Profit markup and costs when shipping from Europe to US?
Alrighty, this is just something I've been thinking about as of late.
These days it's of course very beneficial to buy stuff from the States to Europe, simply because of the exchange rate. So I feel great ordering a shirt to where I live because I get a nice shirt for 'less bucks'.
But! What about the other way around? If I want to sell my shirts online and ship them all the way to the States, there's just no way I can charge my normal price for the shirt. Say, if the shirt costs an X amount of money here in Europe, it means that a buyer from the States is gonna have to pay big bucks for my shirt. Too much, in fact.
It doesn't really make much sense dropping my profit margin just to be able to attract US buyers and to be able to just get my stuff out there. But would I really have any choice?
So should I just simply apply different pricing for US orders just to keep the price level reasonable and attractive? Which is more important - keeping my profit margin where it should be or trying to get my shirts out there over the Atlantic?
Re: Profit markup and costs when shipping from Europe to US?
How would you implement this exactly? I mean, I know how but I think the problem for you would be arbitrage - what would stop people in Europe from ordering their t-shirts from the US side of your website?
Lots of companies do what you're suggesting - drop prices in one country why keeping them super high in another country. It's part of business. If you can do it successfully, I say give it a try and see how things go
Re: Profit markup and costs when shipping from Europe to US?
Unfortunatly thats how it goes. It all has to do with the rate of exchange. If your designs are good enough I,m sure some people would pay the higher prices.
Lets face it Scandinavian designs are quite sought after and there will always be some buyers for it.
Re: Profit markup and costs when shipping from Europe to US?
Hmm... Perhaps I could install some kind of a component/rule into a webstore that allows the lower prices for orders coming only from outside the EU. You know, if the country of destination is some other than within the EU, the currency would automatically switch from Euro to USD with the appropriate price. I'm sure something like that could work.
Well, that's the first thing that comes to mind. I'm sure a lot of people would consider that unfair etc but so what?
Re: Profit markup and costs when shipping from Europe to US?
Right this week, I also thought about this problem. What I thought about this was to offer northamericans free shipping. Yes, it'd only save them some few bucks. But still, it makes it cheaper for them and very easy to handle for me.
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"I wear longsleeve-shirts under shortsleeve-shirts under longsleeve-shirts." S.G. (philosopher)
Re: Profit markup and costs when shipping from Europe to US?
Why are you so particularly interested in the US market? Why cut down your prices so much? Have you already saturated the EU market of over 400 million persons?
Re: Profit markup and costs when shipping from Europe to US?
it's a lot easier to reach the US people via the internet. that's at least my impression.
and on the other hand, why shouldn't you sell to the US market from Europe? even if you gotta cut down your prices - if it you increase sales it's probably a good thing.
(and btw, the european marketpotential for a niche label is not 400 mio.)
__________________
"I wear longsleeve-shirts under shortsleeve-shirts under longsleeve-shirts." S.G. (philosopher)
Re: Profit markup and costs when shipping from Europe to US?
I can think of a couple of ways to implement this-
(1) Give a coupon code for US customers that gives them a certain percentage (or specifc dollar amount) off the order. This is probably the easiest method.
(2) When a customer first comest to your website, have them choose US or Switzerland or whatever other country. Then you can have different prices in different parts. Problem would be if the people from Switzerland see the prices for the US and start to ask questions. So be prepared with an answer.
(3) Make a new website and put a note that you only sell to the US market from that website. This is probably pretty easy too because you can just duplicate what you already have and then just change the prices.
I'm sure there are other methods but these are the first that come to mind.
Re: Profit markup and costs when shipping from Europe to US?
Good question, I'm facing the same dilemma and not to sure how to deal with it yet...I'm thinking of just displaying the prices that I want to sell my products for in specific currencies openly..but, still don't know how to price my stuff or what would be a decent amount to charge..I have an idea for euro alright but seeing some many tees for sale for under $10 in the states it makes me wonder about my US price..
Re: Profit markup and costs when shipping from Europe to US?
Quote:
Originally Posted by marcmarcmarc
it's a lot easier to reach the US people via the internet. that's at least my impression.
and on the other hand, why shouldn't you sell to the US market from Europe? even if you gotta cut down your prices - if it you increase sales it's probably a good thing.
(and btw, the european marketpotential for a niche label is not 400 mio.)
Yes its true that the US is more internet user than the EU, however the EU is catching up quite fast.
As to cutting down on your prices,you,ve got to think that 1 euro = 1.46USD. In short to sell a 20 USD shirt you,re doing it for 13.69 euros adding the cost of postage and customs duty, and a delay of about 20 days.
Re: Profit markup and costs when shipping from Europe to US?
yeah you're right. cutting down so much would kill most of the margin. but maybe there is a way you can cut down a bit, have an appropriate price for americans and still make some profit.
__________________
"I wear longsleeve-shirts under shortsleeve-shirts under longsleeve-shirts." S.G. (philosopher)
Last edited by marcmarcmarc; September 25th, 2009 at 11:23 AM.
Re: Profit markup and costs when shipping from Europe to US?
Ooh, some great thinking above... Two seperate stores sounds easy enough. One for the EU and one for the US.
It is true that cutting down the price too much isn't a good idea, but instead, determining a reasonable one that would be somewhat of a compromise for both parties.
Also true that there are absolutely tons of equally and even much better looking shirts already for sale in the US for $20, which in a way could force me to cut most of my margin, but then again, if my shirt costs $20, people automatically think 'this is only a $20 shirt'. Do I want people to think I'm offering only $20 shirts? Not at all.
And I think European design/brand might bring somewhat of an 'exotic' extra value to the product. Though I'm not saying my designs are anything too special to begin with. But I'm sure the US buyers understand the fact that a European shirt just simply costs a bit more than $20 and they're OK with that. If they're not OK with it - then those people simply will not buy it. And that's OK, as long as there are some individuals who actually do.
If a similar style shirt is indeed for sale in the US for $10 - so be it. That does not mean you should do the same. I think that's just bad business for you.
And by the way, I haven't saturated my local market at all, just thinking ahead here and 'outside the box'. This is just a part of my planning.
Other opinions are welcome, please share your thoughts if you might have some.
Re: Profit markup and costs when shipping from Europe to US?
Hey there very helpful info! Thank you... I have the same concern. I am from California and so my plans or visions for my brand are very american. I currently live in Germany though. The reason i mention being from California is because i dont feel too strongly about my concept being understood in Europe. Its like trying to sell tupac and biggie to Europeans (example). Somehow i dont feel the Europeans would catch on to this style im trying to sell. Would it help to have production of the t's on both sides? Let's say i have a blank t shirt supplier and a printing company in California and the same here in Germany? I'm sure the product wont be identical, i wonder how much that will affect my brand. Some thoughts please
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Profit markup and costs when shipping from Europe to US? 
