Cheapish Motor Wheels

[cyclebuddy]

In a previous post, I explained that ebikes made in China has to pay anti-dumping duty. I can buy Chinese parts and assemble them into an e-bike without paying anti dumping duty which is still around 22%-25% on the cost insurance and freight.
However, assembled in the UK is not the same as made in the UK.
If I bring my bikes over to the EU after brexit, my customers have to pay anti-dumping. That will make the price .of my bikes 25% dearer than the same in the UK.
Conversely, if the same bike were assembled by Woosh Bikes SARL in France, UK customers would be charged anti-dumping.
After the EU started to impose anti-dumping duty, many Chinese ebike companies setup operations in Turkey, Tchekia, Spain etc to assemble their bikes like I do here. There is nothing wrong with that.
However, they can't compete with me on price in the UK unless they misdeclare that their bike is made in the EU.

Yes: You've explained how you operate many times before. I get your business model and how it works.

What you haven't explained is how you arrive at (and assert with conviction) the following beliefs:

...competing against Chinese internet shops which cheat on VAT is impossible.

They steal so much money from all of us through not paying any or not paying the full amount of taxes through misdeclarations...

I have to say all the Chinese product I'm importing (not e-bike related) is (now) being fairly declared according to my documentation.

I don't think it's a valid question at all, you are effectively saying that if one finds they have a competitor doing the same thing or better, they should pack up shop!

I'm saying you need to compete in a global economy, not whine about the Chinese having some "imagined" unfair advantage - How? Where's the proof that validates Woosh's assumptions? Importing directly from China, I haven't seen any evidence of cheating or evasion. HMRC aren't anything like as ignorant/blind as they once used to be.

Woosh's retort to my question would be simple: They provide a level of service that the Chinese don't and that commands a price premium... but the point I make is that that differential is diminishing year on year. There's no point complaining of how others play this game; you either raise your own game or get out of it, not sit in the corner crying about how unfair it may seem to you.

BYD became the largest EV maker in the world this year, taking that crown from Tesla. BYD (and several other very long established Chinese EV makers) this year launch throughout the UK and Europe. Are VW/GM/Ford/Mercedes/BMW et al winging about it or trying to raise their game and stay relevant?

Elon Musk is - for the moment at least - laughing it all off, but time will tell.

 

[Az.]

I haven't seen any evidence of cheating or evasion. HMRC aren't anything like as ignorant/blind as they once used to be.

Cardiff flat owner gets tax bills for 11,000 Chinese firms

Dylan Davies's hundreds of VAT bills for companies he had never heard of totalled £500,000.

www.bbc.co.uk

 

[cyclebuddy]

Cardiff flat owner gets tax bills for 11,000 Chinese firms

Dylan Davies's hundreds of VAT bills for companies he had never heard of totalled £500,000.

www.bbc.co.uk

In context that's petty nonsense, not the largest Chinese e-bike makers importing hundreds of e-bikes by the container-load without paying tax. There're examples of fraud everywhere; we've all had the odd package being marked "sample" and not value declared.

 

[Scorpio]

No, that is not correct. If they charge the correct fees and taxes, they cannot compete against bona fide local businesses. I recently imported a new frame. Here is the breakdown of fees:
Documentation (Docs) £100
Chinese Import Service Fee (CISF) £110
LCL Handling £45
£55 for a customs clearance
Bonded warehouse rent: £40 per day

That's the normal tariffs for forwarding services. You can ring up any forwarding agents to check if you like. My agent was David Turner ltd in Dartford.
There is no way you can make a profit importing less than a full container and Chinese internet shops are not going to do that.

A friend has been running a shipping company for many years. He pointed me at trade articles after Brexit that showed shipments UK/EU and EU/UK dropped a lot (80% decrease?).
From personal experience chatting to him and several "One man band" manufacturers it's just not economic for many small traders pay the extra costs so they have stopped shipping to/from EU.
Adding a £100 documentation fee to a shipment of 1 pallet is almost impossible to absorb. Adding the same £100 fee to the contents of a 40 foot container is a lot less significant.

A random older article, more small scale suppliers have stopped shipping since the article was written https://www.esri.ie/news/brexit-reduced-overall-eu-uk-goods-trade-flows-by-almost-one-fifth

 

[flecc]

I'm saying you need to compete in a global economy, not whine about the Chinese having some "imagined" unfair advantage - How? Where's the proof that validates Woosh's assumptions? Importing directly from China, I haven't seen any evidence of cheating or evasion. HMRC aren't anything like as ignorant/blind as they once used to be.

