Recently I got an invitation from another European importer of tanning lotions from USA to become their distributor for “my country” (since I have customers in 15 Europan countries, it was hard to say which they meant!).

One of the features described in his offer looked like this: “So now for the first time, we have a strong, focused and large company behind the brand“.

Question: Are those features really beneficial for their sub-disctributors?

Focused yes, that might be a good thing but how you can be focused on one brand when you are the distributor of several other.

Strong and large, sound to me the same as “we have huge overhead costs which we have to cover with a large mark-up”.

I believe that it can never be a benefit for sub-distributors if the importer of their products has a large and expensive organization.

That is why Aroga has a very lean organization with minimal overhead achieved by outsourcing of most of the labor-intensive work.

Our strenght lays not in the number of employees but in the size of  turnover, something that also helps to lower the purchasing costs.

Please give your view on this by commenting below!

Importing lotions from USA for distribution in Europe is necessary in order to obtain lotions with the highest quality and amount of active ingredients.  One complication (in addition to long lead-time and cost for shipping) is that we have to deal with fluctuating exchange-rates between the USD and the EURO.

For most “traditional” European importers this is normally not any problem since they have set either their internal rates or their profit-margins enough high to cover for rate-changes up to a certain percentage.

For Aroga, the recent fluctuation of more than 20% is enough to erase the thin profit-margin that was applied according to our “best-price” strategy.  In order not to sell with loss, I have to take the following two measures:

1. Move to an USD-based price-list for customers outside the EURO-zone.  This means that you only have to consider one currency exchange (from your local currency to USD) and that my USD-prices can be held stable (as long as there are no drastic changes in my buying-conditions).
2. Change the price-list in EURO for customers within the EURO-zone to accommodate changes in the EURO/USD-rate.  This is an unfortunate result of my strategy of having the lowest possible mark-up.

The interesting thing with the recent fall of the EURO (>20% towards the USD) is that it uncovers the profit-margin (or internal rate) added by some other importers.  If they did not change the prices in Euro, it means that their profit was well above 20% which, in my opinion, is too much for a “box-moving” importer/distributer.

You are, as always, welcome with your view on this by commenting below.

Welcome to Aroga’s blog!

Here I will give news and tips directly related to Aroga’s distribution of tanning lotions from Devoted Creations and Ed Hardy Tanning.

For more general tanning-tips, please visit my personal blog www.thetanningguru.com