eevBLAB #20 - Franky, Ebay, & Hong Kong

[EEVblog]

Franky from the Ebay store 99centHobbies dropped by the lab and we had a quick chat about ebay, selling, shipping, and the Hong Kong electronics scene compared to Shenzhen China.
http://stores.ebay.com.au/99centHobbies

[coppice]

If you want to find any electronics scene in Hong Kong you'll need a time machine to get back to the early 90s.

[Barny]

I hate it when the shipping is includet in the item price.

The tax-free value is calculated only with the item-price.
But if the item price is over 22€, vou have to pay the 20% tax for item and shipping.

[DimitriP]

I hate it when the shipping is includet in the item price.

The tax-free value is calculated only with the item-price.
But if the item price is over 22€, vou have to pay the 20% tax for item and shipping.

Here is your guy:

Director General Hans-Georg Kramer

The Directorate General for Customs and International as well as Organisational Tax Issues is responsible for ensuring appropriate tax revenues - using a new organisational model - modern, customer-oriented and efficient.
 

[k2teknik]

The tax-free value is calculated only with the item-price.

That may differ from country to country.

[cezar]

Thanks for the video Dave. I've looked at his Franky's store and looks like he is mainly interested in top quality products - The ebay score speaks for itself.
He seems to be a nice chap too.
Just purchased a few items  - I hope Dave gets commission

c.

[VinzC]

Quite an interesting video and man. I like to say it's a considerable advantage to see whom we're buying from or selling to. Commercial relations also are human relations first and a visual contact is an asset (should work both ways, of course).

Other than that I would have been interested in confirming (or not) what someone told me about the Chinese and CCC^*. As he spent a few months in China he said to me their pride lies in satisfying their customer, they want to honour the customer wishes and desires. So if their customer wants even lower prices they actually will honour that, making no compromise like we would (wish to). He said the Chinese already manufacture at lower prices by default and even good, quality hardware; it's only (occidental?) companies, wanting to maximize their profits, who kind of "force" even lower prices and flood the occidental markets with cheap, crappy devices. There undeniably are quality-manufactured devices but China is mostly known from the cheap crap, which, if that theory is correct is mainly due to the pressure from profit-oriented corporates.

It might be overly simplistic but that theory sounds credible to me somehow as the Asian culture and philosophy is fundamentally different from ours. It would have been interesting to know Franky's point on that.


^* Chinese Cheapy Crap

[iloveelectronics]

Quite an interesting video and man. I like to say it's a considerable advantage to see whom we're buying from or selling to. Commercial relations also are human relations first and a visual contact is an asset (should work both ways, of course).

Other than that I would have been interested in confirming (or not) what someone told me about the Chinese and CCC^*. As he spent a few months in China he said to me their pride lies in satisfying their customer, they want to honour the customer wishes and desires. So if their customer wants even lower prices they actually will honour that, making no compromise like we would (wish to). He said the Chinese already manufacture at lower prices by default and even good, quality hardware; it's only (occidental?) companies, wanting to maximize their profits, who kind of "force" even lower prices and flood the occidental markets with cheap, crappy devices. There undeniably are quality-manufactured devices but China is mostly known from the cheap crap, which, if that theory is correct is mainly due to the pressure from profit-oriented corporates.

It might be overly simplistic but that theory sounds credible to me somehow as the Asian culture and philosophy is fundamentally different from ours. It would have been interesting to know Franky's point on that.


^* Chinese Cheapy Crap

I grew up in Hong Kong during the British colonial era so it was very different from mainland China. In many ways people from HK are still very different from mainland Chinese people including how we do business etc, so it's hard for me to confirm or deny what your friend told you. Based on my own personal dealings with suppliers and sellers from mainland I suspect there might be some truth to what you said.

[zapta]

Franky comes as a nice and decent guy. I wish Dave would let him talk with less interruptions.

[Macbeth]

What a thoroughly nice chap! I've heard nothing but good about Franky and his ebay store. I will have to order something one day 

@Barny, I don't know how it is in Austria, but in the UK you have to pay tax on the price of the goods + the shipping. I would be surprised if Austria is different as I believe the derisory tax thresholds and rules are mandated by the EU who don't care that the cost of collecting these pittances and the bureaucracy is more of a drain on the economy than just letting them through. The exception is if the goods are a gift in which case the tax may apply on the goods only, not the shipping.

Having said that pretty much anything that ships (to the UK) China Post or Hong Kong post appears to just be let through no matter what is written on the CN22. I don't know about Franky but most sellers tend to list the item as $5 - $20 USD without asking and so under any threshold.

[mrpackethead]

Prices seem pretty high to me?

[CrashO]

@Barny, I don't know how it is in Austria, but in the UK you have to pay tax on the price of the goods + the shipping. I would be surprised if Austria is different a

In the Netherlands (so presumably the rest of EU too), the general rules regarding outside EU imports are:
0 - 22 euro, excl shipping. Free from any taxes
22 - 150 euro, excl shipping. You pay 21% tax (VAT) on the goods AND on shipping AND you get extra "handling" costs for processing the taxes (UPS ~€10, DHL €13, PostNL €13, etc)
150 or more, you pay 21% tax on the goods AND on shipping AND extra import charges based on the TARIC code.

