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Old 07.10.2011, 22:06
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Is this really how it works with distributors?

I was looking into ordering some products for my business from England. After having my application to be a retailer accepted I received the wholesale price list and placed my order. The next day I got an email from the company telling me how they actually have a distributor in Switzerland for their products (guess they didn't think about this before I placed the order) and I need to go through them.

So I got the price lists from the Swiss distributor and nearly fell off my chair. An example: something that I had essentially ordered from the UK before they realized they had a distributor, would have cost me 38.00 from them, but the Swiss guys are asking a whopping 118.80!!
These products cost less if I were a regular customer buying them in the UK than they do buying them as a retailer over here.

Shipment for my order from the UK, had they sent it, would have cost 10% of the purchase price, so it doesn't even really make a dent in the Swiss prices.

Here are my questions for anyone who may have experience in this sort of thing: can I try to negotiate with the Swiss guys? Or confront them (in a polite way or course), or perhaps should I mention it to the guys in the UK? Would that change anything?

Thank-you!
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Old 07.10.2011, 22:10
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Re: Is this really how it works with distributors?

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...or perhaps should I mention it to the guys in the UK? Would that change anything?

Thank-you!
In my experience, you can try, they will laugh..Regulated. It exists everywhere, but not in such a huge scale. Anti monopoly laws aren't really a thing here.
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Old 07.10.2011, 22:11
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Re: Is this really how it works with distributors?

Personally, I would go back to the UK company and confront them. They might not even know what their distributor is charging. In any case that is outrageous if there are no other explanations.
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Old 07.10.2011, 22:15
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Re: Is this really how it works with distributors?

Go pick them up from the UK in a van...
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Old 07.10.2011, 22:16
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Re: Is this really how it works with distributors?

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Personally, I would go back to the UK company and confront them. They might not even know what their distributor is charging. In any case that is outrageous if there are no other explanations.
CH is a tiny market, the CH distributor charges what the market will take, it's just business.
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Old 07.10.2011, 22:30
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Re: Is this really how it works with distributors?

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CH is a tiny market, the CH distributor charges what the market will take, it's just business.
But how can one conduct business this way? People are not stupid. All the online shopping going on and the people going across all borders to buy everything from groceries to furniture, not to mention services. How am I supposed to stay in business when the price I am paying for goods is the same or more than what a customer would pay if they order it online? I'm very frustrated
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Old 07.10.2011, 22:36
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Re: Is this really how it works with distributors?

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But how can one conduct business this way? People are not stupid. All the online shopping going on and the people going across all borders to buy everything from groceries to furniture, not to mention services. How am I supposed to stay in business when the price I am paying for goods is the same or more than what a customer would pay if they order it online? I'm very frustrated
Swiss people are not price sensitive, importing costs money with customs charges above 62 CHF, they are also risk averse. High price equates to high quality.
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Old 07.10.2011, 22:36
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Re: Is this really how it works with distributors?

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But how can one conduct business this way? People are not stupid. All the online shopping going on and the people going across all borders to buy everything from groceries to furniture, not to mention services. How am I supposed to stay in business when the price I am paying for goods is the same or more than what a customer would pay if they order it online? I'm very frustrated
I think the only way is import it yourself, bought with UK address. But then, if that CH importer the Brits gave you contact for is an exclusive one, you might run into troubles.

This cartel stuff explains the horrendous prices of things here. But my gut feeling tells me, the Brits gladly export to their exclusive CH importers, who also pay them more than anyone else in Europe. So, "reporting" it wouldn't make any sense. They most probably know it.
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Old 07.10.2011, 22:54
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Re: Is this really how it works with distributors?

The thing I want to import is something pretty original and not widely found here. I sometimes get the feeling that the Swiss way is to make everything look like it is exclusive high-quality stuff. Just because it's new and original, they have to make it expensive.

