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Old 08.10.2011, 11:44
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Re: Is this really how it works with distributors?

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Thanks for all the comments received. There are obviously some bigger business brains on this forum than mine!
So I'd like to pick them a bit more if that's okay...

If the guys in England were willing to sell to me, but ship to another address outside of CH, and then I were to arrange to have the goods shipped here to sell to CH customers (therefore not giving their CH distributor the business), could I legally sell the stuff, which I would obviously be selling at a much lower price than other retailers that buy it from the CH distributor?

I guess I have to talk to them directly to get some answers, but I'm not sure how to approach them
Its just a grey import, rather like Media Markt & Auto Zuri West.
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Old 08.10.2011, 13:23
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Re: Is this really how it works with distributors?

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Its just a grey import, rather like Media Markt & Auto Zuri West.
Switzerland has adopted the Cassis de Dijon principle so basically it is legal to sell anything here that is permitted to be sold in an EU country; except special conditions exist for food stuffs & medicines.

As mentioned if the Swiss distributor has an exclusive agreement then you might find the English company refuses to supply to you.
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  #23  
Old 08.10.2011, 14:09
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Re: Is this really how it works with distributors?

Hi Chris,

I guess that if an exclusivity contract is in place and you sell the items despite this you might have to come into legal terms with the local distributor.
I remember for my previous job that we changed distributor in one country but since the contract with the old one was still in place, we had to pay them some agreed settlement fees until the expiry date for each item sold to the new one!
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Old 08.10.2011, 14:39
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Re: Is this really how it works with distributors?

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A) Swiss people even are extremely price sensitive, and if you do not do something about it they will try to purchase the stuff online
Nice joke.

I regularly buy a special biomedical material in the USA, price per package USD 7.80, taxes included. In Switzerland, the same thing from the same company in Pennsylvania costs CHF 248.00 plus VAT. Evidence in written form available on request. Bringing it to Switzerland dosn't cost much more than a song. Usually, when I try to declare it at Zurich Airport, the customs guys give the invoice from the US company a quick glance and then motion me to move on, even without me singing.

When I tell my Swiss colleagues about it, they shrug and say, "Can't be the same thing." Even when I offer them to bring them a few items for free, they still are not interested. Quality must be expensive. Period. Price consciousness, my posterior.

If you think, there must be hidden expenses on the way from the USA to Switzerland that make things so expensive, I have another example: A special spare part for medical equipment, made in Switzerland, costs CHF 2100.00 here but only USD 185.00 (no typo!) in the USA. Exactly the same thing. Only difference: One year guarantee in Switzerland, three years in the USA.

Now what explanation can there be other than pure greed?
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Old 08.10.2011, 14:59
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Re: Is this really how it works with distributors?

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A) Swiss people even are extremely price sensitive, and if you do not do something about it they will try to purchase the stuff online
Yes, many Swiss are price sensitive but only within the price range they're familiar with.

E.g. if product A costs CHF 39.80 at Migros but CHF 45.00 somewhere else, most Swiss people would buy it at Migros.

However most of those "price sensitive" people wouldn't even know that product A is sold in the US for $9.99 and if they knew, they wouldn't buy it at the US price because "it can't be good at that price", i.e. exact the kind of behaviour that Captain Greybeard mentioned above.
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  #26  
Old 08.10.2011, 15:31
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Re: Is this really how it works with distributors?

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Now what explanation can there be other than pure greed?
stupidity on the part of swiss purchasers?
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  #27  
Old 08.10.2011, 15:42
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Re: Is this really how it works with distributors?

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stupidity on the part of swiss purchasers?
I'd call it naivety and couldn't-care-less attitude, both of which can but needn't be part of stupity.
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Old 08.10.2011, 16:08
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Re: Is this really how it works with distributors?

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Thanks for all the comments received. There are obviously some bigger business brains on this forum than mine!
So I'd like to pick them a bit more if that's okay...

If the guys in England were willing to sell to me, but ship to another address outside of CH, and then I were to arrange to have the goods shipped here to sell to CH customers (therefore not giving their CH distributor the business), could I legally sell the stuff, which I would obviously be selling at a much lower price than other retailers that buy it from the CH distributor?