So what Barny is referring to, is if for example a eBay seller sells Probes for 5 euro, with 1 euro shipping, and you order 4 of them. The total becomes €20 goods + €4 shipping. So free from taxes.
If the 1 euro shipping is integrated. It becomes €24 goods, free shipping. So above 22 euro.. Meaning you will have to pay 24 * 0,21 = €5,04. Plus handling costs.. So you will have to pay between €15 and €18 euro èxtra to the mailman, because the seller wanted to include it in the price 

Of course chances are small with regular small packages because there is so many of them coming from China/HK and everything is marked gift from China away..., but if they get you.. your €20 probes double in price just because of how the seller offered it to you.

So usually when I order stuff from sellers who include shipping. I just make multiple < 22 euro orders. And hope they don't become friendly and combine it for me in one large package  (has happened..)

[Macbeth]

Ah yes, I double checked. It is the value of goods (not shipping) if valued <=£15 in the UK. If the parcel is a gift then you are allowed up to £34 value of goods. But once the VAT hits it has to be paid on the full value including shipping, duty, and insurance. Plus of course the post office / parcelforce fee of £8-£13.50 for employing a team of crack mathematicians to work out tax = value * 0.2

[PA0PBZ]

In the Netherlands (so presumably the rest of EU too), the general rules regarding outside EU imports are:
0 - 22 euro, excl shipping. Free from any taxes
22 - 150 euro, excl shipping. You pay 21% tax (VAT) on the goods AND on shipping AND you get extra "handling" costs for processing the taxes (UPS ~€10, DHL €13, PostNL €13, etc)
150 or more, you pay 21% tax on the goods AND on shipping AND extra import charges based on the TARIC code.

Although I have shipments from all over the world with values from 10 - 2000 euro I never ever got to pay tax or import charges.
So am I just lucky or do they charge my employer automatically because I use my office address as shipping address? 

[Barny]

@Barny, I don't know how it is in Austria, but in the UK you have to pay tax on the price of the goods + the shipping. I would be surprised if Austria is different a

In the Netherlands (so presumably the rest of EU too), the general rules regarding outside EU imports are:
0 - 22 euro, excl shipping. Free from any taxes
22 - 150 euro, excl shipping. You pay 21% tax (VAT) on the goods AND on shipping AND you get extra "handling" costs for processing the taxes (UPS ~€10, DHL €13, PostNL €13, etc)
150 or more, you pay 21% tax on the goods AND on shipping AND extra import charges based on the TARIC code.

So what Barny is referring to, is if for example a eBay seller sells Probes for 5 euro, with 1 euro shipping, and you order 4 of them. The total becomes €20 goods + €4 shipping. So free from taxes.
If the 1 euro shipping is integrated. It becomes €24 goods, free shipping. So above 22 euro.. Meaning you will have to pay 24 * 0,21 = €5,04. Plus handling costs.. So you will have to pay between €15 and €18 euro èxtra to the mailman, because the seller wanted to include it in the price 

Of course chances are small with regular small packages because there is so many of them coming from China/HK and everything is marked gift from China away..., but if they get you.. your €20 probes double in price just because of how the seller offered it to you.

So usually when I order stuff from sellers who include shipping. I just make multiple < 22 euro orders. And hope they don't become friendly and combine it for me in one large package  (has happened..)

Thats exactly what I wanted to say.

But don't count on the fact that they aren'nt able to check every package.

There are some honkong-shops which get a 100% inspection.
Some years ago Hobby King was one of them.

[Macbeth]

...the absurdity is not so much the miniscule tax at these low levels, but the "processing fees" which when added on more than double the cost of these goods. So the postman makes more money than the manufacturer, retailer, original postal courier, etc. Then the VAT man with all his efficiencies (hahaha) gets to process 4 EURO when the cost of the transaction to the taxpayer is probably more like minimum 50 EURO. It is insane. The UK was a little bit more generous until it harmonised with EU. Yet another good reason to get out of that unelected dictatorship.

Now look at OZ, where Dave doesn't have to pay anything in import duty or tax on goods up to $1000 !!! Don't forget OZ has about the most severe customs agency in the world too!

[nctnico]

So usually when I order stuff from sellers who include shipping. I just make multiple < 22 euro orders. And hope they don't become friendly and combine it for me in one large package  (has happened..)

That is one way of doing it but in my experience most Chinese sellers put a much lower value on the customs form.

