[CMOTD]

With the recent problems at SCX the supply of spare parts in the UK has been virtually non-existent so, having a need to buy some RX42B motors, I have been obliged to look further afield for supplies.

Now, even if they were available, I would need to pay in excess of £12 for one in the UK. I have just bought some from the USA for £7.20 each, including shipping from the other side of the Atlantic. Moreover they arrived on my doorstep in just 5 days which is better than some UK suppliers can manage.

So who is making an excess profit here then?

Anybody know a US supplier of SCX NASCAR rear axles and tyres?

 

[StuBeeDoo]

I wouldn't say no-one's making a bit extra profit, but it's probably to do with exchange rates. There'll be 2 exchange rate conversions on stuff bought from US sellers. I don't know what difference it will make, but it will make a difference.

I've noticed that SCX stuff from the USA is cheaper, though, and I've taken advantage.

 

[Julian_Boolean]

Brian at SCX USA can supply SCX parts for most cars.

 

[CMOTD]

QUOTE (StuBeeDoo @ 25 Jul 2012, 19:53) <{POST_SNAPBACK}>It's probably to do with exchange rates. There'll be 2 exchange rate conversions on stuff bought from US sellers. I don't know what difference it will make, but it will make a difference.

Sorry, don't buy the exchange rate argument. SCX presumably price in Euros and that currency is weak against both the dollar and sterling so should be just as cheap for us to import from Spain. The pound is also down against the dollar so that makes buying from the USA more expensive for us.

The rrp of normal SCX cars in the UK is, to all intents and purposes, £40. In the USA it is about $45 which equates to £30. Yes, there are deals to be had on both sides of the ocean but exchange rates can never account for a £10 difference in the basic retail price.

I doubt the UK dealers have a higher profit margin than the American ones so that means either the manufacturer, distributor or both are overcharging the UK market.

 

[Ember]

Have you made allowances for variations in taxes and the like?

I think you're probably pointing the finger needlessly. Manufacturer and distributor won't be 'overcharging' as you put it. Costs are higher in Britain and the little increase required to cover the variations have to be taken into account on every step of the supply chain. The price of warehouse space, the price of transporting product, the price of power. Each thing may only have a small extra cost in individual comparison but they multiply with each move that a product makes.

If you run comparisons on everything from property, to fuel, to the price of a steak or a bottle of wine, you'll quite probably find it's cheaper in the US. We suffer the same problem in Australia. Countries' economic systems are set up to accommodate their citizens. The fact is that they were set in place before the ability to move things from one economy to another.

But if you investigate to the baseline of the citizenry I think you'll find that it levels out somewhere along the line. In the US it seems to happen when one is in trouble and in need of support and none exists.

It certainly means that currently you have the ability to take advantage of the system differences. And it's up to each individual to decide if they should.

Embs

 

[CJA]

G'Day Ember.

Do you know, when I started one of my businesses, importing mining gear from Australia to the UK the ER was 2.7 : 1.

That was 2.7 Aussie dollars to 1.0 GB £.

Today that stands at 1.5 : 1.

Now, I have made no bad decisions, no bad judgements, and a good product for which the demand is strong.

But, by virtue ( ?? ), of Bill Clinton policy, and UK Gov uselessness, I am now making £80k less per year.

Positive comments only please.

All I am saying is, get your pathetic winging about the price of a slot-car in perspective !! Eh ??.

vbr Chris A.

 

[Ember]

Excuse me CJA, sir, but I think you should direct that comment to CMOTD rather to myself as he was the one whinging, not I. I was merely endeavouring to offer just one line of reasoning as to why the price differential exists.

In fact. Although I can't afford to purchase them due to my current personal circumstances, I think we are rather spoilt with the low prices of slot cars at the moment. And, if you look historically through my posts you will notice that it is an opinion that I have voice often when 'pathetic whinging' about slot car prices comes about.

Embs

 

[stoner]

Thats the free market for you Embs, It not MORALLY wrong to take advantage of it. People make billions, trading on exchange rates. A few years ago the dollar was 2-1 and i got all my parts from the states. i still do coz it works out cheaper even with p&p on top. the Euro,s heading that way too. john

 

[Ember]

Indeed John, that's why I said it was up to each individual to make up their own mind on it. But it must also be noted that unsupported local outlets can not survive.