The attack you and Guerney have launched on Woosh was unjustified. He has simply been running a successful business that suits many customers in the small UK market and has not been whining over the years about Chinese suppliers while doing that. The whining you complain of was simply part of his repying to your attacks, provoked by you and Guerney after all he had done was offer motor wheels at a sufficiently competitive price in the early part of the new thread.

BYD became the largest EV maker in the world this year, taking that crown from Tesla. BYD (and several other very long established Chinese EV makers) this year launch throughout the UK and Europe. Are VW/GM/Ford/Mercedes/BMW et al winging about it or trying to raise their game and stay relevant?

Elon Musk is - for the moment at least - laughing it all off, but time will tell.

Agreed about BYD at al ( Link ) since I've long been closely following this subject, and Musk has already had to drop prices. However, the EU and the USA are big enough and united enough on this subject to keep a fly in their ointment with protectionism through tarif barriers masked as anti-dumping measures.
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[Az.]

In context that's petty nonsense

Nonsense? You say they are not ignorant and blind. They sent 11k letters to a man in Wales.

 

[Woosh]

In context that's petty nonsense, not the largest Chinese e-bike makers importing hundreds of e-bikes by the container-load without paying tax. There're examples of fraud everywhere; we've all had the odd package being marked "sample" and not value declared.

The rules are simple: if Chinese bikes are sold in the UK, they have to be assembled here or pay anti dumping. If Chinese bikes are sold as made in Poland or another EU country, then it's fraud.
They get away with it because they can't be caught.

 

[cyclebuddy]

The attack you and Guerney have launched on Woosh was unjustified

I'm not attacking anyone... I'm simply asking a member to explain the logic underlying their conclusions, because my own experience running several companies (both my own and divisions of large corporates) over 48 years doesn't concur.

Over the years, I've closed three companies and just recently consolidated (reduced the size of) another because external factors outside my control (world circumstances, changes in legislation etc) have negatively impacted the profitability/viability. That company is now operating viably because those changes were made.

It's business, not a personal attack. You step-up to the plate, do what needs to be done to survive or you get out before you go bankrupt. Adapt or die. Kudos has just faced reality too and (I would suspect) decided it's no longer viable to compete, or the margins are now too slim to justify the effort/capital employed. It's a shame, but it's life.

If you have evidence/can prove any company (Chinese or otherwise) is committing fraud and/or evading duty and putting you at a disadvantage because you're playing it straight, you report them (anonymously if you like).

They get away with it because they can't be caught.

BS. They can... Customs seize the goods at the docks. That's worse/more costly than paying the taxes due. Plenty of examples... even Branson in his early Virgin (Record store) days had stock seized for not declaring properly. I once too had goods seized/destroyed for non-payment of appropriate duties (misunderstanding rather than evasion). That was a very costly mistake not since repeated, and a very long time ago now.

 

[guerney]

The attack you and Guerney have launched on Woosh was unjustified. He has simply been running a successful business that suits many customers in the small UK market and has not been whining over the years about Chinese suppliers while doing that. The whining you complain of was simply part of his repying to your attacks, provoked by you and Guerney after all he had done was offer motor wheels at a sufficiently competitive price in the early part of the new thread.

If you continue to misundstand my posts again, you'll end up on my ignored list again.

 

[Woosh]

I'm not attacking anyone... I'm simply asking a member to explain the logic underlying their conclusions, because my own experience running several companies (both my own and divisions of large corporates) over 48 years
...

BS. They can... Customs seize the goods at the docks. That's worse/more costly than paying the taxes due. Plenty of examples... even Branson in his early Virgin (Record store) days had stock seized for not declaring properly. I once too had goods seized/destroyed for non-payment of appropriate duties (misunderstanding rather than evasion). That was a very costly mistake not since repeated, and a very long time ago now.

Tariffs on electric vehicles avoided as UK and EU extend trade rules

The UK and EU have agreed to extend trade rules on electric vehicles until the end of 2026 to keep costs down for manufacturers and consumers, the Prime Minister has announced today (Thursday 21 December).

www.gov.uk

.
Do you understand rules of origin?
If you are not familiar with this stuff, I will explain.

