Villa Market Price Mark-Up

[BillR]

After some research by contacting the distributors on a few items they sell there I think Ive decided to open a mini villa market. Some of the things (certain condiments, Processed meats, and snacks) are marked up over 3x the wholesale cost. Maybe i'm naive but i always thought a supermarket was at most 15% mark-up. The wholesalers did not require a huge order either, in 2-5000baht range.

So I guess i'm saying those telephone numbers on the Thai labels can pay off if you want to save a bundle on items you frequently use.

Nothing against villa, they can charge whatever the market will bare.

[Pib]

I also expect a lot of the VERY high price is due to import taxes on many foreign made goods...the Thai govt places some very high import taxes on many imported goods...it's a good way to get you to buy Thai made items (even when there are no equivalent Thai made items). It's the Thai version of free trade.

[ljerams]

I also expect a lot of the VERY high price is due to import taxes on many foreign made goods...the Thai govt places some very high import taxes on many imported goods...it's a good way to get you to buy Thai made items (even when there are no equivalent Thai made items). It's the Thai version of free trade.

This is why you need to be selective as to where you shop. My major food purchases are according to quality and price. Meat here, fish there, veg from a local Market and so on. I only purchase when i am passing the place. For Pork loin at the moment, I have seen prices varying from Baht 145 a Kilo up to Baht 239. That is more than 50% difference between two Supermarkets neither of which is located in an expensive area.

[zaphodbeeblebrox]

The markup at Tops for imported items is even more than Villa.

[Jingthing]

The markup at Tops for imported items is even more than Villa.

It varies item to item. Sometimes yes.

[Englander]

This is why you need to be selective as to where you shop.

Cheaper broccoli and decent cheap peas are best found in Tesco.

Villa have stopped stocking Port Salut cheese at their Phrom Pong branch, absolute disaster.

[zaphodbeeblebrox]

The markup at Tops for imported items is even more than Villa.

It varies item to item. Sometimes yes.

I agree. However, I based my statement on an actual price comparison. I was making an Italian dinner for 30 guests and priced the ingredients at Villa and Tops. For this dinner, which ended up costing about 4500 baht, Tops was about 5% more expensive for the ingredients compared to Villa.

[Ulysses G.]

I also expect a lot of the VERY high price is due to import taxes on many foreign made goods...the Thai govt places some very high import taxes on many imported goods...

I THINK that he is talking about after they have already been imported and bought wholesale INSIDE Thailand.

OP, can you verify?

[BillR]

yes, buying from inside thailand.

[trogers]

I also expect a lot of the VERY high price is due to import taxes on many foreign made goods...the Thai govt places some very high import taxes on many imported goods...it's a good way to get you to buy Thai made items (even when there are no equivalent Thai made items). It's the Thai version of free trade.

Import duties for food items from countries without FTAs can be as high as 80% of CIF cost, which then is x1.07 for VAT.

A CIF cost of 100 becomes 193 before adding the operational cost, profit and VAT of importer, wholesaler and retailer.

[antony77]

I also expect a lot of the VERY high price is due to import taxes on many foreign made goods...the Thai govt places some very high import taxes on many imported goods...it's a good way to get you to buy Thai made items (even when there are no equivalent Thai made items). It's the Thai version of free trade.

Thailand has a free trade agreement with many countries now and therefore there are no import duties Most Australian imported items are now cheaper than they are in Oz.

Villa still has the best quality meat and items that can't be found elsewhere and its English pork Sausages are the best in Thailand

[mark5335]

I also expect a lot of the VERY high price is due to import taxes on many foreign made goods...the Thai govt places some very high import taxes on many imported goods...it's a good way to get you to buy Thai made items (even when there are no equivalent Thai made items). It's the Thai version of free trade.

Thailand has a free trade agreement with many countries now and therefore there are no import duties Most Australian imported items are now cheaper than they are in Oz.