If there is little manufacturing sector because it's moved off shore at least partly due to our demand for cheap goods and there is little retail sector because it has moved offshore due lack of consumer support there is a large slab of employment opportunities that are gone.

Embs

 

[Pendleslot]

From a dealers perspective there are many reasons why this particular item may be so much cheaper from overseas.
I'm sure the OP knows exactly how the distribution / retail supply chain works and what type of mark ups are common.
But there can be mitigating circumstances and ligitimate reasons for extreme variance in pricing.
Possible reasons could be:

Exchange rates do fluctuate and do have an impact on pricing.

Shipping costs from manufacturer to distributor. China - USA direct, China - Spain - UK is more expensive.

Manufacturers also price their products more/less expensive for different markets, if for example SCX want to sell into a particular country they may offer more favourable pricing to that distributor, we also see a varying degree of mark up from distributors which also effect end prices.

Overstock by the distributor, being released to the shops at reduced prices.

Is the part unpackaged, ie not blister packed as released by SCX? if so the motors could be stripped from cars which were released cheap into the USA, or even cars returned as seconds. If the supplier Brian used is stripping cars and selling parts separately it is quite easy to sell parts at knock down pricing.

Buying from the US, i presume the dealer also deducted sales tax for you, just as we do for overseas customers outside of the EU, this has a dramatic effect on the end price customers pay, if we were to deduct VAT from a £12 motor - you would pay £10.

It is not so very long ago, you could have (and possibly did) purchase any amount of COMPLETE cars at £10. All due to stock being off loaded by SCX to the UK distributor. I didn't hear too many complaints then that the prices were too cheap.

I really don't think this is a case of 'rip of Britain'. Just an example of something that happens to be cheaper elsewhere, as a results of one or more of the above reasons.

Sean

 

[CMOTD]

Thanks for your insight Sean. Please note that I wasn't criticising dealers like yourself who generally give an excellent service at the best price within their control.

In answer to a couple of your points: the motors I bought were brand new in blister packs, not split from cars. The Americans generally do not remove sales tax for overseas transactions and didn't in this case. I paid exactly the same price as a US resident.

Their sales taxes are many and complicated but, overall, slightly less than ours. However, although your points are valid they do not explain such huge differences in price. I can buy these motors at any number of USA stores for the dollar equivalent of £5 - that is half the cheapest on-line price in England! Of course, a supplementary question might be, "How come UK dealers have nil stock of SCX spares while they are in abundance overseas?"

CJA, Sorry for my "pathetic whinging" although I thought I was raising a valid concern. I will, of course, make every effort in future to pay the highest price possible for my slot car purchases. I will also cease to pay my window cleaner in cash as that is morally wrong.

 

[Pendleslot]

Brian, thanks for the clarification.

In this case i would suggest that either:
Overstock by the US distributor, being released to the shops at reduced prices.
or
Manufacturers also price their products more/less expensive for different markets, if for example SCX want to sell into a particular country they may offer more favourable pricing to that distributor, we also see a varying degree of mark up from distributors which also effect end prices.

Apply in this case.

FYI. As a dealer of SCX my trade price to purchase these motors - assuming stock was available is more than the price you are paying from America, then we pay VAT on top !
As for no stock available in the UK at the moment, i think that is for the UK distributor to answer.

Sean

 

[stoooo]

QUOTE (CMOTD @ 26 Jul 2012, 08:15) <{POST_SNAPBACK}>The Americans generally do not remove sales tax for overseas transactions and didn't in this case. I paid exactly the same price as a US resident.
That's actually wrong. Internet retailers in the USA only charge sales tax on sales made within their own state. If you buy a product from a vendor in Iowa, but you live in Florida, where the vendor has no business presence, you do not pay Iowa sales tax on that transaction. You are expected to declare this transaction on your State tax return and pay the appropriate amount of Florida sales tax for that transaction. But very few people do, which is why internet sales have proven so popular. Of course, instead of paying sales tax you have to pay the shipping fees.

Sales to overseas buyers should *not* include any sales tax. However, UK customs and excise may demand their cut before handing over the goods. And some vendors (Amazon.com springs to mind) add on the expected UK duties and taxes at the time of sale to avoid any unpleasantness with UK Customs. This takes the fun out of the will-they-won't-they game.

