal sales tax"... hoo, boy, that's a good one), and two, you are a hypocrite. You "had US companines [sic] remove the State sales tax," but then try to justify UK companies charging the full VAT-inclusive price to overseas buyers who aren't liable for the tax? Sound like your tax-discounting philosophy is "for me, but not for thee."

I'm sure all of these people defending Aero and ELC would have no problem whatsoever with Good Wear or Flight Suits adding "sales tax" to their transaction but then just keeping it instead, right? Perfectly fair and ethical?

 

[cloudylemonade]

I'm sure all of these people defending Aero and ELC would have no problem whatsoever with Good Wear or Flight Suits adding "sales tax" to their transaction but then just keeping it instead, right? Perfectly fair and ethical?

Whether you believe what I've repeatedly told you or not, we are not 'just keeping' VAT. As I have explained as we have a small percentage of sales in the UK we reduce the VAT rate from our profit margin/costs for sales here in order to keep our prices competitive and at an affordable price to ensure we've not priced ourselves out of the UK market. I cannot understand what is so unethical about this. Surely it is within our rights to 'suffer', or as some have put it 'take a hit' for these sales?

 

[SuinBruin]

Whether you believe what I've repeatedly told you or not, we are not 'just keeping' VAT. As I have explained as we have a small percentage of sales in the UK we reduce the VAT rate from our profit margin/costs for sales here in order to keep our prices competitive and at an affordable price to ensure we've not priced ourselves out of the UK market. I cannot understand what is so unethical about this. Surely it is within our rights to 'suffer', or as some have put it 'take a hit' for these sales?

If we accept this premise, then overseas buyers are subsidizing the UK market, which I find not only unfair but utterly bizarre, since the Aero web site appears directed primarily at the domestic market (priced in pounds, e.g.).

Two, since VAT is payable not only on UK transactions but on those throughout the EU, I find it very, very difficult to believe Aero takes a hit on every direct sale it makes across the EU.

Three, while you have claimed that Aero's policy has always been to not discount VAT, the experience of one poster here (tonypaj) belies that assertion. I'm afraid that leads to a credibility gap, particularly when we're talking about an undisclosed policy of charging different retail (pretax) prices based on the buyer's location.

Four, you were obviously willing to sell to the US VAT free through Mark Moye, and I'm guessing he wasn't charged full retail, either. Which means that Aero is capable of making a profit on overseas sales without a faux-VAT markup.

I'm sure it has been nice to realize that your products are so in demand that people outside the EU have been willing to pay the VAT-inflated price without even thinking about it. It's also a nice bonus to the bank account. But just as you have the right to charge what you want for your products irrespective of what I or anyone else thinks about it, people also have the right to know what goes into that pricing. Coming from the US where sales tax is always added to the retail price at the time of sale, it is difficult to conceive how it can be deemed "fair" to charge a tax-inflated price on tax-exempt transactions. But each person will have to decide the question for him- or herself. All I'm offering are the facts as I understand them and my personal opinion based on those facts. People can consider or discard them as they see fit.

 

[Jeff M]

Whether you believe what I've repeatedly told you or not, we are not 'just keeping' VAT. As I have explained as we have a small percentage of sales in the UK we reduce the VAT rate from our profit margin/costs for sales here in order to keep our prices competitive and at an affordable price to ensure we've not priced ourselves out of the UK market. I cannot understand what is so unethical about this. Surely it is within our rights to 'suffer', or as some have put it 'take a hit' for these sales?

At the end of the year, your accountants tally up the income from sales, calculate what % of that is subject to the VAT, and sends the resulting amount off to the tax man.
That number is (Income from UK sales) X 20%.
The % of income from non UK sales is not charged 20% VAT.

Your pricing does not reflect that fact.
The reason this is an issue is;

1) When I purchase other items from the UK either on line or during my visits there, I am refunded or not charged the VAT.
2) When asked to clarify what the company policy is, the answers have been misleading. THAT"S the part that is "unethical" to me.

I can understand the logic behind ELC's and Aero's pricing structure. That doesn't change the fact that I am in affect paying a portion of the VAT on UK customer purchases.
Some folks may be turned off to the pont where they refuse to purchase ELC and Aero products because of this. Some may not. It's a bit like some folks refusing to purchase products manufactured in different countries. It's individual choice.
But at least make the policy clear so people CAN decide.

 

[wdw]

To me the concerns of SuinBruin, Jeff and others are entirely well-founded if Aero were simply a retail outlet selling off-the-rack.

The reality is that, as the manufacturer, they accommodate countless requests for non-standard modifications and have chosen to adopt a flat-rate pricing policy to cover that.

Yes, non-EU buyers may be seen to subsidise EU buyers, but equally EU off-the-rack buyers contribute towards others who want a different hide, altered sleeve and body length, hem strips, different lining, different zips, different pockets, no storm cuffs, extra pockets, one-piece backs etc etc, then after all that decide they want it returned and further altered at no extra charge.

If Aero want to maximise profits, they should give non-EU off-the-rack buyers the VAT deduction so that they save overall, but then they should equally charge a realistic price for every deviation from the basic pattern.

Given the 13-16 week lead time, I'm fairly sure Aero could up their prices and still maintain current profitability.

 

[SuinBruin]

Does Aero discount VAT on non-jacket orders for products they don't make themselves (denim, etc.)?

Does Aero discount VAT on off-the-rack orders (preexisting jackets or standard OTR sizes with no mods)?

Likewise, does ELC discount VAT on its Buzz Rickson sales?

I suspect not, but if there is information to the contrary I would invite anyone who has it to share.

 

[Kt Templar]

How i understand it. You have 2 type of sales tax. One levied by your State and one levied by the National Government, no? When you buy across state boundaries you can avoid State sales tax, no? Please explain if I have misunderstood.

Is this not the model you are trying to apply to Eastman and Aero? This is the model that 'x' leather jacket company sold to me, and I can only accept that it is the norm. They told me that the federal sales tax part (whatever the heck it's called) was not negotiable.

They could just as well have said, "No, sorry, with the extra paperwork this sale entails we have to charge you the same as domestic plus tax to cover the extra overhead".

The muddying of this argument from the US side comes from the way you are used to being charged your tax as a separate payment. In the UK the Retail price is inclusive and the retailer pays that tax on your behalf. That's why the price for the Real Deal, for example, is listed as £450 and not £540.

And BTW. I have never bought anything from either Aero nor Eastman so there is no brand loyalty from me for them.

 

[PADDY]

Gents - you have 15 pages of information and discussion to make an informed decision on this topic. If you feel so disposed, then you are at liberty to contact the manufacturer's directly 'before' making that final decison to purchase one of their jackets from wherever in the world you reside.

There is also the same discussion on VLJ:
http://www.vintageleatherjackets.org/viewtopic.php?f=5&t=12850

I'd just like to thank Aero (Scotland) for taking time out from their Annual Fortnight Holiday (which they routinely have every year - so, Holly took time out from 'her own' vacation to reply) to acknowledge some of the members on TFL. She didn't have to do that, so 'credit' where it's due folks.

At the day's end, you do your research with what you want to buy, who you want to purchase from and what you are prepared to pay and then...you make a decision one way or the other.

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