...except, alas, for the wine which remains quite expensive

Edited October 11, 2010 by mark5335

[FarangBuddha]

I also expect a lot of the VERY high price is due to import taxes on many foreign made goods...the Thai govt places some very high import taxes on many imported goods...it's a good way to get you to buy Thai made items (even when there are no equivalent Thai made items). It's the Thai version of free trade.

Thailand has a free trade agreement with many countries now and therefore there are no import duties Most Australian imported items are now cheaper than they are in Oz.

Villa still has the best quality meat and items that can't be found elsewhere and its English pork Sausages are the best in Thailand

Doesn't really what the price is...if you want or need it...you buy it. No use comparing the cost to back home...you aren't in Kansas [or Oz] anymore.

[ljerams]

That very much depends on how long you have lived here. :jap:

[trogers]

That very much depends on how long you have lived here. :jap:

Since 02 Dec 1983.

[ljerams]

I think you misunderstood my comment. If someone is fairly new to Thailand they will obviously compare prices with their home Country.

Incidentally the last time I went into a Villa Supermarket, I felt their prices were rather high.

Must have a revisit to check prices again.

[trogers]

I think you misunderstood my comment. If someone is fairly new to Thailand they will obviously compare prices with their home Country.

Incidentally the last time I went into a Villa Supermarket, I felt their prices were rather high.

Must have a revisit to check prices again.

I get my rack of lamb from either Villa or Carrefour (Rama 4). About Bt600+/kg, which is still much cheaper than eating out.

[Pib]

I also expect a lot of the VERY high price is due to import taxes on many foreign made goods...the Thai govt places some very high import taxes on many imported goods...it's a good way to get you to buy Thai made items (even when there are no equivalent Thai made items). It's the Thai version of free trade.

Thailand has a free trade agreement with many countries now and therefore there are no import duties Most Australian imported items are now cheaper than they are in Oz.

Villa still has the best quality meat and items that can't be found elsewhere and its English pork Sausages are the best in Thailand

I just know many (most) food items, cosmetics, tools, automotive items, etc., from the U.S. are much more expensive in Thailand than in the U.S. I've even asked/joked with some managers in Thai stores as to why the prices are so much more than the U.S.--some have said govt taxes and transportation. However, many items sold in the U.S. are made in China (just up the street from Thailand) so I'm a'thinking import taxes have a greater impact than transportation. Also, FTA's don't necessarily mean zero import taxes; in many cases it just sets maximums for taxes over certain time periods on certain categories of goods/services.

[Ulysses G.]

His comment was on items being marked up by 300% after going through customs and after being sold wholesale with the import taxes already paid.. THAT is totally amazing.

[Pib]

That is Thailand!

[Benjie]

Only 15% Profit Margin??

That would assume that even if they didn't pay their staff, premises, electric, water and rent etc... that they could only ever expect a return of less than 15% before taxes, then there is spoilage and theft. What would be the point?

[BillR]

Only 15% Profit Margin??

That would assume that even if they didn't pay their staff, premises, electric, water and rent etc... that they could only ever expect a return of less than 15% before taxes, then there is spoilage and theft. What would be the point?

15% is the higher end for supermarkets in the states, most is less than 5% net margin. Im sure you've noticed that people need to eat and they load theyre baskets with several items. Its called volume.

Edited October 11, 2010 by BillR

[trogers]

Only 15% Profit Margin??

That would assume that even if they didn't pay their staff, premises, electric, water and rent etc... that they could only ever expect a return of less than 15% before taxes, then there is spoilage and theft. What would be the point?

15% is the higher end for supermarkets in the states, most is less than 5% net margin. Im sure you've noticed that people need to eat and they load theyre baskets with several items. Its called volume.

Bought US beef (Ribeye) at Costco, NY for under $7/lb last April. That's cheap for bulk purchase of min. 12 lbs.

Last price check at Gourmet Market at the Emporium, US Beef selling for Bt1,500 up per kg.

Edited October 11, 2010 by trogers

[Benjie]

Only 15% Profit Margin??

That would assume that even if they didn't pay their staff, premises, electric, water and rent etc... that they could only ever expect a return of less than 15% before taxes, then there is spoilage and theft. What would be the point?