I guess I have to talk to them directly to get some answers, but I'm not sure how to approach them
A) We have some 100 to 300 kgs of stuff from the UK, with in most cases OUR name and address as the customer, and the name and address of our partner as shipping address
B) It of course is legal, but the CH distributor can protest to the supplier who then may stop supplying you. We were in touch with a US wholesaler who then referred us to our main-competitor, describing that shop overthere as his distributor. We dropped that supplier from our considerations
C) how to talk to them. Give them a phone-call and ask for name and email address of the person in charge, and then send them an Email. For the transport ex UK to Switzerland we work with "Extra Transport AG" in Pratteln. There may be a possibility that all supplies for you are sent by the suppliers to the local agent of Extra in the UK and consolidated.

If things stall, give me a PM with full details (nature of merchandise, locations of supplier, location here, etc) and I might check up with our partner for a solution


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Nice joke.

I regularly buy a special biomedical material in the USA, price per package USD 7.80, taxes included. In Switzerland, the same thing from the same company in Pennsylvania costs CHF 248.00 plus VAT. Evidence in written form available on request. Bringing it to Switzerland dosn't cost much more than a song. Usually, when I try to declare it at Zurich Airport, the customs guys give the invoice from the US company a quick glance and then motion me to move on, even without me singing.

When I tell my Swiss colleagues about it, they shrug and say, "Can't be the same thing." Even when I offer them to bring them a few items for free, they still are not interested. Quality must be expensive. Period. Price consciousness, my posterior.

If you think, there must be hidden expenses on the way from the USA to Switzerland that make things so expensive, I have another example: A special spare part for medical equipment, made in Switzerland, costs CHF 2100.00 here but only USD 185.00 (no typo!) in the USA. Exactly the same thing. Only difference: One year guarantee in Switzerland, three years in the USA.

Now what explanation can there be other than pure greed?
Such is the reason why we do direct purchases in the USA and consolidate things at MIA airport. Why should there be "hidden expenses" ? There is the freight, there may be some customs duties and there is 2,5% or 8% VAT, that's it. And I can tell you that the customers DO care. We have customers who explored ways to get things directly but had to find out about the exorbitant import handling tariffs of the "Die Post" etc. The price differences you mention are only too well known and are absolutely ridiculous, and in fact are the reason why there is an increasing trade going on in regard to direct imports trying to circumvent such idiotic prices as you mention. The example you gave above is worth to be checked
USA price = $ 185
freight = $ 200 (all incl)
VAT&duty = $ 100 (max)
handling = CHF 100
=
total approx CHF 600
plus 35% margin CHF 210
-
final total = CHF 810.--
so that it even with a heavy profit is below CHF 1000.--
- conclusion = crooks
-
the other example is easy
$ 8 in the USA
but if you take it by consol airfreight to ZRH the
AWB will show things as follows
airfreight MIN = $ 50.--
handling USA = $ 100.--
terminal fee & courier = $ 30.--
= CHF 200.--
min-Handling ZRH CHF 45.
-
total CHF 245.--
8% VAT = CHF 19.60
= CHF 264.60 !!
-
So sorry, I will abstain from judgments about your colleagues

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Yes, many Swiss are price sensitive but only within the price range they're familiar with.

E.g. if product A costs CHF 39.80 at Migros but CHF 45.00 somewhere else, most Swiss people would buy it at Migros.

However most of those "price sensitive" people wouldn't even know that product A is sold in the US for $9.99 and if they knew, they wouldn't buy it at the US price because "it can't be good at that price", i.e. exact the kind of behaviour that Captain Greybeard mentioned above.
Correct in so far that nobody asks for a price not known. Wrong however in so far as so many people from here are overthere in the USA fairly often, or are well informed via the internet.