Another example is Arizona ice tea. That stuff is dirt cheap in North America. Before they started selling it at Coop, they were charging almost 4 francs a bottle at those drinks-in-bulk stores. I'm sure only because the packaging was original compared to anything else sold here and they were trying to make it look like something super exclusive. GREED. Makes me sick.
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Old 07.10.2011, 22:59
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Re: Is this really how it works with distributors?

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The thing I want to import is something pretty original and not widely found here. I sometimes get the feeling that the Swiss way is to make everything look like it is exclusive high-quality stuff. Just because it's new and original, they have to make it expensive.

Another example is Arizona ice tea. That stuff is dirt cheap in North America. Before they started selling it at Coop, they were charging almost 4 francs a bottle at those drinks-in-bulk stores. I'm sure only because the packaging was original compared to anything else sold here and they were trying to make it look like something super exclusive. GREED. Makes me sick.
I noticed the Arizona tea as well, also coz I used to drink it in the US. It was 4fr in the Yank store here, so it wasn't the locals who actually overpriced it. But an importer who probably had to pay some evil import tax, a troop of staff, rents, bunch of other things. Now you get it at Coop pronto for 1,70fr, I was thrilled to find out. When Coop mass imports, have some cuts, etc. they can afford to actually sell it for a reasonable and competitive (to Coke, for example) price. Since, it it was 3fr in Coop, nobody would buy it.
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Old 07.10.2011, 23:04
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Re: Is this really how it works with distributors?

I know that things are going to be more expensive here (higher wages, rents and so on), but what I mean is that sometimes I get the feeling Swiss distributors (or whoever) build a product up to be way more than it is. Maybe because the choice is not overwhelming compared to larger countries, so that when something new is introduced, they feel they can bump the price way up just due to its originality in CH.
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Old 07.10.2011, 23:12
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Re: Is this really how it works with distributors?

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I know that things are going to be more expensive here (higher wages, rents and so on), but what I mean is that sometimes I get the feeling Swiss distributors (or whoever) build a product up to be way more than it is. Maybe because the choice is not overwhelming compared to larger countries, so that when something new is introduced, they feel they can bump the price way up just due to its originality in CH.
When we moved to Spain, we got a salary ajustment. They made the calculation on the living % which is around 30 % (If I remember correctly).

So when I see the price in CH where it is 50-100-150% more expensive than other countries in europe, I just can't accept that explanation of having higher salaries, higher rent, etc. It doesn't excuse the huge % they take on goods.
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Old 07.10.2011, 23:13
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Re: Is this really how it works with distributors?

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I know that things are going to be more expensive here (higher wages, rents and so on), but what I mean is that sometimes I get the feeling Swiss distributors (or whoever) build a product up to be way more than it is. Maybe because the choice is not overwhelming compared to larger countries, so that when something new is introduced, they feel they can bump the price way up just due to its originality in CH.
That's true, but that kind of thing exists all over. Just think about novelty electronics or cars all over the market, that are made to look innovative and often it is just a gimmick with a slightly different design..So, I guess here, it would be the uber special hippie Yank drink, or novely UK stuff you want to import, and, gasp, customers here go for the mark up thinking it is making their choice special.
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Old 08.10.2011, 01:10
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Re: Is this really how it works with distributors?

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When we moved to Spain, we got a salary ajustment. They made the calculation on the living % which is around 30 % (If I remember correctly).

So when I see the price in CH where it is 50-100-150% more expensive than other countries in europe, I just can't accept that explanation of having higher salaries, higher rent, etc. It doesn't excuse the huge % they take on goods.

You're not wrong, but you're not going to change squat. I can give you the example of a radio at a US price of $ 165 and the Swiss agent trying to charge CHF 885! Guess where I bought it?

You just need to use your friends and network of contacts to get specific commercial items sent over here. Or if you really feel that you're onto something especially sought after, go for it yourself. There's some guy that hangs here that sells cheese pretty successfully I'm led to believe....
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Old 08.10.2011, 09:38
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Re: Is this really how it works with distributors?