 

[Woosh]

The rules of origin apply equally to me and to EU sellers. If I export one of my bikes, I have to declare to the authorities where the bike is made. If 50% or more of the contents of the bike is made in the UK or the EU, I can enter made in the UK. Otherwise, I have to declare made in China and my customers pay 25% anti dumping duty on top of other charges.
It's easy to misdeclare and avoid paying anti dumping.
EU sellers cannot compete with me on price unless they cheat.

 

[flecc]

I'm not attacking anyone... I'm simply asking a member to explain the logic underlying their conclusions, because my own experience running several companies (both my own and divisions of large corporates) over 48 years doesn't concur.

Woosh didn't post any conclusions until the questioning and challenges started. All he had done was point out that he also had motor wheels at a reasonable price, from which the challenges built up without any justification.

It's business, not a personal attack. You step-up to the plate, do what needs to be done to survive or you get out before you go bankrupt. Adapt or die.

I disagree, it's a myth that a business has to grow or die and not everyone wants to be the next Amazon. There was once a Mr H W Smith who ran a newsagents shop through to retirement and happy to be doing that until he retired and handed it to his son who shared his first names but in reverse. His son W H was a very different man who had some bright ideas that quite rapidly lead to a large chain of the shops and stalls. Still not content he expanded into being a wholesaler of all his lines, supplying all his rivals too, creating a form of monopoly on some aspects of the business. H W and W H were neither right nor wrong, they were simply doing what they were happy to do, each with their own brand of success.

I used to think like you and still remember how frustrated I was at my first boss's H W attitude and apparent complacency. How he put up with my badgering I will never know. But I moved on and later in life was very successful, enough to retire when I reached my fifties, not wanting to get trapped on the treadmill. Now well over thirty years after retiring I'm older and wiser enough to know that we should all be free to do our own thing without it being the subject of criticism or misguided and unwanted correction.

Kudos has just faced reality too and (I would suspect) decided it's no longer viable to compete, or the margins are now too slim to justify the effort/capital employed. It's a shame, but it's life.

Kudos Cycles has been effectively out of business for many years due to a number of reasons, just one mentioned in this link
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[flecc]

If you continue to misundstand my posts again, you'll end up on my ignored list again.

No misunderstanding, you were telling Woosh how to run his business in a very critical way. Perhaps you were trying to be helpful, but it was obvious early on that Woosh didn't see it that way so it was becoming a matter of good manners.

Minding one's own business has more than one meaning.

Your ignore list is your own business and none of mine.
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[Woosh]

I think the problem is that practically nobody noticed anything wrong with buying stuff from EU websites. How the goods is delivered is not their concern. If the websites owners cheat, they are simply not aware of that.
The problem is this year is particularly tough for all UK electric bikes companies. I paid my stock well in advance and also own the freehold so I can belt up but I thought should attract attention to the glaring situation that C&E do not have the resources to stop the cheats.
My plea is to senior members who freely give their time helping others, thus help this forum to continue. Would you buy the goods from outside Uk if you have to pay all the fees correctly. If you don't, then don't advise others to do so.

 

[Az.]

I think the problem is that practically nobody noticed anything wrong with buying stuff from EU websites. How the goods is delivered is not their concern. If the websites owners cheat, they are simply not aware of that.

Quite often I see fake velue declaration on Chinese Web sites, so I almost always buy from within UK.

 

[cyclebuddy]

It's easy to misdeclare and avoid paying anti dumping.

Yes, I really do understand Origin and all that - I've imported from Far East by the pallet (not containers). I can see that happening on small shipments where the loss if seized can be absorbed/written off. In 95% of cases I am seeing VAT and duty both added/collected at source. But are you saying you're seeing the Chinese mis-declaring origin on whole containers of goods/e-bikes to evade tax? That IMHO would be far too costly/risky to sustain.

I disagree, it's myth that a business has to grow or die and not everyone wants to be the next Amazon.

I'm not saying you need to grow or die... I'm saying you need to continually adapt to stay relevant and NOT die. I gave an example where I've just contracted one of my own businesses to keep it viable/sustainable. I first retired at age 42.

