The Brexit effect for UK builders...

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RiftAmpsRiftAmps Frets: 3113
I woke up this morning having received 3 overnight orders from EU customers, that's 7 from the continent this week alone. For the tax  year '15-'16 I had a total of 4. In fact, my YTD EU sales are now into the 20s.

My margins have shrunk slightly as the cost of parts have increased (not by much, but I'm sure they will) and I haven't yet adjusted prices accordingly but compared to this time last year my net profit is up 18%.

Is anyone else having a huge sales volume increase to the EU, especially since Brexit?
*I no longer offer replacement speaker baffles*
Rift Amplification
Handwired Guitar Amplifiers
Brackley, Northamptonshire
www.riftamps.co.uk

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  • JookyChapJookyChap Frets: 4234
    I spoke to another builder recently (won't say his name as it is up to him) and he was quietly pleased as a lot of his sales go to the U.S and prices are agreed in dollars, which I guess is the opposite of your experience as it is no more sales but more money, but equally nice to hear :)

    All swings and roundabouts innit?

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  • martinwmartinw Frets: 2149
    tFB Trader
    JookyChap said:

    All swings and roundabouts innit?

    This.

    Prices to import have gone up, but at least one of my EU suppliers has increased my discount to compensate. Plus I have received 2 orders from Europe in 1 month, quite a rare event for me.

    Life goes on.

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  • FelineGuitarsFelineGuitars Frets: 11497
    tFB Trader
    Got an URGENT order for a Blackmachine from customer in Germany while the exchange rate was in his favour.

    Many guitars have a re-sale value. Some you'll never want to sell.
    Stockist of: Earvana & Graphtech nuts, Faber Tonepros & Gotoh hardware, Fatcat bridges. Highwood Saddles.

    Pickups from BKP, Oil City & Monty's pickups.

      Expert guitar repairs and upgrades - fretwork our speciality! www.felineguitars.com.  Facebook too!

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  • ReverendReverend Frets: 4974
    Got an URGENT order for a Blackmachine from customer in Germany while the exchange rate was in his favour.
    Someone had just sold a castle and had a bit of spare cash? :)
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  • Modulus_AmpsModulus_Amps Frets: 2570
    tFB Trader
    I have had significant more shipments to the USA since the pound took a hit, Sales to the EU have remained steady at about 10% - 15% of total orders
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  • OilCityPickupsOilCityPickups Frets: 9988
    tFB Trader
    My EU sales have gone bonkers ... probably 25% of my sales in the last month (particularly 'metal' style humbuckers) ... heading mostly to Scandinavia or Germany.
    Professional pickup winder, horse-testpilot and recovering Chocolate Hobnob addict.
    Formerly TheGuitarWeasel ... Oil City Pickups  ... Oil City Blog 7 String.org profile and message  

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  • StormshadowGuitarsStormshadowGuitars Frets: 1215
    tFB Trader
    Several more US and EU orders since the £ took its hit. They've paid in advance too which is always nice, obviously trying to make make sure they don't get caught if the £ recovers by the time their guitars are built.
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  • shaunmshaunm Frets: 1591
    I'm glad to see that every cloud has a sliver lining. This seems to be the case with most manufacturing businesses that I work with at the moment. EU, US and Australian sales have improved quite a lot in recent months. 

