Price of Childrens Comics (sorry if in wrong forum)

A

AlanH

Guest
Last week i bought a comic for my daughter in Naas. I'd gone to the store to buy the Sunday paper, but when she saw the attached i got the "please, please, please" until i agreed. Since i'd only brought €5 to get the papers i looked closely at the price and thought €3.10 was expensive but when i saw the sterling price £1.99 i though it was a mistake, as the conversion should be about 2.20 euro or so.

I asked the lady at the counter if it was correctly priced and she said yes, but couldn't explain the differential (in fairness i wouldn't have expected her to).

I emailed the group who own the shop and in fairness to them they replied very promptly and explained the price was set by the wholesaler using the calculation below

1.99 x 1.135( vat) x 1.32( exchange rate set by wholesaler_ x 1.05( Med price file) = 3.12.

But one thing struck me, should the VAT not be applied "after" the exchange rate (leaving aside the very high rate) and not before since the VAT is Irish and not UK as;
"No VAT on UK mags there is in ROI"

I'm confused, but before i start a war with the wholesaler, was hoping a more financial brain could advise me as to whether i'm right to smell a rat.

Appreciate it folks.

[URL=http://s999.photobucket.com/albums/af119/MadAsHell7/?action=view&current=FairyPrincesscomic3.jpg][/URL]

 
it won't make a difference, multiplication is commutative. a*b*c = c*b*a = a*(b*c)=... and so on for any order you multiply them in.
 
Thanks for that, i should have paid more attention in school

;-)
 
At last I get some hard data on UK mag prices in Irl.

Ok, first of all they are using a really bad exchange rate. Today the euro is worth 93p, that means 1 pound is under 1.10 euro, yet they use 1.32. Brutal.

You would hope that they buy stg more frequently so as to pass on the euro strength to their customers.

Plus, note that they add 5% for themselves at the end, even though there is a wholesale and retail profit margin in the 1.99 price already.

Let's see what would happen to the euro price with an up-to-date exchange rate.

1.99 * 1.10 * 1.135 = 2.48 euro before their extra 5%, then it becomes 2.61.

Not too bad.

We need to see the effects of the weak pound faster.
 
AlanH said:
they replied very promptly and explained the price was set by the wholesaler using the calculation below

1.99 x 1.135( vat) x 1.32( exchange rate set by wholesaler_ x 1.05( Med price file) = 3.12.
Click to expand...
Isn't it illegal (anti-competitive) for the wholesaler to set the price?
 
I've now contacted the wholesaler, and am waiting on response.

Fair to say that the retailer who responded was very prompt and sent me a relatively long reply, the only bit of which i posted was the calculation.

One could sense their frustration with the stranglehold they were in, and I suspect the reason they gave me the calculation was so i could take it further!

I'm definitely not one for the "ring Joe" type solution, but perhaps, depending on the reply from the wholesaler, a note to Conor Pope will be sent.
 
Complainer said:
Isn't it illegal (anti-competitive) for the wholesaler to set the price?
Click to expand...

Wholesalers point out that the price is recommended, and is up to the retailer to decide the price.
However, the retailer's margin is based on the rrp less agreed discount, so if they lower the price, it is their own margin they are cutting.
 
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