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It would be so easy for Massdrop to organise shipment of the Senns and other European made products directly to European buyers, thereby saving them an awful lot of money in shipping and import duties - they simply can't be bothered. I'll bet there are an awful lot of Europeans/Scandinavians who don't do business with Massdrop because of this insular American attitude. Simple numbers make this attitude so irrational - Europe/Scandinavia/Russia - 750 million + USA/Canada - 380 million.
What would they need to do that? Just organize it or do they need a physical presence in an EU country? Only asking since I'm wondering when/how VAT applies? Just stuff coming in outside of EU.
Why do they need to do that - so Europeans/Scandinavians who are EU citizens don't have to pay 20% on the total cost of European products + shipping costs that have been sent outside of the EU so count as non EU products when they return.
All products sent from outside the EU have to pay these costs and in some EU countries the charges are even higher than I quoted - I live in France.
You're answering *why*. I ask *what* as in what processes or things do they need to do to fulfill that objective.
In many cases, it has to do with the business structure (where sales is registered, where sales tax is paid, etc) and it would not be beneficial for Massdrop to setup a business entity in the EU, unless there is a strong enough demand to cover the overheads, tax, etc involved. In many cases, existing distributors bear the grunt, as they are already set up in that region. Alas, even though some drops are specifically Massdrop exclusive (those ending in X, such as the 6xx, 4xx, 7xx, Elex, etc), the manufacturer still brands it as theirs, and with existing agreements in place, it is just not feasible to cater to every country in existence.
That being said, sometimes it is cheaper to purchase through a shipping forwarder, and that way, taxes are sometimes exempt since it is a mail parcel... which is what I did and paid 0 for import tax/VAT. :)
All products sent from a non EU destination will have the statutory 20% tax levied on entry. In some EU countries a hefty Douane charge is levied as well. You don't write like a European, where are you from and where do you live?
I was lucky when I bought a D/V via Massdrop - they sent it 'in transit' to Germany so no import charges were levied. It was then sent on to France where the Douane did'nt levy any charges since it came from another EU country.
As to Massdrop they obviously don't care that Europeans are facing unnecessary charges when buying products made in the EU, it really is as simple as that and the European market even without Scandinavia and Russia is far bigger than the USA. It can't be long before a bunch of Europeans set up a similar structure and it will be Massdrop's fault when they lose this market.
I'm Korean by birth and currently reside in Seoul. I purchase often from Massdrop, and I've been lucky to get exempt on multiple occasions. But if I do get a bill, I pay right away.
And as for US vs EU, you're right that EU is much larger and perhaps even higher buying power than the states... but as far as I know, the US is king when it comes to personal audio market, and China hot on its tail (perhaps China has already surpassed US, just by sheer smartphone and earphone sales alone)
Plus, (I have no basis or evidence on my claim, but is from a personal view feel based on my time living a few years in the states, news, consumer spending reports and working for an American company with various European managers the last 9 years) Americans have far higher "need to purchase, regardless of whether I need it or can afford it" than many other nationalities.
I thought from your post you did'nt understand EU tax law. Yes you understand the decades old consumer brainwashing of Americans very well - buy,buy.buy. Unfortunately it is growing in Europe as well.
I am of very cautious lowland Scots mentality - we part with money very reluctantly and I think we are like the Germans/Dutch we demand 'value for money'.
China is a huge market and joining China will be India and don't forget the former Russian satellite countries with growing a growing middle class - these are the markets to enter.
Coming back to your original post about why massdrop can't ship direct to customers from the mftr:
It's gotta do with invoicing and logistics.
Massdrop's business model (I believe) is for them to buy in bulk from a manufacturer and market them their way, and pocketing the difference as profit. Their sales are registered in the US and pay US corporate tax for their profits (minus overheads, etc)
If Massdrop made Massdrop GmbH in Germany, Massdrop's finance would then need to factor in European corporate taxes and law. This would be a whole new can of worms that perhaps Massdrop is just not large enough to undertake as yet.. or just not enough customers across the pond yet to justify opening a new business entity.
Now, for logistics: Sennheiser would be happy to ship their 6xx and 58x in crates (hopefully Full Container Load) to a single address, i.e. Massdrop in the US. Sennheiser would have shut the discussion down in 2 secs if massdrop wanted Sennheiser to ship each individual order to a different address. This is why there are importers/distributors/retailers that purchase at a lower price, so that warehousing & logistics is done by 3rd party and not by Sennheiser's production facility.
that's why some Europeans should think about putting together an operation. A lot of products that Massdrop sell would'nt begin to fill a container. They sell a lot of high quality French kitchen equipment but not in great quantity - I check out the prices here in France and it's not worth EU people buying, so they are gearing their business to the USA - again I say why don't a bunch of Europeans set up an operation to cater for the huge market that exists in Europe and near Asia. If I was younger i would have kick started this already.
I can't really comment the corporate tax issue, but it would be awfully simple to hire a logistics company in Ireland and have Sennheiser deliver to two addresses - one in Ireland the other in New Jersey.
The savings wouldn't be huge though. The shipping cost is $15, cheap. Maybe one could shave off a buck or two ex-Ireland. The customs rate is very low from the US to the EU, something like 1,5% (this would be avoided by shipping from Ireland)
What makes the bulk of the extra costs is the local VAT, which is charged at the same time the package clears customs. It's your national rate, anything between 17-27%, depending on the country of residence. If the goods were shipped from the EU, there could be a setup where the Irish VAT-rate would be charged and another setup where they'd charge according to destination, but one way or another you'd pay VAT.
Sorry your completely wrong the import tax from outside the EU is 20% of the total cost ie. product + shipping. Some Customs /Douane in the EU charge an awful lot just to look at the package. There is no 17% TVA rate anywhere in the EU - lowest is 19%, most countries charge 20%, don't know anywhere that charges 27%. You can check this out in any EU language on a countries EU Customs site.
I think that if the total cost of an item is below €35, there is no import charge. The heavier the item the more the shipping cost, ergo the 20% import charge. Imagine buying floor standing speakers!
Well, I think you should look up the actual figures.
The Finnish customs office levied 1,5% import duty, so I'll stick to that figure as correct. Are you sure you declared the headphones under the correct HS-number?
As for VAT: the 27% I mentioned is Hungary and Luxembourg has 17%. Of the 28 members only 6 levies 20%
I took care of the (electronic) import clearance myself, no extra fees. Had I asked the post office to do that on my behalf, it'd been daylight robbery at 50€.
What is the average VAT in EU? I assume most of these numbers are publicly searchable? Curious if Great Britain or UK has one and also the VAT number for Germany.