QUOTE (Pendleslot @ 26 Jul 2012, 08:28) <{POST_SNAPBACK}>As a dealer of SCX my trade price to purchase these motors - assuming stock was available is more than the price you are paying from America, then we pay VAT on top !
Why are you paying VAT ? Surely your turnover warrants being VAT registered. As such, you should be claiming the VAT back. VAT is a consumer tax, and a business should only be paying VAT on what it consumes, not what it resells. If VAT was due at every step along the supply chain, then the amount of VAT would soon push the price beyond sustainable levels.

 

[stoooo]

QUOTE (Pendleslot @ 26 Jul 2012, 08:28) <{POST_SNAPBACK}>Manufacturers also price their products more/less expensive for different markets, if for example SCX want to sell into a particular country they may offer more favourable pricing to that distributor, we also see a varying degree of mark up from distributors which also effect end prices.
Sorry, I forgot to comment on this bit, which is the epitome of 'Rip Off Britain'. SCX knows that the Americans will only pay so much for a product, and prices it accordingly. They know that Brits might complain, but will still part with their cash at a higher level, so they price it differently in that market. Such is the nature of business; businesses exist to make a profit. Without profit, a business will close and the people involved will go off and do something else with their time. You can't blame businesses for trying it on in this way.

The only way around this is to not buy a certain company's products. Look how quickly the new Racer Capri sold out. Look at the buzz the car has created for a manufacturer that is probably little known outside the hobby. How much are their future products now being anticipated ? £50 for a car that works *that* well ? What's not to like ? This product represents good value for money. Now look at the Ninco 1 range by comparison. How do we view the *value* of those cars with the likes of Racer in the marketplace ? Now, if the Ninco 1 was priced at £20 per car, they would probably sell out in a real big hurry, too. But most of the comments I see on here about those cars are along the lines of, "They're nice enough, but why are they so expensive?"

Interestingly, a quick look on the slot32.de site shows the Racer Zakspeed Capri currently priced at €65. This is in line with the £50 it has been selling for in the UK. But they also show the upcoming Mampe version at a fraction under €50. Will that one be priced at £40 in the UK when it arrives ? If not, why not ?

 

[Ember]

QUOTE (stoooo @ 26 Jul 2012, 19:51) <{POST_SNAPBACK}>Sorry, I forgot to comment on this bit, which is the epitome of 'Rip Off Britain'. SCX knows that the Americans will only pay so much for a product, and prices it accordingly. They know that Brits might complain, but will still part with their cash at a higher level, so they price it differently in that market. Such is the nature of business; businesses exist to make a profit. Without profit, a business will close and the people involved will go off and do something else with their time. You can't blame businesses for trying it on in this way.
Part of the premise here is incorrect. I think America is seen, largely, as a huge relatively untapped market. On the slot car side of things 1/32 still makes up a relatively small portion of slot car sales. So many savvy manufacturers are aiming at cracking the US market. SCX, and more lately Carrera have been directing things toward this end. Perhaps Dave Kennedy is much to do with recognition of both manufactures of the US potential. Pioneer, when manufacturing, are also obviously aiming at the American market with their choice of models.

Embs

 

[stoooo]

OK, generally speaking, Americans will only pay so much for certain products. Look at how much they howled and complained when petrol hit $4/gallon a while back. At that price, many of them were trading in their V8 motored SUVs for small import cars and hybrids. Fuel prices have dropped back, and the US motor industry is once again safe for the time being.

But, it is often quite amazing what Americans are willing to spend on some things. It takes 'Keeping up with the Joneses' to a whole new level.

So the US distributor is trying the crack dealer marketing method ? Get 'em hooked, then jack up the price. But then, shouldn't the first one be free ?

 

[Pendleslot]

QUOTE Why are you paying VAT ? Surely your turnover warrants being VAT registered. As such, you should be claiming the VAT back.

Yes, of course we are VAT registered. My point was that when i purchase something from a UK distributor my purchase price is trade plus VAT. So yes i do pay VAT.
We do then claim VAT back which is paid out for purchases but then we pay HMRC VAT collected on their behalf for everything we sell.

QUOTE Interestingly, a quick look on the slot32.de site shows the Racer Zakspeed Capri currently priced at €65. This is in line with the £50 it has been selling for in the UK. But they also show the upcoming Mampe version at a fraction under €50. Will that one be priced at £40 in the UK when it arrives ? If not, why not ?

