Reasonably cheap!
1. Inventory-free sales are ideal for branded products that are produced in small quantities and with a wide variety of products
2. The lowest cost proprietary e-commerce site
3. The suppliers are a small number of directly managed stores and authorized dealers.
4. Tariff-specific pricing
There are actually not many ways to make the price cheaper. This is because the most important strategy for luxury brand products is to maintain the price. Brand-owned stores and authorized dealers sell at list price as a rule. Authorized dealers may offer a small discount with their own sales incentives, but it is not that large.
It may seem mundane, but reducing various expenses is a rational way to keep costs down.
1. Inventory-free sales
Additionally, when dealing with apparel, there are other benefits beyond that.
Apparel is an industry that is inherently prone to small-lot production of a wide variety of products. Because they handle such a huge variety, even directly managed stores can only keep a portion of the products in stock. Stores are becoming places where customers can not only purchase physical products, but also request products that are not in stock in stores or place orders online .
In other words, the directly managed stores themselves are now in effect selling products without stock. I have also strongly felt this after collating data on sales results to date. In-store stock alone is no longer sufficient to fully meet customer orders.
Inventory-free sales is a sales format that can meet the diverse needs of shoppers without the burden of inventory. This can also be seen in my sales performance. * (Characteristics that can be seen from sales performance )
Conclusion
・We use inventory-free sales, which is low cost and eliminates the burden of inventory.
- Inventoryless sales meet the diverse demands of shoppers at a low cost.
2. Low-cost, proprietary e-commerce site
When selling online, the sales costs vary greatly between EC malls and EC sites. Our store uses its own EC site. We will show you how much you can reduce costs.
Our store uses Shopify . There is a brand-name e- commerce mall ( BUYMA ) that also allows for inventory-free sales, so we compared it with our store.
Specifically, we compared how much difference customers would pay if our store sold both products at the same price.
Purchase price...Purchase Price Expense...Cost Profit...Profit
Exhibitor: Exhibitor Commission: Commission
International remittance fee
Transportation insurance Purchaser
Anshin Plus...BUYMA's own insurance
*Transportation insurance premiums are determined by the regulations of each transport company. Therefore, they fluctuate between approximately 1.2% and 1.7%. (As of May 2024)
[Prerequisites]
1. Purchase price, expenses (shipping costs, packaging/wrapping costs, tax accountant fees, etc.), and profits are the same.
2. Customs duties and import consumption tax are the same amount for both, so they are not included here.
Conclusion
Our store is about 6.47% cheaper than BUYMA. Even without insurance fees, it is about 6.5% cheaper.
This is just a theoretical calculation, but it is possible to reduce the cost as shown below.
100,000 yen product...6,470 yen200,000 yen product...12,940 yen
300,000 yen product...19,410 yen
If we look closely at our store and BUYMA , there are many differences in the assumptions, so it is impossible to simply apply these figures, and it is unlikely that it will actually be possible to make it this cheap. However, being able to keep basic costs this low is a major advantage of having your own EC site.
3. The suppliers are a small number of directly managed stores and authorized dealers.
It is important to have as few suppliers as possible.
It's tempting to think that the more suppliers you have, the easier it will be to fulfill customer orders, but this thinking misses a big point.
・Earn rewards
One is the other party's consciousness. A good supplier is a good company. It is already successful in business. It is not necessary to acquire new business partners. Rather, it evaluates new business partners. No one wants to welcome a new partner who is a lot of work and does not lead to profits.
In order to get such a person to open up to you and give you benefits that will benefit your business, you need to place orders with them on an ongoing basis, make regular payments, and gain their trust. It is important to build a long-term relationship of trust, not just for small, immediate profits.
·Risk management
The second is risk management. The more suppliers you have, the more likely you are to get involved in trouble that is the other party's fault. Even if it is the other party's fault, if you cause loss or inconvenience to your customers, you must deal with it yourself and fulfill your responsibility to your customers.
If you have a small number of suppliers, you will have frequent contact with them, so even if something happens, it will be easier to notice the abnormality and you will be able to respond immediately.