    At the risk of sounding like a boring jobs worth don't forget to adjust your business insurance to reflect the turnover changes for different regions, especially if that turnover is US/Canada based. Insurance companies are funny buggers (not haha funny).
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  • Unfortunately the real Brexit effect will kick in in a couple of years, assuming that the UK is no longer part of the single market. Then there will probably be both additional paperwork and tariffs. And if a UK guitar builder wants to take some kit to a music show on the continent he'll need a carnet for each guitar, for every country you plan to pass through. Doing business in Europe pre-EU was a nightmare compared to what we have today. I really hope we don't end up in the same place again.
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  • ChalkyChalky Frets: 6807
    Unfortunately the real Brexit effect will kick in in a couple of years, assuming that the UK is no longer part of the single market. Then there will probably be both additional paperwork and tariffs. And if a UK guitar builder wants to take some kit to a music show on the continent he'll need a carnet for each guitar, for every country you plan to pass through. Doing business in Europe pre-EU was a nightmare compared to what we have today. I really hope we don't end up in the same place again.
    You had to be more organised back then, true. But we didn't know any better and didn't have the internet and instant online communications back then either, so it isn't really comparable.
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  • Chalky said:
    Unfortunately the real Brexit effect will kick in in a couple of years, assuming that the UK is no longer part of the single market. Then there will probably be both additional paperwork and tariffs. And if a UK guitar builder wants to take some kit to a music show on the continent he'll need a carnet for each guitar, for every country you plan to pass through. Doing business in Europe pre-EU was a nightmare compared to what we have today. I really hope we don't end up in the same place again.
    You had to be more organised back then, true. But we didn't know any better and didn't have the internet and instant online communications back then either, so it isn't really comparable.
    You're absolutely right that things will be different because of the internet. But the old processes had been developed over a long period of time. We don't yet know what the post-Brexit world will look like, and we probably won't really know the details until very late in the process. Indeed, if the UK can't reach agreement with the EU over the detail of Brexit the UK will be just cut adrift and will have to start developing new trading relationships and new processes in two or three years time. (Given the farce of the Canada trade deal, who would bet on the Brexit process being smooth?) Even if the internet can make life much easier - how long will it take to agree trade practices and then implement all the internet wizzardry? And what happens in the interim?

    Bottom line - it's almost certainly going to be more difficult for UK based guitar builders to trade in Europe, but just how difficult we don't yet know.
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  • ChalkyChalky Frets: 6807
    But we won't develop new processes with EU customers, they will say "Follow this process that our Norwegian/Swiss/US/Far Eastern suppliers follow".
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  • OilCityPickupsOilCityPickups Frets: 9988
    tFB Trader
    Chalky said:
    But we won't develop new processes with EU customers, they will say "Follow this process that our Norwegian/Swiss/US/Far Eastern suppliers follow".
    Exactly ... the rest of the world trades with the EU, we simply become one of the 'rest of the world'.
    Professional pickup winder, horse-testpilot and recovering Chocolate Hobnob addict.
    Formerly TheGuitarWeasel ... Oil City Pickups  ... Oil City Blog 7 String.org profile and message  

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  • Chalky said:
    But we won't develop new processes with EU customers, they will say "Follow this process that our Norwegian/Swiss/US/Far Eastern suppliers follow".
    Exactly ... the rest of the world trades with the EU, we simply become one of the 'rest of the world'.
    A few weeks ago I bought some pickups from Oil City. I just went on the web, clicked a few buttons, paid by Paypal and a week later they arrived. I really look forward to completing the build and hearing the pickups.

    Post Brexit, if the UK has a similar process to the US I'll go on the web, click a few button, pay by Paypal and a week later the pickups would arrive in customs. Some time later (possibly several weeks or longer) I would receive the pickups, together with a bill for duty and a further charge for the privilege of having been charged duty. (The last order I placed with StewMac had a price of $50 and ended up costing me about $80.) That's why I never buy stuff from the US if I have another choice. It's slow, and it's expensive.

    If the UK simply becomes one of the 'rest of the world' there is a real danger that it will seriously damage the UK economy and - more importantly - it could have an adverse effect on UK based guitar builders.
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  • OilCityPickupsOilCityPickups Frets: 9988
    edited October 2016 tFB Trader
    Chalky said:
    But we won't develop new processes with EU customers, they will say "Follow this process that our Norwegian/Swiss/US/Far Eastern suppliers follow".
    Exactly ... the rest of the world trades with the EU, we simply become one of the 'rest of the world'.
    A few weeks ago I bought some pickups from Oil City. I just went on the web, clicked a few buttons, paid by Paypal and a week later they arrived. I really look forward to completing the build and hearing the pickups.

    Post Brexit, if the UK has a similar process to the US I'll go on the web, click a few button, pay by Paypal and a week later the pickups would arrive in customs. Some time later (possibly several weeks or longer) I would receive the pickups, together with a bill for duty and a further charge for the privilege of having been charged duty. (The last order I placed with StewMac had a price of $50 and ended up costing me about $80.) That's why I never buy stuff from the US if I have another choice. It's slow, and it's expensive.

