Uncover Luxury Price Increase Process: Agents Increase 4 To Retailers.

"Everyone says

Li Fei introduced that, according to the state regulations, watches with a price of not more than 10 thousand yuan are not high-end watches, and they do not have to pay consumption tax, but import duties are about 20%, plus 17% of value-added tax and other expenses in the import sector, accounting for 40% of taxes and fees.

"On the basis of cost price, the agent will usually increase the price to 40% to the retailer.

Retailers have to guarantee gross margins of more than 60%.

According to Li Fei's algorithm, the price of a watch with an offshore price of 1000 yuan is 1400 yuan, which is 2000 yuan to the retailer's hand and the final price is 3200 yuan.

Since the gross margin needs to pay 17% of the value-added tax in the domestic sales link, the tax paid on this watch is 706 yuan, equivalent to 22% of the final price.

In some shopping malls, apart from the rentals, retailers will also be divided into shopping malls. About 20% to 30% of gross profit will be returned to the shopping malls, which will also be pferred to consumers.

Li Fei said: "the brand of my agent can only be considered as a mid-range brand in foreign countries, such as Rolex, OMEGA and Patek Philippe. Besides paying high consumption tax, they also have to pay a lot of publicity expenses, store rentals and staff salaries, so the final price is at least six or seven times higher than the offshore price."

Due to the high tax and fees and channels, many overseas low-grade products enter the mainland market and become a "luxury" with high price.

In Europe, North America, Hongkong and other places, the price of the same product is 30% to 70% cheaper than that in the mainland.

As a result, in every shopping paradise in the world, Chinese tourists who rush to buy luxury goods like buying Chinese cabbage can be seen everywhere.

Before Christmas last year, Beijing people Jin Kai (a pseudonym) went to Paris on business, and spent only 60 thousand yuan on shopping: 2 hand withdrawals, 20 thousand yuan for LV bags, 5000 yuan for 1 Baoli bags, 1 yuan Gucci watches for 7000 yuan, 1 yuan for SWAROVSKI watches 5000 yuan, 1 yuan for Cartire watches and 21000 yuan for Swatch watches.

"Luxury goods abroad are cheaper than domestic ones, and the euro rate is not high now. Foreigners who hold short-term visas have 12% of their tax rebates in France.

If you buy it at home, you can only buy a Cartire watch for 60 thousand yuan.

Jin Kai said.

Statistics show that 59% of tourists to Europe will buy luxury goods, and the number of tourists who travel to North America will account for 53% of luxuries.

In 2010, the average outbound tourists spent nearly $1000 on luxuries.

The McKinsey report predicts that by 2015, China will become the world's largest consumer of luxury goods, accounting for more than 20% of the global luxury market share.

At present, many overseas brands such as raw materials, production and processing are in the territory of our country. But according to the current processing trade policy, these products must be exported, otherwise they can not enjoy preferential policies for export rebates.

This means that these products need to be exported first and then returned after an overseas trip, which will inevitably increase the cost and cost.

Li Fei said that in the brand of agents, apart from some special functions and styles of watches that can not be produced in China, most of the middle and low-end watches are assembled by imported parts of Guangzhou's national general agent.

However, due to too many intermediate circulation links, watches assembled in China may not reflect the price advantage.

"These parts are produced and exported by domestic factories.

The total number of generations in the whole country is large and the total number of agents is below the provincial level. There are also agents at the municipal level.

The cost of assembling a watch in general is 75% off of the final price, and the four or five tier agent takes 92% off to 90 percent off of the profits, and the final price is four or five times the cost.

In the face of China's rapidly growing luxury consumer market, some international luxury goods companies are beginning to adjust China's market strategy.

Ermenegildo Zegna, Ralph Lauren and other international brands that originally relied on agents to open channels have successively regaining the agency power in the Chinese market, instead of taking the direct camp mode.

In addition, many brands began to "touch the net" and try online shopping mode.

Obviously, this will reduce the terminal retail price of some luxury goods.

But the industry believes that due to the corresponding laws and regulations, logistics and distribution, payment platform is not yet perfect, domestic consumers want to buy "inside and outside the same price" luxury is still an extravagant hope.