The basic formula we use to price our products is simply this:
Japanese price in yen converted to dollars at the current exchange rate + our costs to import. That's it!
One of the difficult things about running a US-based store that sells Japanese merchandise is that we're very much affected by the exchange rate. You are too if you order items over the web from Japan - at some point, your money has to change between dollars (or whatever currency is used in your country) and yen. In our case, we make that change before we put our clothes up for sale, so the exchange rate is already factored in to our prices.
With Japan-based stores or shopping services that price in yen, it may be difficult to determine how much you're really going to pay until you actually have to send payment. PayPal and other payment processors can skim a little extra off the top of the exchange rate, or add actual fees (which you may not see until you check your billing statement at the end of the month). And the exchange rate itself may not be what you think it is - as of this writing, it's 76 yen to the dollar. That can fluctuate, but it has been trending downward (for the dollar) over the past few years. Only five or so years ago, it was 130 yen to the dollar. That's a huge difference - it means our costs for the clothes we sell are almost double what they would have been at that time. It also means that, on a straight exchange, an item that costs 10,000 yen will cost about $130, not including import costs.
You can always see the current exchange rate on our homepage, however be aware that this is provided for informational purposes only.
We try to keep our prices as low as possible, because obviously the lower our prices, the more we sell. However, we must also recover the import costs we do have or there's no point for us to be in business. Importing clothes from Japan involves shipping costs, fees of various kinds, import duties, and other costs. We do what we can to minimize these costs so we do not have to pass them along to you, but we do have to add a small markup to our clothes to recover the costs we do have. That averages about $10 per item, but it can be more or less depending on various factors (especially the size and weight of the item, with smaller, lighter items having lower costs to import).
We're still confident that our prices are lower - in some cases much lower - than what you would pay with a Japan-based store or shopping service. Shipping a single item from Japan to the United States can cost upwards of 3,000 yen, or $40 - far higher than the $10 or so that we add to the dollar price of each item. And again, if you're thinking that the exchange rate is still 130 yen to the dollar, you may get a nasty surprise when you look at your billing statement after you've already paid a Japan-based seller.
A note on shipping charges
Our shipping charges include all costs associated with shipping your package, not just postage. You do not need to worry about how much each individual itemized charge is (for things like insurance, the box, labels, packaging, etc.) - we just wrap everything into one basic shipping charge. If your total shipping charge does cost us less than our web site estimates, we will manually reduce your charge when we ship your order. However, usually we actually lose a little bit of money on shipping - it's very difficult to get the shipping charge exactly right including all associated costs, so we try to err on the side of the customer.
We hope this was informative and not too hard to follow!
Monday, October 12, 2009