15% is the higher end for supermarkets in the states, most is less than 5% net margin. Im sure you've noticed that people need to eat and they load theyre baskets with several items. Its called volume.

I really do doubt that there is only 5% margin from purchase to sales for your average supermarket.

1.5% is generally the average amount lost due to just theft, then there is spoilage which can be between 3% and 12% for fresh foods, vegetables, fruits and meats/poultry according to the USDA.

That is before you even start into the costs of running the business.

Reading up on it and Supermarkets make around 25% margin in the USA, but as you stated thats at much greater volumes.

[FarangBuddha]

As I stated above, for long-term expatriates, it doesn't matter what some imported item (food, camera, car, or whatever) costs in Thailand vs. "back home." If you want or need it and can afford it, you buy it. If you have been here many many years like many, you don't even remember what things used to cost or what their current cost is anyway. And with many shrunken Western currencies, it's too painful to make the calculation anyway

[Jingthing]

As I stated above, for long-term expatriates, it doesn't matter what some imported item (food, camera, car, or whatever) costs in Thailand vs. "back home." If you want or need it and can afford it, you buy it. If you have been here many many years like many, you don't even remember what things used to cost or what their current cost is anyway. And with many shrunken Western currencies, it's too painful to make the calculation anyway

This is true. Now that I've been here a long time, the only comparisons I usually make are between different Thai stores and markets. Except for Ben & Jerry's ice cream. I can't help remembering buying that on special for under 100 baht a pint and it's now 400 baht here (no, I don't buy it here and probably better for my boyish figure that I am too cheap to buy it). Edited October 11, 2010 by Jingthing

[Englander]

Thailand has a free trade agreement with many countries now and therefore there are no import duties Most Australian imported items are now cheaper than they are in Oz.

I bought the Heinz Baked Beans in Villa that are made in Australia costing a sky high 135 baht last week, surely if these duties have been stopped then such items should cost no more then 40 baht.

Edited October 11, 2010 by Englander

[FarangBuddha]

Thailand has a free trade agreement with many countries now and therefore there are no import duties Most Australian imported items are now cheaper than they are in Oz.

I bought the Heinz Baked Beans in Villa that are made in Australia costing a sky high 135 baht last week, surely if these duties have been stopped then such items should cost no more then 40 baht.

"Free trade agreement" is a bit of a misnomer...they should actually be called something like trade normalization agreements. In most cases, they do not make all goods and services traded between countries tarrif (import tax) free. Usually they normalize or harmonize tariff rates for trade in specificed goods/services or industry sectors to agreed rates (usually fairly low; sometimes none) between the countries. However, there are often whole sectors or categories of goods that are not included in the agreements. Also, purely domestic taxes (like excise taxes) and other non-tariff regulations that raise the costs of imported goods are often not addressed in these agreements.

While FTAs can reduce the cost of imported items quite a bit, it doesn't mean it's gonna cost what it does "back home" minus the shipping cost

[trogers]

As I stated above, for long-term expatriates, it doesn't matter what some imported item (food, camera, car, or whatever) costs in Thailand vs. "back home." If you want or need it and can afford it, you buy it. If you have been here many many years like many, you don't even remember what things used to cost or what their current cost is anyway. And with many shrunken Western currencies, it's too painful to make the calculation anyway

Not completely true. I still am aware of the price difference after staying here for over 20 years. This is because I fly over to Singapore a couple of times a year, and I will buy back imported canned goods, coffee, jam, etc.

I will go over with my cabin bag inside a large suitcase, and fill the suitcase with goodies coming back. Unfortunately, I cannot pack in fresh meat...

[Hawkup2000]

Doesn't really what the price is...if you want or need it...you buy it. No use comparing the cost to back home...you aren't in Kansas [or Oz] anymore.

True. I remember when I was in Oslo on Kho Samui. Sure most products are more expensive on the islands, but if you really want something you just buy it without comparing prizes.;-)