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U.K. Retailers charge more


Andymsa
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Having modelled German trains for many years, I have noticed on many occasions that uk retailers charge more than European outlets. I know of course that it is easier to remedy any issues that may arise with a uk outlet, but as most of my buying is done in person I tend not to buy major item online.

 

An example of the savings I recently brought 40 ESU decoders for £960 from a well know European outlet and the general uk price was £1230.

 

So the question is it worth the risk to buy from European outlets as opposed to uk outlets and why the difference in costs. Without getting into politics, are not prices supposed to be equal under European trading laws or are uk outlets putting a markup on prices

 

Andy

Edited by Andymsa
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Having modelled German trains for many years, I have noticed on many occasions that uk retailers charge more than European outlets. I know of course that it is easier to remedy any issues that may arise with a uk outlet, but as most of my buying is done in person I tend not to buy major item online.

 

An example of the savings I recently brought 40 ESU decoders for £960 from a well know European outlet and the general uk price was £1230.

 

So the question is it worth the risk to buy from European outlets as opposed to uk outlets and why the difference in costs. Without getting into politics, are not prices supposed to be equal under European trading laws or are uk outlets putting a markup on prices

 

Andy

Don't forget that the UK retailer will have to incur costs because of currency changes, both in terms of exchange rates and whatever costs the banks charge for transactions. These add an appreciable amount to the cost price per item for the final vendor.

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Don't forget that the UK retailer will have to incur costs because of currency changes, both in terms of exchange rates and whatever costs the banks charge for transactions. These add an appreciable amount to the cost price per item for the final vendor.

I can except this to a point, but with European items there only tends to be one main importer, so there volumes would be higher and as with businesses get a better exchange rate than us. But from a banking point of view I would suspect that the cost to retailers would be born in the exchange rate.

 

I can remember one certain retailer when we had the German mark and when it was devalued put all his prices up overnight even on old stock.

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20% VAT in the UK, which with exchange rate differences adds up to about the price difference you see in the above example. Import fees on model railway equipment when I was importing from the US was 0% up to a few years ago when I stopped importing, and unless things have changed since then I'd expect it is still the same. It will have been different for commercial outlets however, I believe they are charged import duty, but at what rate I'm not sure. I think there may have been a limit on the value of imported goods even on personal purchases, I remember trying to keep individual orders below £400 at a time, but an order for Broadway Zephyr sets didn't incur an import fee.

Edited by Zunnan
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Also there is import duty, cost of collecting such duty, regarding pricing under EU law it is not the same as certain German model railway magazines have different prices depending on which country the magazine is purchase the difference can be much as 5 euros

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Also there is import duty, cost of collecting such duty, regarding pricing under EU law it is not the same as certain German model railway magazines have different prices depending on which country the magazine is purchase the difference can be much as 5 euros

 

Taken from the HMRC website relating specifically to Reduced-size models, recreational models and electric-trains including tracks under heading 9503 00 30 -

 

 

"The commodity code for importing is 9503003000.

Goods are subject to VAT standard rate.

Importing from outside the EU is subject to a third country duty of 0.00 % unless subject to other measures."

 

At present there is zero import duty from EU states or worldwide on this classification of goods, so VAT and handling fees apply, plus import duty charged at 0%. If you are charged import duty by the handling company, you have every right to contest that and have it re-calculated at the proper (nil) rate. Obviously things are likely to change in coming years, but at present this is the going rate.

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20% VAT in the UK, which with exchange rate differences adds up to about the price difference you see in the above example. Import fees on model railway equipment when I was importing from the US was 0% up to a few years ago when I stopped importing, and unless things have changed since then I'd expect it is still the same. It will have been different for commercial outlets however, I believe they are charged import duty, but at what rate I'm not sure. I think there may have been a limit on the value of imported goods even on personal purchases, I remember trying to keep individual orders below £400 at a time, but an order for Broadway Zephyr sets didn't incur an import fee.