At the other hand, if a product on sale inside the USA for $ 10.-- is sold here for CHF 30 or even 40, it is alright as procuring the stuff in whatever way will result in net-outlays of $ 25 as a minimum. You should not regard you own time as free-of-charge. If you have to get from the hotel to a shop and back you have to set 30 mins at CHF 20.-- as a minimum

You mention Migros. I don't know how many of those articles they import, and if they import a lot may have net outlay of CHF 20 but have to add
- salaries of employees (CHF 2.75 per item per day)
- renting prices of their facilities (CHF 1.-- per item per day)
- storage costs (CHF 2.-- per item per day)
- profit margin (35%)

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Last edited by Wollishofener; 08.10.2011 at 22:10.
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  #29  
Old 08.10.2011, 17:17
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Re: Is this really how it works with distributors?

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the other example is easy
$ 8 in the USA
but if you take it by consol airfreight to ZRH the
AWB will show things as follows
airfreight MIN = $ 50.--
handling USA = $ 100.--
terminal fee & courier = $ 30.--
= CHF 200.--
min-Handling ZRH CHF 45.
-
total CHF 245.--
8% VAT = CHF 19.60
= CHF 264.60 !!
Thank you Wolli. But, of course, I did my own research and found out that the Swiss retailer had about 200 packages of that material on stock. Which means that they do not import it item by item, but in large bulks. Which in turn means most of those fees are heavily reduced when divided down to the single item. They just charge what they know they can charge without being lynched.

Sometimes I think it could be even cheaper if an employee of the retailer company flew to the USA to purchase the stuff, do all the form work, spend a few days in Las Vegas or Disney World and take the whole load to Switzerland. If my job left me enough time, I'd consider offering my services to them. Would be fun.
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  #30  
Old 08.10.2011, 22:20
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Re: Is this really how it works with distributors?

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A) We have some 100 to 300 kgs of stuff from the UK, with in most cases OUR name and address as the customer, and the name and address of our partner as shipping address
B) It of course is legal, but the CH distributor can protest to the supplier who then may stop supplying you. We were in touch with a US wholesaler who then referred us to our main-competitor, describing that shop overthere as his distributor. We dropped that supplier from our considerations
C) how to talk to them. Give them a phone-call and ask for name and email address of the person in charge, and then send them an Email. For the transport ex UK to Switzerland we work with "Extra Transport AG" in Pratteln. There may be a possibility that all supplies for you are sent by the suppliers to the local agent of Extra in the UK and consolidated.

If things stall, give me a PM with full details (nature of merchandise, locations of supplier, location here, etc) and I might check up with our partner for a solution
Thank-you. I appreciate the suggestions and information. Just have to wait and see what kind of reactions I'll get.
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Old 09.10.2011, 00:11
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Re: Is this really how it works with distributors?

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Thank you Wolli. But, of course, I did my own research and found out that the Swiss retailer had about 200 packages of that material on stock. Which means that they do not import it item by item, but in large bulks. Which in turn means most of those fees are heavily reduced when divided down to the single item. They just charge what they know they can charge without being lynched.

Sometimes I think it could be even cheaper if an employee of the retailer company flew to the USA to purchase the stuff, do all the form work, spend a few days in Las Vegas or Disney World and take the whole load to Switzerland. If my job left me enough time, I'd consider offering my services to them. Would be fun.
200 packages on stock sounds as if they have a very good margin, provided they sell the stuff. But a bad profit if they first have high storage costs and then have to sell by Spezial-Aktion
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Old 10.10.2011, 01:31
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Re: Is this really how it works with distributors?

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Thank-you. I appreciate the suggestions and information. Just have to wait and see what kind of reactions I'll get.
maybe you can ask what it takes to become a 'distributor' so that you get the same deal...
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Old 10.10.2011, 01:50
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Re: Is this really how it works with distributors?

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maybe you can ask what it takes to become a 'distributor' so that you get the same deal...
the problem always is that no wholesaler anywhere has to give the same conditions to all his "distributors" and very often local retailers are accepted as "distributors" on the basis of communicative skills.

Let's add to this that you all over the globe again and again get into touch with people who are trying their very best to give a good service and to people who simply are not service minded at all.
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Old 10.10.2011, 13:27
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Re: Is this really how it works with distributors?

Hi
This is all really useful stuff as I've been looking into how I continue to use my UK suppliers in Switzerland and import goods in.

I have a few (hopefully brief) questions....

