Cool Lights European Group Buy

Spartacus

Spartacus

Veteran
For those of you in the EU (or around it...) thinking about getting CoolLight fixtures, but seeing the cost effectiveness drop when adding shipping from China to your country, Richard (CoolLights) suggested doing a group buy.
This would mean trying to fill a container with European orders only (Richard, about how many fixtures are we talking again...?), shipping this container to a harbor (Hamburg? Italy? The Netherlands?) and
a) picking it up there
b) get an escrow agent, a middle man, who´ll distribute the things via UPS/DHL/FedEx...

So Europeans would have to pay the regular price, plus local shipping to each country or the drive to the harbor...


So, share your feelings with the group...
 
I'd be happy with that if it's actually possible - Rotterdam is the best option for entry port.
But I was wondering if all of the Europeans interested in buying Richard's lights made an order at the same time wouldn't Richard be able to negotiate a shipping deal with DHL or FedEX?
I had a company who shipped products worldwide and we negotiated a deal with Fed Ex based on the volume we were expecting. If we didn't meet that volume then we paid the higher amount. So if I had say 15 customers and shipped to them at the same time then it would be cheaper. We agreed to do this on a monthly basis.
I was a little surprised at just how expensive the shipping costs from China are and one needs to remember that in Europe we get charged duty and VAT on the total cost - so we are paying duty and VAT on the shipping costs as well.
Richard if your company is registered in the U.S you can and should get good deals so that you can ship the lights from the U.S to Europe at reasonable cost. If your company is registered in China then with all the shipping out of China it should be possible to get business rates with some of the major transportation companies.
I'm sure if you look at the European market of 250 million people you can figure out a way of getting your products to them at reasonable cost. If you work this out then I'm ready to place my order right away.
 
I think logic108 is right, it would cost a lot less in the end to negotiate a good deal on shipping from the US to Europe. Dispatching intra-Europe, if handled by a professional company or middle-man that has to clear the goods from Rotterdam (for example) would costs pretty much the same as a US-Europe trip.

Now, if one of the group-buy users would take care of clearing the goods and dispatch them through a cheap transport, it could cost less, but he'd have to pay the VAT+customs and probably prepay the transport for everyone. I'm not sure anyone would want to do this.
 
Yes, what speaks against monthly or bimonthly Europe deliveries? If you advertise it on big photographer and filmmakingcommunities you should be able to ship 20 parcels a month.
 
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Bimonthly should be doable with a reasonable amount.
Only problematic thing I see is, what happens when let´s say after 4 shippments the demand goes down, and the people who already placed and paid their order are charged more from DHL/UPS because the minimum shipping volume wasn´t met...?

Anyway, logic108s suggestion sounds a lot more managable than doing a one time huge container order, I think for most of us it is OK to pay a higher price than US customers, just not the high individual shipping costs from China...
 
Wow, good start. Okay lets go down one at a time and comment on each comment.

Spartacus,

Thanks for getting it rolling. I know you're not completely convinced about the idea but lets make this our "green light" period where we simply believe it can happen and think of all the ways we can make it better. Later, we'll go into a "red light" period where we put the brakes on and say "okay now what are all the ways this can go wrong or that need a lot of work." This is an effective technique in brainstorming to keep it structured and yield better results.

Regarding how many fixtures, I think 200 should be a good starting point but the more the better for everyone's standpoint. Obviously, the more you put in a container, the more the sea shipping cost becomes practically nothing in the overall scheme.


Logic108,

I'm not sure about best port and have yet to research that. My thinking was that the best port would be the country with the most group buyers in it to reduce their point to point shipping charges. There also needs to be as much effort as possible to reduce double or triple taxation with the VAT which is really ridiculous and there must be someway to accomplish that.

As far as point to point from USA to Europe, you're absolutely right. There are negotiated rates but it all depends upon shear volume. We definitely haven't had the volume yet to talk to them. We're not B&H who has a huge volume worldwide--no doubt. Usually you have to take a history to the table before they listen to you. Which came first, the chicken or the egg? ;-)

Another thing I don't like about that is the deal about if you don't meet the volume then you have to pay the higher price. I get left holding the bag at that point and all my profit disappears or worse we lose money. I prefer to know what all the costs are up front so we are prepared for all the scenarios. Thus I can't contemplate any scenario where there "might" be more charges later (for you or me) after I've already collected money from customers and shipping. We can't do business like this because I can't come back and ask for more money later. Its just not professional.