 

VAT rates in European countries are about the same as the UK (Germany 19%, Austria and France 20%) so make little difference to the prices. No import duties into the UK from EU countries.

Many European manufacturers still like to have a single agent for the UK, ie Gaugemaster for Roco and Fleischmann so you have to figure in their cut, even though they may only handle some "paperwork", the goods going straight from the manufacturer to the shop. Hornby used to employ an agent for Rivarossi, Lima etc which seemed to bump up the price in the UK by at least 25%

 

Brian

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Without getting into politics, are not prices supposed to be equal under European trading laws or are uk outlets putting a markup on prices

Andy

HI Andy

 

All retailers put a mark up on stock - that is how they make a living. Some add more than others, possibly because they have higher costs. There are no regulations that I am aware of in any part of Europe that mandate a retail price.

 

Cheers

 

Ben A.

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You have  also to consider the distribution chain and whether imported goods come through an importer/wholesaler. If so, that adds another set of business overheads which add to the retail price.

 

Do importers also have to place larger orders and carry more stock? Larger orders don't always provide greater discounts but funding and storing more product carries a cost that also has to be recovered.

 

As we have seen in other threads on pricing, we only see the end result and don't necessarily understand how it is arrived at. 

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are not prices supposed to be equal under European trading laws

 

No.  See also http://www.rmweb.co.uk/community/index.php?/topic/134569-out-of-order-or-good-business-sense/

 

The EEA permits goods to pass free of tariffs between member states.  It says nothing about how much retailers can or should charge their customers.

Edited by ejstubbs
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I completely forgot to factor in the 'middle man' charges, its been a while. When I imported I was generally doing so direct from source rather than through an agent, though sometimes agents bargain bins really can come up trumps, so its well worth looking at all options; like when I bought a load of Intermountain SD40-T2 for $32 each while here in the UK they were selling for around £95-100.

 

Why are prices higher in my local shop than a BIG one in Liverpool Widnes. A fact of life or economics? 

 

In simplest terms, (much) higher turnover of stock vs. operating costs. They can afford to take less profit per item, so can pass on goods to the end customer at a lower mark up.

 

Its worth joining club to be honest, some shops will discount on certain items if you ask about club discounts. The shops I use (or used to use until they shut up shop) quite happily issue a 10% discount on scenic items and track. Our club chairman being the proprietor of my local model shop means I usually pay around the same price as a box shifter but I get to go see my models tested and not kicked around in the post, which in itself I feel is worth the extra cost. I've had far too many duds arrive through the post.

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Some interesting points been raised here. Just to clarify this is about buying from European outlets, buying from the US or other non European countries is another ball game. But I guess if your lucky to have a model shop near to you, then the extra cost may outweigh the possible issues with ordered items. But for me it's at least an issue one and half hour drive to nearest European outlet then most often they have to order item in . So on balance I might aswell just order online in first place and get benefit of the cost saving but I guess it's a sign of the times that there are not as many outlets as the here used to be.

 

But one further point I checked the stock available at uk outlets for the ESU decoders not surprisingly both were out of stock. In the past when I ordered such items from uk outlets I have waited many weeks for things to arrive. But when I order from European outlets these items arrive very quickly but to be fair that may be just down to luck. But I do know that gaugemaster do a Roco order once a month so if you are unlucky to order after they do there order it can be at least two months before you get your item.

 

But I really would rather support a local model shop as its just as much about browsing, but if they don't have what you want in the first place is it worth the long trip. But I do relise they can't hold everything in stock and it's hard to predict what customers want.

Edited by Andymsa
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I can buy British models much more cheaply from British retailers than from those in Australia, even after P&P costs.  In part this is because VAT is deducted; however this will be partly offset by Australian GST from next month.  Our retailers problem seems to be associated with very high wholesale costs - the retailers here pay over the odds to stock their shelves.  I would much prefer to buy locally but our shops do not have the range, nor the prices. So I have little option, but choose to buy track, scenic material and sundries locally, as well as little collection of Australian rolling stock.  