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You're not wrong, but you're not going to change squat. I can give you the example of a radio at a US price of $ 165 and the Swiss agent trying to charge CHF 885! Guess where I bought it?

You just need to use your friends and network of contacts to get specific commercial items sent over here. Or if you really feel that you're onto something especially sought after, go for it yourself. There's some guy that hangs here that sells cheese pretty successfully I'm led to believe....
Hum.... sounds like something I was thinking about....

Someone would like to get stuff from Spain? I can be the distributor.

No, seriously!
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Old 08.10.2011, 10:18
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I was looking into ordering some products for my business from England. After having my application to be a retailer accepted I received the wholesale price list and placed my order. The next day I got an email from the company telling me how they actually have a distributor in Switzerland for their products (guess they didn't think about this before I placed the order) and I need to go through them.

So I got the price lists from the Swiss distributor and nearly fell off my chair. An example: something that I had essentially ordered from the UK before they realized they had a distributor, would have cost me 38.00 from them, but the Swiss guys are asking a whopping 118.80!!
These products cost less if I were a regular customer buying them in the UK than they do buying them as a retailer over here.

Shipment for my order from the UK, had they sent it, would have cost 10% of the purchase price, so it doesn't even really make a dent in the Swiss prices.

Here are my questions for anyone who may have experience in this sort of thing: can I try to negotiate with the Swiss guys? Or confront them (in a polite way or course), or perhaps should I mention it to the guys in the UK? Would that change anything?

Thank-you!
We in case of the U.K. work with our longtime partner in Reigate/Surrey. We often do orders with UK-suppliers with our address here, but the Reigate address as shipping address. In case of complicated people, we tell our partner what exactly to order and he then places the order in his name.

We in case of the USA order stuff directly but with shipping address at a forwarding agent at Miami-Airport, where goods are kept back and consolidated until we give our go-ahead

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Swiss people are not price sensitive, importing costs money with customs charges above 62 CHF, they are also risk averse. High price equates to high quality.

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
B) Most industrial products out of the E.U. are duty-free, you however have to request the EU suppliers to deduct their exorbitant VAT, as you on arrival of the goods pay the much lower CH VAT
C) Customers here on the continent (also D/F/BE/NL/LX/IT) however ARE ready to pay a tiny bit more if you give a better service (info/del,etc)

Last edited by MusicChick; 08.10.2011 at 10:48. Reason: merging consecutive posts...good info, though, thanks!
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Old 08.10.2011, 10:27
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Re: Is this really how it works with distributors?

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I was looking into ordering some products for my business from England. After having my application to be a retailer accepted I received the wholesale price list and placed my order. The next day I got an email from the company telling me how they actually have a distributor in Switzerland for their products (guess they didn't think about this before I placed the order) and I need to go through them.

So I got the price lists from the Swiss distributor and nearly fell off my chair. An example: something that I had essentially ordered from the UK before they realized they had a distributor, would have cost me 38.00 from them, but the Swiss guys are asking a whopping 118.80!!
These products cost less if I were a regular customer buying them in the UK than they do buying them as a retailer over here.

Shipment for my order from the UK, had they sent it, would have cost 10% of the purchase price, so it doesn't even really make a dent in the Swiss prices.

Here are my questions for anyone who may have experience in this sort of thing: can I try to negotiate with the Swiss guys? Or confront them (in a polite way or course), or perhaps should I mention it to the guys in the UK? Would that change anything?