Let's think about this in concrete terms. For example, if you change your supplier frequently because the price is a little cheaper, you won't be able to thoroughly check the other party's credit, and the risk of counterfeit goods slipping in will increase. Among "those who want to sell," there are many people who want to sell counterfeit goods.
It is impossible for an ordinary person to look closely at a product and correctly judge its authenticity, and it is not realistic in the first place. If you have secured a purchasing route that does not allow counterfeits to sneak in, maintaining that route is the most rational and low-cost option in the long run.
Conclusion
Concentrating purchases from a few suppliers provides business benefits and reduces risk management costs.
*Our store's main suppliers are two directly managed stores and two authorized dealers, for a total of four.
4. Product prices by tariff
Although customs duties are borne by the buyer, it is cheaper to separate the product price from the customs duties. Many people may think that "it is easier to understand and more reassuring to include customs duties in the price," but in fact it is more expensive. Or, it may be extremely difficult. The reasons are as follows.
1. In principle, it will be higher
This is an example of a Moncler Cluny down jacket. (January 2024)
A Total amount paid by customs duty
Product price 274,500 yen Customs duty 28,100 yen Total 302,600 yen
B Total payment amount including customs duties
Product price 274,500 yen Customs duty 28,100 yen + 1,541 yen Total 304,145 yen
Why does the price difference of 1,541 yen occur? The reason for this difference is 2. If the price includes customs duties, the price will be added to the payment system, which includes Shopify fees of 3.5% + 0.25 euros and international remittance fees of 2%, resulting in a fee of about 5.5%. This cost would be unnecessary if the customer paid it themselves instead of adding it to the payment system.
2. Local tax prepayment claim fee
If the sender pays the customs duties, extra costs will be incurred. It is cheaper if the buyer pays.
DHL Express has the ability to have duties, taxes and charges paid by the shipper or a designated third party outside the country of destination, rather than by the recipient at the destination.
If customs duties, taxes, and other regulatory fees are incurred locally, you will be charged a flat rate or an additional fee based on a certain percentage of the costs incurred. In the case of DHL in Japan, the higher of +3,300 yen or 2% of the customs duties and taxes incurred locally will be applied. DHL and UPS in other countries should also charge the same.
3. Setting prices including customs duties is difficult
The fundamental reason is that it is difficult to predict the amount of customs duties in advance. There is a customs tariff table, and it is possible to calculate it to some extent, but it is subject to revisions and exchange rate fluctuations. There is another problem. The country of origin of the aforementioned Cluny is a single country, but there are different countries of origin for the same product, and there are products with different customs duties.
Under the Japan-EU EPA, when importing clothing whose country of origin is within the EU into Japan, in principle, no import duties are levied, and only import consumption tax is levied. However, when the country of origin of the clothing is outside the EU, even if it is a European brand product or when imported from a country within the EU, import duties are levied. Specifically, the following applies.
This is an example of a Moncler down jacket called Maya. (As of January 2024)
Black: Georgia, Italy, Moldova, Romania, Türkiye
Night Blue: Moldova, Romania
Leaf Green: Romania
Off-white: Romania
Italy and Romania are EU member states, so only import consumption tax is levied. However, the remaining countries are not EU member states, so in addition to import consumption tax, import duties are also levied.
The colors that are difficult to handle are black and night blue. Moncler does not accept orders that specify the country of origin, so there is no way to know in advance which country the product was made in. If the difference was small, the product price would be the same, but the difference is quite large.
We cannot look at the country of origin of the purchased product and tell the customer, "The customs duty is higher than expected, so I would like to ask for an additional fee." The safest thing for the seller to do is to estimate the highest possible price in advance and add that amount to the price. However, this means that the customer who purchased the product will have to bear the additional cost.
If you try to set prices including customs duties, it will likely result in unfavorable pricing for the buyer. I have to say there is no benefit to doing so.
Conclusion
Our pricing is simple and affordable, with customs duties charged separately. You will be responsible for paying the customs duties upon arrival.