    If the UK simply becomes one of the 'rest of the world' there is a real danger that it will seriously damage the UK economy and - more importantly - it could have an adverse effect on UK based guitar builders.
    Rightly or wrongly I think that is the route we are heading down. As UK manufacturers we will have to meet the challenge ... if we loose the single market those of us VAT registered will probably be able to 'zero rate' to the EU as many do to the US thus still keeping our prices attractive. It really comes down to 'if you think our products are good then we hope you will continue to buy them'. I admit that customs are a pain ... but till the authorities sort their crap out ... we are stuck with it. 
    As a post script ... I export lots of pickups to Norway ... they don't seem to have too many issues with the complexities.
    Professional pickup winder, horse-testpilot and recovering Chocolate Hobnob addict.
    Formerly TheGuitarWeasel ... Oil City Pickups  ... Oil City Blog 7 String.org profile and message  

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  • ThorpyFXThorpyFX Frets: 6090
    tFB Trader
    Chalky said:
    But we won't develop new processes with EU customers, they will say "Follow this process that our Norwegian/Swiss/US/Far Eastern suppliers follow".
    Exactly ... the rest of the world trades with the EU, we simply become one of the 'rest of the world'.
    A few weeks ago I bought some pickups from Oil City. I just went on the web, clicked a few buttons, paid by Paypal and a week later they arrived. I really look forward to completing the build and hearing the pickups.

    Post Brexit, if the UK has a similar process to the US I'll go on the web, click a few button, pay by Paypal and a week later the pickups would arrive in customs. Some time later (possibly several weeks or longer) I would receive the pickups, together with a bill for duty and a further charge for the privilege of having been charged duty. (The last order I placed with StewMac had a price of $50 and ended up costing me about $80.) That's why I never buy stuff from the US if I have another choice. It's slow, and it's expensive.

    If the UK simply becomes one of the 'rest of the world' there is a real danger that it will seriously damage the UK economy and - more importantly - it could have an adverse effect on UK based guitar builders.
    Rightly or wrongly I think that is the route we are heading down. As UK manufacturers we will have to meet the challenge ... if we loose the single market those of us VAT registered will probably be able to 'zero rate' to the EU as many do to the US thus still keeping our prices attractive. It really comes down to 'if you think our products are good then we hope you will continue to buy them'. I admit that customs are a pain ... but till the authorities sort their crap out ... we are stuck with it. 
    I don't find customs too much of a pain, its a time delay more than anything else. We have a dealership in Israel and that is the most arduous from a  paperwork perspective, but even that's just a process that needs to be followed so nothing to moan about.
    Adrian Thorpe MBE | Owner of ThorpyFx Ltd | Email: thorpy@thorpyfx.com | Twitter: @ThorpyFx | Facebook: ThorpyFx Ltd | Website: www.thorpyfx.com
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  • ThorpyFX said:
     I don't find customs too much of a pain, its a time delay more than anything else. We have a dealership in Israel and that is the most arduous from a  paperwork perspective, but even that's just a process that needs to be followed so nothing to moan about.
    Customs I imagine are going to be incredibly arduous for guitar builders if they use rosewoods, for electric and acoustic makers; the latter most of all.  
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  • Indeed, yet that is unrelated to Brexit; it's a CITES thing.
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  • ChalkyChalky Frets: 6807
    And it will be sorted out by US and FarEast guitar factories selling into the EU before UK guitar builders are in the post-Brexit world.
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  • <snip>
    Rightly or wrongly I think that is the route we are heading down. As UK manufacturers we will have to meet the challenge ... if we loose the single market those of us VAT registered will probably be able to 'zero rate' to the EU as many do to the US thus still keeping our prices attractive. It really comes down to 'if you think our products are good then we hope you will continue to buy them'. I admit that customs are a pain ... but till the authorities sort their crap out ... we are stuck with it. 
    As a post script ... I export lots of pickups to Norway ... they don't seem to have too many issues with the complexities.
    FWIW, Norway is in the European Economic Area. I think that means "Industrial" goods (like pickups) should be free of customs duties and tariffs, like exporting to anywhere in the EU from the UK. 

    Am I right, do you know? Or do customers pay duty on their purchases? 
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