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Random fashion thoughts

Discussion in 'Streetwear and Denim' started by thekunk07, Aug 1, 2009.

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  1. milosh

    milosh Senior member

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    Only experience i have is getting VAT back at the airport when I leave the EU. Global blue handles this in 95% of the cases.
     
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  2. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    They handle the refunds and take a fee.
     
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  3. dieworkwear

    dieworkwear Senior member

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    Oh that's right. I think you have to be at one of those stations though to get your refund? Weird that this EU store is telling me I have to go through them for a VAT refund, rather than just get it deducted automatically, when I'm buying online
     
  4. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    So, small stores like PN/P actually use that office, and just do it for you, which is why your VAT discount is less than the national rate. Dealing with VAT for a small store is a huge PITA, and a lot won't do it unless they get decent volume. I don't know who you are talking about, so it could just be that they are lazy.
     
  5. dieworkwear

    dieworkwear Senior member

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    Don't they have to just fill out some application to deduct VAT across the board for oversea customers? I guess it could be an involved process, but it seems like you're missing out on a lot international business this way.

    I was looking at Shoes & Shirts in Maastricht and Degand in Brussells. Neither will deduct VAT.
     
  6. gdl203

    gdl203 Senior member Dubiously Honored Affiliate Vendor

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  7. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    It's a bit more of a pain than than, from what I understand, and (apparently) varies from country to country. I've obviously never done it myself. Sure, a lot of people miss out on international business, but international business incurs higher overhead for lower margins (that the vendor swallows a big chunk of the shipping is nearly a given). A small vendor, like, No Man Walks Alone is not really set up for overseas orders. Shipping has to be handled separately. Not sure about payments. And a LOT of people really just don't want to deal with the hassle, especially when they may not have concrete evidence that the additional sales would offset the increased overhead costs. I think that the power of inertia is highly underestimated.
     
  8. gdl203

    gdl203 Senior member Dubiously Honored Affiliate Vendor

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    Not to mention fraud rate is way higher and legal recourse is virtually impossible across borders.
     
    Last edited: May 11, 2015
  9. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    Just took a look. Saw that both were "Classic Menswear" stores. im(fairly extensive)e, the proprietors of those stores are generally the most rulebound AND most resistant to change. I know a fair number of streetwear and contemporary stores/chains that have invested considerably in marketing and selling abroad, and/or are just ready and willing to play fast and loose with tax laws.

    I think that it is a combination of the age and outlook of the proprietors and their customers, the global demand, for say, the latest designer Stan Smith collabs, and the relatively small pool of customers used to the old "black book" way of doing things, that drive these things forward. There are still a sizable number of stores, many of them "classic menswear" stores, that really don't like that the world is changing, and are not particularly enthusiastic about changing with it. The growth that I see is not in those stores, but in pure play multi brand stores like Mr Porter or No Man Walks Alone, and in online MTM and MTO, where customers feel that they are getting both a good value proposition as well as "modern" customer service.
     
  10. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    And yet, every streetwear & denim store I know in Europe does a ton of business overseas. And that is category with a lot more fraud, traditionally. I know half a dozen French stores, selling things like Visvim and Common Proijects, and Junya, who tell me that nearly ALL of their sales are to the US (mostly west coast).
     
  11. gdl203

    gdl203 Senior member Dubiously Honored Affiliate Vendor

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    Of course - that's price dumping. They manoeuver around brands' regional distribution strategy and MSRP pricing with VAT deductions and aggressive pricing, and specifically target the US, while often aiding customs fraud themselves by writing down value. I don't think people who profit from fraud and illegal activities are the ones who worry the most from being victims of fraud...
     
    Last edited: May 11, 2015
  12. habitant

    habitant Senior member

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    I suppose it doesn't make sense that my go to store nowadays is in Belfast, while I live in Vancouver, BC.
     
  13. Find Finn

    Find Finn Senior member

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    Around here it's insanely easy. You have to registre your business as import/export, which most shops are anyway and takes 30sec on tax services website.

    VAT is a monthly, quarterly or bi yearly thing pending on revenue, you have to fill out a bunch of boxes (5 max) on the same website, purchase, sales in EU, sales outside EU etc., it adds it all up it self and tells you how much you have to pay in VAT that month.