I worked out costs of using a company like UPS or Fedex and paying the customs handling fee and VAT etc... it was making it all rather unaffordable for my final pricing for clients...then I looked into just flying the stuff in on my own trips back and forth and declaring it at customs at the airport. (Not ideal though as the items, whilst not high value are rather bulky!)

2 questions:
1. Is there no equivalent handling fee at the airport? So you just pay the 8% VAT and that's it???
2. Is the VAT paid based on the costs I have paid in the UK (which I can show on an invoice) or on the "value" of the goods at the price I will sell them? I've read a few conflicting things on this... my starting assumption was that I pay VAT on the costs I've paid in the UK and then charge VAT on the final price to my client...

3. Whilst we are on the subject of VAT - is it similar in Switzerland to the UK where if you can stay below the threshold of charging VAT to your clients it makes business a lot easier? I guess at 8% it's nowhere near the impact on final prices to clients but keen to hear thoughts on this...


4. Finally, if anyone can recommend a company that consolidates delivery of goods from UK to Switzerland and will deliver the goods to me in Zurich at a reasonable cost in a reasonable timescale (1-2 weeks) please could you pass on the details.

Cheers!!
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Old 11.10.2011, 11:07
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Re: Is this really how it works with distributors?

On a related note, and not worth it's own thread, why are (some) Swiss goods cheaper outside of Switzerland?

Last weekend I bought a Kuhn Rikon crepe pan in the UK for £6.99 (including VAT). Out of curiousity I looked on Top Priesse to see how much it would cost here....CHF51. Ok, maybe I got a great deal because I got it at TK Maxx, but it's going for £16.95 on Amazon. The more common varieties of Lindt chocolate bars are also cheaper in the UK. And Swiss watches are often cheaper outside of Switzerland (I'm think US in this case). I didn't look to see where the pan was made but surely the chocolate and watches are made here?
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Old 11.10.2011, 11:14
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Re: Is this really how it works with distributors?

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4. Finally, if anyone can recommend a company that consolidates delivery of goods from UK to Switzerland and will deliver the goods to me in Zurich at a reasonable cost in a reasonable timescale (1-2 weeks) please could you pass on the details.
Where in the UK are you looking to ship from? And how large a shipment? The company I used when I moved here has weekly vans (Luton sized) from the London area to France, Switzerland and Italy. My stuff got picked up on a Wednesday night in Kent (as I was sort of on their way to Dover) and was in Zurich by the Thursday afternoon. I have no idea what you consider a reasonable charge but if you are shipping from the London area and are interested in contacting them for a quotation then just drop me a PM. They can collect from outside of London for an extra fee.
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Old 11.10.2011, 11:39
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Re: Is this really how it works with distributors?

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The more common varieties of Lindt chocolate bars are also cheaper in the UK.
That's because they're probably made in Germany. If you go to the Lindt store in, say, Kilchberg (next to the factory), you'd be surprised how much of their chocolates are in fact not Swiss.
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Old 11.10.2011, 12:23
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Re: Is this really how it works with distributors?

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That's because they're probably made in Germany. If you go to the Lindt store in, say, Kilchberg (next to the factory), you'd be surprised how much of their chocolates are in fact not Swiss.
Correct. And most Lindt chocolate sold in the USA is made in the USA. Its not worth the money. However, it sells because it's still way better than Hershey's, except, of course, for s'mores.
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Old 11.10.2011, 13:01
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Re: Is this really how it works with distributors?

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On a related note, and not worth it's own thread, why are (some) Swiss goods cheaper outside of Switzerland?

Last weekend I bought a Kuhn Rikon crepe pan in the UK for £6.99 (including VAT). Out of curiousity I looked on Top Priesse to see how much it would cost here....CHF51. Ok, maybe I got a great deal because I got it at TK Maxx, but it's going for £16.95 on Amazon. The more common varieties of Lindt chocolate bars are also cheaper in the UK. And Swiss watches are often cheaper outside of Switzerland (I'm think US in this case). I didn't look to see where the pan was made but surely the chocolate and watches are made here?
I have bought Swiss watches in USA in outlets stores for up 75% discount.

I do not believe you will ever find such discounts here in CH.
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