I still doubt that we could get the point to point shipping low enough that you'd find it palatable. Remember you still have to pay customs duties. Seems terrible to me that we pay customs duties and shipping to get it to USA and then more customs duties and shipping to get it to Europe.

On shipping from China to Europe point to point, I doubt it will be much better, but at least we would only be paying one set of shipping and taxation. The idea with using the sea shipping was that we could reduce the shipping cost overall and then Cool Lights (aka "me") would absorb the taxes thus keeping things simple for the customer.

Ldom,

I commented already on how I feel about sending from USA to Europe--in regards to over taxation on that whole trip from China to USA to Europe. It's just not efficient so I hope we can find the most efficient circuit possible to get the fixtures to you guys.

I've thought of this idea of having one of the group buy people be the agent but I think it falls down for a number of reasons. 1) that person is overburdened with work . 2). what is the overall trustworthiness of the person who none of us may know or have dealt with before. It's better to have the person neutral as possible and beyond reproach. A licensed and bonded person. Someone dispassionate about the products and just interested in making sure everyone gets what they ordered. Sacrificing 10% or so in the transaction to guarantee this will allow me to sleep better at night and I hope all else involved in the transaction as well.

On the issue of service. It would however be really cool if we found at least one electronically/electrically savvy and willing person in the group that could serve as a service depot for Cool Lights. In this way, we could forge a deal with them where we send a certain extra amount of fixtures to that person to act as a guarantee for quick replacement / service such as what we have today in the USA. A contract would be necessary between Cool Lights and them for sure.

Steve Holmes,

A better question is how much would shipping be from whatever port to you. For instance Rotterdam. Because I'm trying to figure out how you all don't have to pay any taxes. Ideally, the goods would come into the EU somewhere and not be double taxed at all. Shipped to each country from the source by the escrow agent. If there's no extra VAT on crossing from whatever port / country to another one--that's the best way to go. Cool Lights would absorb all the initial customs and VAT. You should only have to pay the point to point shipping from port of entry to whereever you are based.

Muroshi,

No problem with that, other than that we definitely would need to hire some help as the shipping process itself is deceptively time consuming and would take away from our other development activities for new products. International shipping is even worse and adds lots of paperwork. We can easily spend a half a day on an international shipment with all the various red tape you have to go through. Also, I hate this scenario of point to point because often these companies come back to us after we already gave them the package and have an excuse for why it has to be higher. Can't stand that! Nothing makes me more mad because they've got the package already (hostage so to speak) and want more money and there goes some of our profit. Thus, you really find me negative on point to point at all. There has to be a way so that we know all costs up front and no one gets left holding the bag--me or you...

Everyone,

Lets try to keep on the idea of sea shipment and disbursal from an EU country port before we get too negative on the idea. I really think with our experience so far in point to point shipping that there are way too many issues to deal with for both sides where there are uncertainties in cost. Many in Canada will tell you for instance that even after a company charges for shipping, UPS will come back to them, the customer and ask for other padded charges. This infuriates me when it happens to me and it should you too. There is also the issue of damage in shipment. Much more likely to be damaged in a point to point International transaction than in the sea shipping scenario which is relatively mild and easy on the packages as long as you use good packaging (and we do).
 
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I can't understand the problem as UPS and Fedex have highly standardised processes. With OsCommerce, which you use as webshop you should be able to send customers addresses via PDF to your agent in china, which could send bimonthly 20 parcels in a batch direct from the factory. If you wait to fill 200 orders, that could last 6 months or something.

But I intend to get lights before march.
 
Just one more suggestion - I once shipped a pallet of about 300kg in weight to Japan from Finland by air - charges are by volume and worked out to be about 2 euros per kg. One needs to negotiate the deal with an airline and then use a freight forwarder. This way you could send one pallet of coolights to say Germany and then get them forwarded on to Switzerland or where ever.
Seriously Richard contact the freight/cargo departments of the airlines that fly from China to Europe. If you go to them directly I know for a fact it will be cheaper. It might be that you can arrange a deal with one airline or forwarding company much more easily then with DHL or FedEx. There are definitely ways around this.
One other off tangent idea is for you to get B&H to stock your products as a special order, I've seen other companies do this with B&H.
If transport cost are reasonable then I have no problem paying import duties and so on.
 
Why shouldn't a container fright not be charged import duties? Did I miss something here? Yeah, B&H would be another a lot easier way to go for you. And well, you have a bigger customerbase with such a distributor. If it's possible: Do it.
 