Thank-you!
This is the basis of all the price cost differences here, the wholesale price to the importer/distributor is different (higher) before every man and his dog puts their % margins on it.
An example, a friend here is a Sanitar/Plumber their main supplier is Sanitas Trost (large company very good buying power), a lot of his customers are buying online in Germany rather than using him and a basis of his business is the margin he makes on materials supplied. So in some very heated negotiations they (ST) supplied him with their invoiced (from the manufacturer) price list and the maunufacturer direct price for wholesalers in Switzerland was higher than the "retail" online price in Germany or UK by a large margin. I guess as Switzerland is not as price sensitive as her neighbours, this has always existed and it will be the distubutors who can change it when online sales really start to make a dent in their business.


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But how can one conduct business this way? People are not stupid. All the online shopping going on and the people going across all borders to buy everything from groceries to furniture, not to mention services. How am I supposed to stay in business when the price I am paying for goods is the same or more than what a customer would pay if they order it online? I'm very frustrated
It is not easy, try to find loyal customers who are not so price sensitive and seek service.

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I know that things are going to be more expensive here (higher wages, rents and so on), but what I mean is that sometimes I get the feeling Swiss distributors (or whoever) build a product up to be way more than it is. Maybe because the choice is not overwhelming compared to larger countries, so that when something new is introduced, they feel they can bump the price way up just due to its originality in CH.
Good business marketing.
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Old 08.10.2011, 10:40
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Re: Is this really how it works with distributors?

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This is the basis of all the price cost differences here, the wholesale price to the importer/distributor is different (higher) before every man and his dog puts their % margins on it.
An example, a friend here is a Sanitar/Plumber their main supplier is Sanitas Trost (large company very good buying power), a lot of his customers are buying online in Germany rather than using him and a basis of his business is the margin he makes on materials supplied. So in some very heated negotiations they (ST) supplied him with their invoiced (from the manufacturer) price list and the manufacturer direct price for wholesalers in Switzerland was higher than the "retail" online price in Germany or UK by a large margin. I guess as Switzerland is not as price sensitive as her neighbours, this has always existed and it will be the distubutors who can change it when online sales really start to make a dent in their business.
.
As Switzerland is far more price sensitive than Austria or France, you at times have to invent alternative methods. We at times buy stuff in Germany but have it sent to Reigate/Surrey/UK (far cheaper than to Zurich) and then have it included in our consolidated truckloads to Zurich. Our partner usually forgets to list the prices of the German stuff, but of course includes it in the merchandise-list which is nice with the VAT
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Old 08.10.2011, 10:54
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Re: Is this really how it works with distributors?

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I was looking into ordering some products for my business from England. After having my application to be a retailer accepted I received the wholesale price list and placed my order. The next day I got an email from the company telling me how they actually have a distributor in Switzerland for their products (guess they didn't think about this before I placed the order) and I need to go through them.

...

Here are my questions for anyone who may have experience in this sort of thing: can I try to negotiate with the Swiss guys? Or confront them (in a polite way or course), or perhaps should I mention it to the guys in the UK? Would that change anything?

Thank-you!
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... sometimes I get the feeling Swiss distributors (or whoever) build a product up to be way more than it is. Maybe because the choice is not overwhelming compared to larger countries, so that when something new is introduced, they feel they can bump the price way up just due to its originality in CH.
This is an intercompany cross-border transaction, and the rationale behind the pricing between UK wholesaler and CH retailer, and between CH retailer and third party customers may have many reasons to be the way it is, including (and very relevantly) tax-related.

You mentioned you actually put in an application to be a retailer. I would try to find out directly from the UK guys what the contractual relationship is with their CH retailer - if it is exclusive or not - and, if not exclusive, explore the possibility of them giving you the same/similar commercial terms and conditions.

I would point out that, in general, it is a very positive sign if a company gives the same/similar terms and conditions (and pricing) to related (the CH guys) and unrelated parties (you), provided that you are "comparable enough" in terms of things such as volume of business, or market served, and many others.

Good luck!

P.S. I don't know your specific facts and circumstances, which might make the above considerations impossible at all, so please take them as a general comment and nothing more.
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Old 08.10.2011, 11:36
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Re: Is this really how it works with distributors?

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
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