I doubt many places in the UK will sell it for £40, although it is an acheivable price. We advertise this car at £45, which could be reduced to £40.50 for Slot Forum plus members 10% discount.

Sean

 

[chris99]

QUOTE (Pendleslot @ 26 Jul 2012, 11:22) <{POST_SNAPBACK}>I doubt many places will sell it for £40, although it is an acheivable price. Time to throw in the joker:
It's academic but my local (Toulouse) supplier has the Capri in stock for £37. Most of the premium brand cars are cheaper than anywhere else. (eg Slot it £33, NSR £46).

That said, they run it as a spare time hobby out of a little caretaker flat and I think they benefit from low turnover small company tax advantages which they pass on. Although it's mail order you can just phone them & call by (post to the UK would rule out any benefits for you guys though). I don't know how they get good wholesale prices though.
It's a cute cottage industry operation with all the stock piled up in the hallway and in every crevice in amongst the kid's toys.

So there's the challenge in the UK for someone to set up a small back-room operation without company overheads.

 

[Pendleslot]

No tax, no vat, no over heads, no wages, no rent, no rates........ sounds like heaven

 

[stoooo]

QUOTE (Pendleslot @ 26 Jul 2012, 10:22) <{POST_SNAPBACK}>Yes, of course we are VAT registered. My point was that when i purchase something from a UK distributor my purchase price is trade plus VAT. So yes i do pay VAT.
We do then claim VAT back which is paid out for purchases but then we pay HMRC VAT collected on their behalf for everything we sell.
But that's my point; your price from the wholesaler is *not* trade + VAT, it's trade. You get to claim that VAT back. If you are basing your retail price on trade + VAT, and then adding VAT on top of that for the consumer, then there's double taxation going on. As a retailer, you set your prices according to what you think you can get away with, but you can't use downstream VAT as a justification.

But you are also in an unfair situation when the government uses VAT to muck about with the economy as a whole. As consumers, we expect the retailer to take the hit, at least for a while, after the VAT goes up. In order to remain competitive, you most likely do so, but you have to jack the prices up eventually in order to preserve your margins and restore your profit levels. However, if VAT is then dropped, as consumers, we expect to see an immediate corresponding drop in the price we pay. We don't see it as fair that you should be able to keep your prices the same for a while in order to recoup some of the money lost from when the rate went up.

Please note, Sean, that I am in no way having a go at you. My two main suppliers for my slot car habit are Pendles and Ebay. What started out as a discussion about one motor is now more broad in scope. I'm in the IT trade, and if you look at hardware prices between the UK and the US, the difference would make you weep. Even more frustrating is the difference in software pricing, especially where downloadable software is concerned. There is no physical shipment yet the vendors often fix their prices in the three major currencies according to what they want to receive. We've moved on now to the disparity of prices around the world, and tax/exchange rates fail to explain it adequately.

Look at the back of any book in the US and you will see the price in USD and CAD. And there will be a huge difference. When I lived in the US, it wouldn't be surprising to see the numbers for Canada as much as 80% higher. But of course that was in CAD, and there was an exchange rate difference. I just checked, and if you round it up, currently USD1.00 = CAD1.01. And yet those book prices remain steadfastly high. Are the Canadian import duties and taxes so high on books that this accounts for the difference ? Transportation ? Retailer margins ? All of the above ? Others I haven't even thought of ?

I'll finish on this thought: it doesn't matter which side of the Atlantic you live on, the tax system is antiquated, unwieldy and wasteful. What we need is a massive overhaul that simplifies things to maximize the amount of revenue that can be used for projects that benefit the community, instead of squandering vast amounts on the system that collects the revenue in the first place, and which ensures provisions to get a reasonable amount of tax out of everyone that *should* be paying it. And the first thing I'd do away with is all corporation taxes. Corporations don't pay tax; only the consumer pays tax. Taxing corporations just adds to the price consumers pay for the corporation's products. So let's not pay the corporations and the government workers to process this payment, and put the money saved towards fixing a few extra potholes, or buying some extra ambulances, or paying our teachers a decent wage for the fundamental service they provide to our nations. I'm starting to sound like a left wing nutjob now, which is strange, because I'm sooooo not. Anyway, it's time for a cuppa, so I'll stop now.