I am currently working in South Africa and always pick up some fishing mags when I am out here.

There is one main Fly Fishing mag that is published 6 times a year which seems strange given how popular FF is over here.


Anyway, the latest one has a big centre page 4-page advert for Airflo including their new GT and Tarpon lines.


What absolutely floored me was the price - R750 per line!!!!

At around Ten Rand to the £pound, that makes them circa £75 a pop which is disgusting as I cannot fathom how a line that is usually around £30-£35 in the UK can suddenly double in price when it hits South Africa.


Can anyone shed some light on this and whether this is how much they actually cost in SA Tackle Shops as I have found Cortland 444's for around £35-£40 in a few SA shops (AndreB??)



If they are that expensive in SA then I am shocked. Then again, it seems anything with a 'sport/luxury' tag on it in SA causes the price to sky rocket.



Ben

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Ben
I think you might find that the import tax in SA is 40% for items described as luxury goods...I believe they have a similar system to the harmonisation codes in the US so you might be able to find a loophole by reclassifying the lines as strimming wire for example which may conform to a different harmonisation code perhaps...the problem is if you get caught they may backdate the tax to previous imports.
I would also expect insurance is very expensive shipping to SA.

I export to Kenya quite alot and that is great fun....not only do you have to allow for the import tax you also have to allow $75 for the customs official to find the shipment and another $75 for the car park attendant to open the gate to let you out of the compound!
There are ways around paying the import tax but I cant make it public...
The US is more interesting the way they set the tax against the harmonisation codes....the tax is set against the difference between the import cost and the RRP.....but it must drive the IRS mad policing it,although it actually seems a fairer system. Canada is different still!!
As I have made clear several times on this forum.....the difference between gross and net cost is huge, whether importing or exporting.

As 60% of the population of the UK do not work in the private sector....and therefore this forum , only 40% understand basic business acumen.
So....if anybody is interested here is a question:

You buy a product from China costing $150 and sell it for $300 what would be an acceptable realistic profit as a net cost of sale?

To make it more interesting I will give a BLOKE prize for the person who comes up with the answer, what I am looking for is the working cost model incorporating preceived overhead not a % figure

I will however give you a basic clue on how to start the exercise......you run a small business and can only pay yourself £3.27 per hour, which is what I earn....and you have to account for working seven days a week and 16 hours a day.

Mick
P.s For those of you who work for the government here is a brief description of what "overheads" are.
Understanding Overhead

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In an export-to-India project I was working on the customs forms (i.e. a set of different ones) had to be filled out 7 times and there was a layer of bureaucrats employed to spot discrepancies in the information supplied. The equipment, when eventually delivered, was dropped from the crane in the harbour and it was deemed cheaper and easier to fly in a couple of maintenance people with the spare parts hidden in luggage.

There is a difference though - import tax is generally the same as VAT/sales tax and is generally charged on the cost of the goods + cost of shipping Customs duties are charged variable rates on the basis of harmonisation codes.

A couple of points - surely you should be setting a sales price that reflects the perceived value of the goods and working backwards to see if there is a profit in it?

Ah, now then. To my mind, a realistic profit is not necessarily an acceptable one.

Well your link to understanding overheads would not work in the UK. If you have what the UK taxman calls a static business ie a shop or warehouse you cannot claim back travel costs to and from that shop or warehouse as you can with the US IRS. Nor can you place a realistic profit as a net cost of sale.If I work alone from home my overheads would be virtually nil whereas if I have a town centre shop with staff my overheads could be thousands of pounds a week so regardless of whether i bought the iitem for $1 or $150 the realistic profit would vary from business to business. Also you need to factor in whether you pay out development and design costs for the item or whether you just rip some other companies product off and sell it as a "no name". I know of some companies that need to buy an item in for a $1 and sell it for $20 just to make a profit after overheads and others who import a similar item from China at $1 and are are making a profit selling it for $3 after paying the shipping fees and vat on the import. Its all relative and can't be fixed.
I take it the £3.27 an hour you pay yourself does not take into account the profit you make on each item you sell.

Any profit is acceptable presuming the price is paid by the buyer

Should have included the biggest problem is the customers perceived value. If he sees a box/rod advertised on the internet for £5 that looks like the fly box/rod he bought in the shop last week for £20 he thinks he has been ripped off.
However the company making / selling the box/rod on the internet could well be selling a look alike from China paying no design or development costs and using inferior materials such as chromed mild steel where the more expensive item uses stainless steel for the box hinge or a filled cork handle instead of AAA Portuguese cork handle on the rod. I actually know of one importer that purchased rods with local Chinese mild steel gun metal coloured snake guides and those guides wore out within 1 year if the rod had heavy use (was used two or three times a week)
What the customer does then is to start buying the "no name" internet products not realising that by buying the cheaper item he is probably getting an inferior product and the manufacturer of the more expensive item (which is not now selling) ceases production and development of new products.
Anyone who believes these cheaper items are overruns are fooling themselves. With computer technology the material and machinery used to make 100 items makes just those 100 items NOT ONE ITEM MORE.
There is only one way to produce items cheaper and that is to make them cheaper so you reduce costs, use slightly inferior quality materials and or cheaper labour such as 6 year old kids in a lot countries such as India and China which of course is why most people living in the UK that do actually work are now employed by government rather than private industry. Me ? I retired last year so I can sit back and enjoy

Not if investors have expectations/requirements for double digit rates of return, which seems to be the norm these days (at least it is in the sort of projects I get involved in). Mind you, thats a different issue from Ben's question I guess.

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"I take it the £3.27 an hour you pay yourself does not take into account the profit you make on each item you sell."

I WISH!

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Some very saliant points I agree but I have to take issue with your inference in some respects.
I own a business in China and I do not emply 6 year old kids, I employ highly trained skilled workers who build fishing rods to a very high quality, my senior engineer has a degree in composite engineering and has spent all his working life with carbon fibre pre-preg and recognised as an expert in his field. His standard of living is very comfortable indeed believe me. Our workers are well treated and most live on site. We are resonsible for their welfare from the time they wake up until the time they stop work and I have eaten in the staff cateen and it is most acceptable.
The one thing I must put over is that unlike the UK if the staff dont like working they will vote with their feet and just walk....because of the demand for good quality workers they will get another job in hours....not weeks or months.
There is a current misconception that everything that comes out of Asia is cheap tat, this is simply not the case.
M

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