    So it's not that difficult for the shops to handle the VAT refund, as it's not a refund per-say.
     
    Last edited: May 11, 2015
  14. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    That's not a fair characterization. While that is certainly true of certain stores, it's not generally true across the board. It's not like an EU store suddenly gets better margins because they sell something for less. Last time I was at a tradeshow, the wholesale prices in euros and in dollars were not different.

    If you want to blame someone, blame 1) vendors - cartel pricing is illegal and unethical, but a vendor can choose to not sell to a retailer they feel underprices their product or will not abide by their regional distribution strategies - this is not impossible. Dries van Noten implemented this effectively over a single season, 2) tax authorities for lax enforcement. I have never asked anyone to lower the marked price for me, or to use a specific shipper with the intent to avoid tarriffs, but I do not feel that it's reasonable to expect anyone except for the governments and perhaps the shippers, to figure out the bill, and 3) retailers. I buy mostly from stores in the EU and the UK not because product is cheaper, but because, for the most part, I cannot find the products that I want in the US. In that case, and that is usually the case, the price arguments don't even apply.

    Just as an example, it in past little while. I have bought sneakers and hats from overseas stores, at retail price. And after tarriffs, shipping, etc..., the price compared to the US price was about 10% lower. That's not enough to make the additional hassle worth it, especially since returns would be prohibitively expensive. I feel that American retailers buy much more conservatively than European stores, even now. That may be as result of the insane markdown schedule here, but that is, again, not the fault of overseas retailers, but of US retailers.
     
  15. dieworkwear

    dieworkwear Senior member

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    That can be a big deal though, depending on the price of the thing you're buying. I don't know if this technically qualifies as price dumping, according to WTO rules or whatever, but in practice, it kind of is. A lot of people on this board will seek out European shops purposely for certain things, because it's cheaper overseas. Common Projects is an easy example. Who buys those from a US store?
     
    Last edited: May 11, 2015
  16. gdl203

    gdl203 Senior member Dubiously Honored Affiliate Vendor

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    I am not looking to blame anyone, but merely answering why Euro stores are targeting aggressively US consumers, even though it may seem like there could be greater fraud risk.

    Everyone in the process is acting in their respective best interest, the store, the consumer, etc... I can't blame any of them.

    As you indicate, CBP completely fails at enforcing duties and therefore creates this gaping loophole. Until CBP gets its sh!t together, as you also correctly indicated, it can only be resolved by the brands themselves - they need to better think about regional marketing and distribution strategies. Neither the stores profiting from it, or consumers looking for lower prices can solve this.
     
    Last edited: May 11, 2015
  17. LA Guy

    LA Guy Opposite Santa Staff Member Admin Moderator

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    Yeah, I was thinking about the WTO anti-dumping regulations. Notwithstanding that such an action is highly unlikely to be taken, I don't think that the case for litigation would be particularly strong,

    Really, I think that US retailers have created a toxic environment for themselves, combined with vendor complacency/laziness/fear, and that while guys like @gdl203 are absolutely right to be pissed off, the industry as a whole doesn't have a leg to stand on.
     
  18. gdl203

    gdl203 Senior member Dubiously Honored Affiliate Vendor

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    I'm not really that pissed off really - it's part of the competitive landscape. US niche retailers have to live with this.

    I find it odd that you do not understand that it is an unfair competitive advantage though, because it is. When brands communicate MSRPs, they do it an relatively leveled basis across geographies. When a European retailer targets US customers with MSRP - 15-20% off as their base price , it starts already off balance... They don't even have to mark it down, and they technically respect the suggested retail price, but in a world where everything is a couple of clicks away, that makes a difference. Do you remember the arguments that people tried Rick Owens jackets at Atelier but would buy them from Germany because it saved them $500. Can't blame the customers for doing that, right? Both stores respect MSRP, right? Not an unfair competitive advantage?
     
    Last edited: May 11, 2015
  19. Find Finn

    Find Finn Senior member

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    The main issue is that it doesn't work both ways, we don't have the same advantages that the americans have buying in Europe have. If it was the case I don't think anyone would be complaining.
     
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  20. dieworkwear

    dieworkwear Senior member

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    Well, if it worked both ways, then there wouldn't be price dumping in the first place.
     
    Last edited: May 11, 2015
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