I don´t think Richard meant he would distribute through B&H...
As for customs: the EU ain´t "all equal", every customer will have to pay customs and VAT in his respective country.
But it would be important to NOT having to pay customs at the destination port, eg Hamburg, when an escrow agent directly redistributes to the other EU countries...

Without dismissing the container ship solution, I´d like to know more about the "air cargo" solution logic108 proposed.
Maybe air cargo is a little more flexible volume-wise, because planes can´t carry as much as cargo ships of course, so we wouldn´t have to wait untill a container order has accumulated...
We´d still need an escrow agent though, but I´m pretty certain, you´ll find specialised companys for that eg on Europe´s largest Cargo Airport Frankfurt...
Maybe this would be a good compromise...?
 
You don't need to pay customs inside the EU. Don't know about VAT. Maybe Wayne could drop in here and give some advices, he ships his SGpro-adapters from Brighton, England.
 
Not inside the EU of course, but when the fixtures enter the EU eg at the destination (air-)port, customs will have to be paid...
 
In either way, I'm in a bad situation in Switzerland. I guess I would pay customs twice with this container-model. Leaving hardly any advantage over point-to-point.
 
logic108 said:
Just one more suggestion - I once shipped a pallet of about 300kg in weight to Japan from Finland by air - charges are by volume and worked out to be about 2 euros per kg. One needs to negotiate the deal with an airline and then use a freight forwarder. This way you could send one pallet of coolights to say Germany and then get them forwarded on to Switzerland or where ever.
Seriously Richard contact the freight/cargo departments of the airlines that fly from China to Europe. If you go to them directly I know for a fact it will be cheaper. It might be that you can arrange a deal with one airline or forwarding company much more easily then with DHL or FedEx. There are definitely ways around this.
One other off tangent idea is for you to get B&H to stock your products as a special order, I've seen other companies do this with B&H.
If transport cost are reasonable then I have no problem paying import duties and so on.
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We have used Air Cargo on DHL before. Never went to an airline directly. The problem I saw with it was the necessity of the customer(s) going to the airport to pick up the fixtures because one reason its cheaper is there is no direct to door express service with this.

On the idea of B&H, it all depends upon the percentage they expect. Amazon wants 55% on many items so it may be similar. Personally I think thats a huge cut for simple drop shipping from manufacturer to customer in most cases.
 
Spartacus said:
Richard,
how do you plan to "gather the group"?
Will there be an extra forum?
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Was thinking about having a Group Buy forum on my website support forum. Having one thread per country or region depending upon how the mechanics of all this shake out. For instance, I think if we try this in Europe, Australia should be next because there's lots of interested people there as well. Perhaps notify people about the group buy threads here and let them sign up over on Cool Lights Support forum would be the best way I can think of right now.
 
muroshi said:
Why shouldn't a container fright not be charged import duties? Did I miss something here? Yeah, B&H would be another a lot easier way to go for you. And well, you have a bigger customerbase with such a distributor. If it's possible: Do it.
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Container freight is charged import duties to the importer. VAT may not actually be charged until the actual sale to a customer by the middle man. When a customer has bought some of our fixtures (in England for instance) they've paid about 3% or so customs duty and then a VAT tax. Customs duties may differ from one country to the other but we've never had one person report them as outrageous thanks to our careful classification of the goods as "stage lighting" which is a non-controversial category.
 
muroshi said:
You don't need to pay customs inside the EU. Don't know about VAT. Maybe Wayne could drop in here and give some advices, he ships his SGpro-adapters from Brighton, England.
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Actually you do since all my customers in England and elsewhere have reported they have paid customs even though they were very reasonable in all cases. I understand that customs tax is paid by the importer and thus, if I was the importer through an escrow agent, I would pay the customs tax and its just a sunk cost that I bear (as do all such importer/dealers) within the cost of my goods. VAT is another story and usually paid by the end customer for the goods in my experience. With our point to point shipments to various parts of Europe, each customer paid customs tax and VAT since they were both the importer and end customer. I believe the way it would work in this instance is the escrow agent would collect the VAT for each of you based on your country and would be charged with paying that to your respective tax agencies in each country. But I am not totally sure about this VAT though and this requires more research.
 
muroshi said:
In either way, I'm in a bad situation in Switzerland. I guess I would pay customs twice with this container-model. Leaving hardly any advantage over point-to-point.
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Well we just have to find a legal way around this. I really find it hard to believe that double taxation is necessary. There's generally protection against this found somehow.
 
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