Distributors what they do for us

[Minion]

i was in the UK last year. Specialized bottle cages at Evans cycles (big retailer) 8 pounds.... cheapest i'v seen them here = R 235-R 275. Specialized long fingered gloves 24 pounds.... cheapest here R460 - R500 plus...!!!??? Butt rogering on Specialized goods in SA.

Go price a bike on www.racycles.com and then get the RSA price. For exampe a cervelo s2 is 45k here and the same spec is 28k in USA.

Do these prices account for import duties and VAT?

 

The bottle cages look overpriced, but once you add 45% to the cost of the gloves for import duties, they come in close to R450.

 

Once you add duties and VAT to the Cervelo, it comes out closer to R37k. Bad, but not as bad.

[DJR]

The first thing the local distributers (and some shops) should do, is to sell everything with a complimentary tube of KY jelly, it will at least make the shafting we take from them easier.

[covie]

lol edam do you think there are no import duties and taxes in the US and UK? sure if our LBS's bought from other overseas LBS's your statement would make sense.

 

What that tells us is that we are being ripped off by 100% over a justifiable profit margin on any product.

Edited January 6, 2011 by covie

[Guest coenie]

This is the reply I got...

 

apparenly being down for 4 days in Africa is not a long time

 

"Once again, I do apologize for the inconvenience this has caused. It affects us as much as everyone else and is certainly not a deliberate act. I don't expect for everyone to understand our processes but we were not anticipating to be down for so long and this has been an unfortunate situation we are trying to amend ASAP."

 

ASAP will mean what? Another 4 days?

[Guest coenie]

lol coenie I dont get your last post, I was being sarcastic saying that they could not give a flying @#$ about servicing their customers since it would cause a minor inconveniance to have the records updated after the fact.

 

 

I was being "funny" also...I fully agree with you.

[Pappa Bear]

Thats not difficult to figure out. On-line business will complicate the distributor agreement in terms of regions defined and fair play commissions. How does one regulate the geographic market scope once one goes in to cyberspace (the global market)

 

We are in the global market since the invention of the INTERWEB....... that is why we buy from CRC and CWC

[divernick]

I'm certainly not defending some prices around here. But check what that you admit to the size of the retailer. These guys probably sell 100 units for every 1 sold here. They are in a position to negotiate on volume and secondly on total order value per annum. No LBS take the initiative nor do they have the capital nor do they have the market to negotiate these order volumes. Its not comparing apples to apples.

 

Then consider the product once it gets here.

There are logistic costs (forwarding and clearing) which are high in RSA. Once destuffed the next cost is local freight costs between distributor and LBS. Importantly also look at the interest rates here related to business finance and warehousing. All of this has to be covered in a reasonably high GP by the distributor and the LBS.

What are the terms? COD? 30days 90 days 120 days? all makes a difference to the price you are going to get it for.

 

The same situation is true for all sporting and other goods imported into SA from overseas. The distributors here pay for shipping and clearing and are contractually bound to purchase a certain amount of product from the manufacturers. They have a minimum GP that they feel they have to make and sell at this price to the LBS, who in turn has to make a certain GP to survive. In SA we have one too many people in the chain of supply, ie the distributor. This is why we pay between 20 and 50% more for stuff here than is available overseas or from sites like CRC.

 

I used to own my own dive centre and the exact same was true in that industry.

 

I am in favour of the "global market" theory and retailers should be allowed to buy from the manufacturers. I can see how this could be challenging in SA due to our difficult logistical situation, hence the succes of online shops. We sit in a difficult situation in SA, where it's very tough to survive as a retailer. I couldn't survive in scuba retail so I quit that game.

 

I also don't think that there's any easy answer to this problem....

[urbanroyal]

Being ripped off is a national pastime it seems, from recycled chickens, powerbands etc, and these guys are making a killing...comparing prices on overseas websites and going into a store and seeing our prices ...eish and dont let me start on the prices of our cars... eina..

[Minion]

lol edam do you think there are no import duties and taxes in the US and UK? sure if our LBS's bought from other overseas LBS's your statement would make sense.

 

What that tells us is that we are being ripped off by 100% over a justifiable profit margin on any product.

I believe their Specialized gloves come from the EU distributor (as do ours), so they wouldn't pay import duties (otherwise, duties would be 12%). Their VAT of 17.5% is roughly comparable to what our import VAT works out to, so this doesn't need to be added. Adding 45% to the UK price then accounts for our clothing duties.

 

Depending on the spec, R&A in the US would likely pay close to no import duties on the Cervelo and their price does not include VAT so, adding 32% (combined VAT and duty for complete bike) to R28k gives R37k.

[Guest coenie]

lol edam do you think there are no import duties and taxes in the US and UK? sure if our LBS's bought from other overseas LBS's your statement would make sense.

 

What that tells us is that we are being ripped off by 100% over a justifiable profit margin on any product.

I was thinking the same thing....I have also decided that from now on "name and shame" I sent the link to this threat sean at lepeloton....so they can see how we feel.....

[Bat-ass]

These goods arnt made in the UK or US.. they made in China... The UK and US ditributors also have to pay forwarding and clearing, and duties for there country.

[Slowbee]

import a car ?

 

 

 

[Bat-ass]

sorry Coenie... our posts were making the same point and posted at the same time!!

[Tumbleweed]

Their VAT of 17.5% is roughly comparable to what our import VAT works out to, so this doesn't need to be added.

 

I read they want to up it to 20%.

[Minion]

I read they want to up it to 20%.

It went up on Tuesday this week, so it wouldn't apply to price comparisons from last year.

[Guest coenie]

Guys, lets not worry about where is comes from or how much extra we are paying...don't get me wrong it irritates me too....

 

BUT my current RANT is the lack of service and attitude that the distributors have...they have the stock but will not release it? Because they have not idea how to do a stocktake and capture manual invoices?

 

Hence why do we need them....I would rather have CWC tell me, we will only have stock in 2 weeks than this nonsense

 

Spezialized, I am not getting that 29er from you any longer....will get another bike...not like you care anyway....