What is a myth is that you need to be a greedy Capitalist/profiteer to run a viable, successful, sustainable business... Look at the success of Lectric e-bikes, who have almost by accident grown phenomenally over just a few short years, where their base-line e-bike still only costs $1000 as it did when they started (continually being updated/improved with better parts yet remains at the same cost), yet they give e-bikes away to those who can't afford them and donate/give millions of dollars cash back to the community/charities too. It's now a volume/small margin model, yet sustainable and a VIABLE caring business that serves its customers, 100 employees and the community, and has a real passion for service & support (99.2% are remote on-line sales so it's 'phone/email support just like the Chinese now do too). I think it's an amazing business model that doesn't exploit. I too try to do my bit helping those who need, but I'd love to be/have been as philanthropic as Levi (co-founder/owner of Lectric e-bikes) and Bob Wells the interviewer - the Grandfather of living in a van by choice - who makes (again, by accident not design) multiple $100,000's from his YT channel "Cheap RV Living" and gives nearly all of it away via his Charity HOWA.

 

[Woosh]

Bikes from EU cone to the UK by roads, usually handled by European couriers such as DPD, FEDEX, TNT etc. You fill in the paperwork online. It takes very little time and nobody checks if you misdeclare that your goods are made from Poland and not China.
If you want to further reduce the 2% risk of being caught, print the carton in Poland with made In Poland.
On the face of it, some could say but there's no victim, what's the harm in that?

 

[flecc]

I'm not saying you need to grow or die... I'm saying you need to continually adapt to stay relevant and NOT die.

I accept that and have long appreciated your posts and the valuable help you give in here, making me all the more surprised by this interchange with Woosh.

Woosh's business model is very relevant as witness the healthy way in which it has survived and the high regard so many have for them, while so many like Kudos and countless others have failed.

This pedelec business in Britain is small and the supplier failure rate over the last 25 years has been extraordinarily high, so the tiny minority like Woosh who survive are obviously doing something very right. Wisper is another of our successes, but they and Woosh are so different that about the only thing they have in common is the W. Neither is right or wrong, they are just different, giving rise to more of the variety that is so important in all our lives.

Long may that continue.
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[cyclebuddy]

Bikes from EU cone to the UK by roads, usually handled by European couriers such as DPD, FEDEX, TNT etc. You fill in the paperwork online. It takes very little time and nobody checks if you misdeclare that your goods are made from Poland and not China.
If you want to further reduce the 2% risk of being caught, print the carton in Poland with made In Poland.
On the face of it, some could say but there's no victim, what's the harm in that?

I agree, it's not a victimless crime... the shortfall has to be collected from the populous in general.

When I first ordered my Fiido D11, it was sent via road (DPD) from Poland - this was shortly before Brexit. It got seized/stopped at the docks in France before it even got on the boat; I never saw it, it was refunded. Fiido then stopped selling into the UK for IIRC nearly a year whilst they set-up their UK distribution, and I then reordered - the bike rose in cost from £700 to £800, Fiido actually stated on their web-site to cover "additional UK costs". The box was marked a consignment of several 10's (IIRC maybe 70 or so?) and as UK stock. Nothing underhand or suspicious in any markings/labelling that I could see (and I do always check source/labelling because I'm interested in origin).

I know/have heard of others who have more recently tried to order e-bikes from Banggood et al, shipped from Poland (because on the surface it appears cheaper), and been seized at the boarder until the correct duty has been paid, although as far as I'm aware those orders are more recently routed/processed through the respective UK warehouses.

As far as I can see, most of the Chinese operate that way now - certainly the larger players. Fiido did also move HO from mainland China to Hong Kong at that time: I'm not sure if that has anything to do with it given the majority of their bikes are exported to EU/UK/USA.

There's nothing hooky/evasive with the stuff that I'm currently importing from China/Taiwan/Mainland Europe, it's all duty paid - although the import duties are not as crippling on those goods as assembled e-bikes.

 

[Woosh]

Thank you for your understanding.
Although the cartons don't need to have made in xxxx to comply when sold within the EU, if the bike is exported to the UK, the cartons must be conform to UKCA and marking rules on cartons, and carry a clear indication of country of origin.
Cartons without country of origin label are not acceptable for import/export.

Placing manufactured products on the market in Great Britain

What you need to do to comply with regulations on manufactured products you place on the market in Great Britain.

www.gov.uk

Basically, you would have to setup in UK to sell something that is subject to anti dumping rules. After all, anti dumping is supposed to protect local businesses against unfair competition from Chinese Internet sellers.