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Having modelled German trains for many years, I have noticed on many occasions that uk retailers charge more than European outlets

That rather depends on exactly what you are buying. Certainly British outline models are usually dearer in Germany than in the UK, although German outline tends to be more expensive in UK shops than in Germany. It's simply a matter of relative demand and serving the local market. Sales volume of German outline models is far smaller than those for British ones (in the UK) which means items hang around on shelves/in stock for longer and there is less opportunity for economies of scale.

 

G

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I've often looked at things like decoders from shops in the continent, but never found it sufficiently cheaper. I've bought the odd bit from DM-Toys, but it's rare I find anything I want cheaper from outside the UK. If I did then I'd have no qualms buying from overseas sources.

 

Cycling stuff, on the other hand, is often vastly cheaper from Europe. Tyres can be half the price from Germany for an identical item.

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I've often looked at things like decoders from shops in the continent, but never found it sufficiently cheaper. I've bought the odd bit from DM-Toys, but it's rare I find anything I want cheaper from outside the UK. If I did then I'd have no qualms buying from overseas sources.

 

Cycling stuff, on the other hand, is often vastly cheaper from Europe. Tyres can be half the price from Germany for an identical item.

I guess it depends on what you define as sufficiently cheaper, I normally tend to buy in volume but not everyone can do this. But the price difference per decoder was £6.50. Plus discount I built up. If I was to buy just 1 or 2 decoders I most likley would source from uk. But one thing I did find good was the shipping costs from Germany. It cost 3.90 euros, for the same box size here would be in the region of £6-8

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The "problem" may simply be how many firms are in the supply chain.

 

A reasonable sized German model shop may deal direct with the German manufacturer - two levels of profit (manufacturer and the German shop).

 

For us on the UK, we usually have to buy our through the manufacturers-appointed UK importer - three levels of profit (manufacturer, importer and the shop). 

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Having modelled German trains for many years, I have noticed on many occasions that uk retailers charge more than European outlets. I know of course that it is easier to remedy any issues that may arise with a uk outlet, but as most of my buying is done in person I tend not to buy major item online.

 

An example of the savings I recently brought 40 ESU decoders for £960 from a well know European outlet and the general uk price was £1230.

 

So the question is it worth the risk to buy from European outlets as opposed to uk outlets and why the difference in costs. Without getting into politics, are not prices supposed to be equal under European trading laws or are uk outlets putting a markup on prices

 

Andy

I'm not surprised, as

1. Continental European modelling is less common in the UK, so sales volumes will be lower in the UK. Hence the UK dealer may well want a larger profit than his continental equivalent to allow for the fact that an item is likely to be sitting on his shelf a lot longer than for his continental opposite number.

2. The UK seller is likely to be buying smaller quantites and so will get less volume discount, always assuming that the manufacturer gives bigger discounts on larger orders.

3. The stuff has to be shipped here, and that costs time and money, and is an additional cost not borne by the dealer in the continental manufscturer's home market. So any price comparison should be based on a country that is not the manufacturer's home country and is as far grom the home country as the UK.

4. The UK dealer has the exchange rate to factor in to their selling price. Their stock may hsve been bought at a time when Sterling was worth lesz agsinst the Euro than whenever you compare prices.

5. Differences in the retailer's own costs, such as wages, staff pension costs, rents, insurance, electric, local council taxes/rates, local corporate taxation on profits, etc., etc. Just because they're both retailers doesn't mean their overheads cost the same.

 

The EU doesn't say that prices have to be the same everywhere in the EU. If you're thinking about mobile phone roaming charges the argument is that the companies shouldn't charge you extra for using your normal services just because you' re using those services away from your home country.

.

Edited by GoingUnderground
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