[Neganur]

I don't think the EU has forced you to have processing fees on the VAT thing, that's something where you should put the blame elsewhere I think. I at least don't  pay any processing fees if I am doing the clearance myself (yes I would, if I asked the courier to do it for me and they have just as nuts fees as the ones you refer to)

[tszaboo]

Hi Franky! 
I've hear all the stories how the China and Hong Kong shipping is subsidized, to generate export. It is outrageous system now. So what happens is: The country sending goods -from- gets the entire fee from shipping. It was all fine when the two direction was equal, bot ends got their share. Now there is a magnitude higher incoming mail, which has to be delivered from free. Means, when I order something from china, the mailmen bringing it to the door gets nada. And of course one postmen earn more here than entire villages in ie east europe.
So while you can internationally ship something 200g for 4 dollars, I have to pay more to ship the same item within the country. It costs 43 EUR to send something 1kg to Dave. For the reference, the same is 17 EUR from Germany. It is cheaper, including gas, to drive  to another country to send my *CENSORED* mail. BTW, Dave, a very good reason why you dont get too much mail from certain countries.

[Macbeth]

I don't think the EU has forced you to have processing fees on the VAT thing, that's something where you should put the blame elsewhere I think. I at least don't  pay any processing fees if I am doing the clearance myself (yes I would, if I asked the courier to do it for me and they have just as nuts fees as the ones you refer to)

Actually there is some way around this. I would urge all UK importers who have their stuff go through EMS (therefore the mandatory £13.50 Parcelfarce fee for actually holding the parcel longer so they can get their trolls to tap X . 2 on their calculator and then not phone or email you, but send out a snail mail letter asking for payment for release of this "EXPRESS DELIVERY"  - which in my experience means the fucking thing takes LONGER than sending it International First Class!)

Insist the seller writes on the CN22 - "GOODS TO BE DECLARED BY IMPORTER" or "TO BE CUSTOMS CLEARED BY IMPORTER".

It is probably unlikely to stop the bastards. It was always illegal when they held the post back in this way but they carried on with it anyway (unlike the commercial couriers who would invoice you after the event - but realise they couldn't demand their insane clearance fees if you just paid the taxes alone). However when the Royal Mail was privatised one of the sweeteners was the government cleared this up and allowed them to carry on holding international mail like a troll for uncontracted "payment processing services". It doesn't mean they are allowed to with the International Mail Union and all that stuff, but they do it anyway.

[coppice]

Hi Franky! 
I've hear all the stories how the China and Hong Kong shipping is subsidized, to generate export. It is outrageous system now. So what happens is: The country sending goods -from- gets the entire fee from shipping. It was all fine when the two direction was equal, bot ends got their share. Now there is a magnitude higher incoming mail, which has to be delivered from free. Means, when I order something from china, the mailmen bringing it to the door gets nada. And of course one postmen earn more here than entire villages in ie east europe.
So while you can internationally ship something 200g for 4 dollars, I have to pay more to ship the same item within the country. It costs 43 EUR to send something 1kg to Dave. For the reference, the same is 17 EUR from Germany. It is cheaper, including gas, to drive  to another country to send my *CENSORED* mail. BTW, Dave, a very good reason why you dont get too much mail from certain countries.

Shipping within China is fast and cheap. Order something from Taobao at the far end of the country and it arrives the next day, with very low charges. Chinese postmen may be cheaper than western ones (at least for now), but trucks and gas costs are like any other country. So, its not just a matter of the China side doing only the cheap part of international mailing, but taking all the revenue. They really have a well developed, efficient, delivery system.

[timelessbeing]

There is another small incentive for eBay sellers to offer free shipping. They automatically get 5/5 star feedback rating in the shipping category on that item.

On eBay, I personally prefer the items with free shipping. Less math I have to do in my head.

It still boggles my mind that someone can manufacture a non-trivial item, package it, ship it thousands of kms across the planet, and have it delivered to my door, for only one dollar. Just think of how many hands it passed through. The dollar covered all the man hours, materials, infrastructure, business overhead, fuel, etc. etc.... And yet there's still something left over for someone to take home! Here, $1 would employ a minimum wage worker for just 6 minutes.
 I heard a (allegedly Chinese) saying once ... fortunes can be made on paper thin margins.

Great interview with Franky. I have corresponded with him in the past, and he's a super nice guy. I wonder what his regular job is ...

Yes as someone else mentioned, Dave needs to "zip it" during interviews.  Ask your question, then let them talk. We want to hear the guest speak.

[Simon]

I find free shipping a night mare, the problem is ebay encourage it and if I am selling 10 resistors with a value of £0.20 ebay makes me list for at least £0.99 so I have to include free shipping, but then say someone wants to buy 10 values, so now I have to add discounts, but ebay can chnge their system at any time to ruin it. dealing through ebay is a nightmare. I wish I could charge shipping seperately, it would be less work, but ebay is made for people selling items over £10.

[timelessbeing]

>> if I am selling 10 resistors with a value of £0.20 ebay makes me list for at least £0.99

Why don't you make it 50 resistors for £1 ?

[coppice]

I heard a (allegedly Chinese) saying once ... fortunes can be made on paper thin margins.

You just need to gather up that paper until you have 144 boxes of it, and then you have a gross margin.