Upgrading a hex-v2 device

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SirSkeedle

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Hi all,

I have just purchased a v2 device with the 10 vin limit via gendan here in the UK (authorised seller). I will be upgrading to the unlimited version, I just purchased 10 to keep cost down at the minute, then I will upgrade when I have some more cash around. I noticed via the gendan website the upgrade costs £169 on top of the £299 I paid for the 10 vin. so in total £368, the unlimited is £349. the upgrade on the Ross tech website is $169, about £122. so that is significantly cheaper. can I upgrade me device via Ross tech? TIA
 
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@SirSkeedle: Hi. I've no doubt that Ross-Tch will answer, but my understanding from their webpage is that there are ostensibly 2 x upgrade offers;

  • The first offering is a physical equipment upgrade that relates to loyal VCDS users that have previously purchased a now obsolete/outdated VCDS cable. This offering is rare in commerce these days (and it speaks volumes about RT's corporate value-set) and I assume that it is provided as an overt statement of gratitude by the shareholder(s)!
  • The second offering is a license upgrade that relates strictly to V2 owners
These separate offerings are what mathematicians call "jointly exhaustive" (meaning that there are no other offers) and they are "mutually exclusive" (meaning in this instance that once a V2 is purchased, users can't mix-and-match between offers)

From your explanation, it appears that you took a market position when you first decided to buy your V2 device. For whatever reason, you concluded that the best option (for you) was to buy a version of V2 with a 3 x VIN restriction. Your obvious advantage from this decision was a saving in purchase price - which you have enjoyed in the interim period.

With time however, your needs have changed and this has resulted in a desire to increase the license-count. Without intending offense, it doesn't seem proper for the seller to be responsible for funding the cost of your changed requirements - particularly given that you had the option of buying a V2 with unlimited VIN as the original purchase and you chose otherwise.

On the second issue of the comparative price for VIN upgrades across the pond, I preface the words below by admitting that I am totally agnostic regarding Gendan's prices (I have never purchased equipment from them) - but I have a keen interest in commercial pricing principles/policies (having devoted a period of my working life to the subject).

It's clearly no coincidence that the cost to upgrade for the 2 x currencies has EXACTLY the same digits!! At a nominal exchange rate of 1 x Pound sterling=$1.4 USD, this means that folk on the wrong side of the pond pay a surcharge of about £47 (or 28%) for each upgrade that is processed using the local agent

Given that a license upgrade is the simple task of shoving an email delivered activation code into the VCDS Interface Config utility, this level of surcharge is very interesting - and I would have thought that the surcharge was eminently avoidable in the 21st Century

Now, I'm not naive enough to expect that commercial product pricing will necessarily be cost-based, but perhaps the surcharge reflects Gendan's additional costs as the intermediator between RT and the user (assuming that Gendan receives a reasonable margin for selling the service in the the UK within the $169 USD that RT charges end use customers).

According to the web, the median hourly earnings for full-time employees in the United Kingdom from 1997 to 2020 was about £15. I have no idea how Gendan pays its employees - but using median UK wages, this means that a cost-based surcharge would permit roughly 3 hrs work-effort - again interesting!! Of course, the essential dichotomy with assuming that the surcharge is cost-based is that it's size is determined entirely by the UK/USD exchange rate, which is entirely divorced from movements in the cost of wages!!

Anyhow - my guess is that there is a very clear message in Gendan's pricing; "to those of our customers who are sufficiently informed about the Ross Tech alternative for upgrading VINs, don't use us!! I intend no offense to Gendan in suggesting this message - it's just simple logic!!

Don
 
   #3  

SirSkeedle

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@SirSkeedle: Hi. I've no doubt that Ross-Tch will answer, but my understanding from their webpage is that there are ostensibly 2 x upgrade offers;

  • The first offering is a physical equipment upgrade that relates to loyal VCDS users that have previously purchased a now obsolete/outdated VCDS cable. This offering is rare in commerce these days (and it speaks volumes about RT's corporate value-set) and I assume that it is provided as an overt statement of gratitude by the shareholder(s)!
  • The second offering is a license upgrade that relates strictly to V2 owners
These separate offerings are what mathematicians call "jointly exhaustive" (meaning that there are no other offers) and they are "mutually exclusive" (meaning in this instance that once a V2 is purchased, users can't mix-and-match between offers)

From your explanation, it appears that you took a market position when you first decided to buy your V2 device. For whatever reason, you concluded that the best option (for you) was to buy a version of V2 with a 3 x VIN restriction. Your obvious advantage from this decision was a saving in purchase price - which you have enjoyed in the interim period.

With time however, your needs have changed and this has resulted in a desire to increase the license-count. Without intending offense, it doesn't seem proper for the seller to be responsible for funding the cost of your changed requirements - particularly given that you had the option of buying a V2 with unlimited VIN as the original purchase and you chose otherwise.

On the second issue of the comparative price for VIN upgrades across the pond, I preface the words below by admitting that I am totally agnostic regarding Gendan's prices (I have never purchased equipment from them) - but I have a keen interest in commercial pricing principles/policies (having devoted a period of my working life to the subject).

It's clearly no coincidence that the cost to upgrade for the 2 x currencies has EXACTLY the same digits!! At a nominal exchange rate of 1 x Pound sterling=$1.4 USD, this means that folk on the wrong side of the pond pay a surcharge of about £47 (or 28%) for each upgrade that is processed using the local agent

Given that a license upgrade is the simple task of shoving an email delivered activation code into the VCDS Interface Config utility, this level of surcharge is very interesting - and I would have thought that the surcharge was eminently avoidable in the 21st Century

Now, I'm not naive enough to expect that commercial product pricing will necessarily be cost-based, but perhaps the surcharge reflects Gendan's additional costs as the intermediator between RT and the user (assuming that Gendan receives a reasonable margin for selling the service in the the UK within the $169 USD that RT charges end use customers).

According to the web, the median hourly earnings for full-time employees in the United Kingdom from 1997 to 2020 was about £15. I have no idea how Gendan pays its employees - but using median UK wages, this means that a cost-based surcharge would permit roughly 3 hrs work-effort - again interesting!! Of course, the essential dichotomy with assuming that the surcharge is cost-based is that it's size is determined entirely by the UK/USD exchange rate, which is entirely divorced from movements in the cost of wages!!

Anyhow - my guess is that there is a very clear message in Gendan's pricing; "to those of our customers who are sufficiently informed about the Ross Tech alternative for upgrading VINs, don't use us!! I intend no offense to Gendan in suggesting this message - it's just simple logic!!

Don
thanks for your reply. it does seem that way. Although it seems to be like this for all the UK sellers. the device cost is more, although to be expected I suppose as its imported, but the upgrade seems to be more everywhere. my initial thought was that the upgrade cost is subject to VAT here in the UK...??? we basically have a 20% tax on everything so I was wondering if gendan have to charge that as they are operating in the UK. thanks again
 
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DV52

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@SirSkeedle: Yes, I'm familiar with VAT - In addition to its convicts, that delightful (not) form of tax is something else that our colonial masters also gifted to Australia (we call it GST - Goods and Services Tax).

I'm not sure that VAT can be an explanation because it fails the same rationale as my cost-based surcharge hypothesis; the additional amount that Gendan receives is tied to fluctuating FOREX rates whereas VAT is a known, stable quantity.

It would be a very brave risk manager indeed that recommended to the Board that the company should fund its VAT/GST invoices via volatile revenue from the foreign exchange market!

Don
PS: Out of interest - does VAT apply if a UK resident pays Ross-Tech directly for the VIN upgrade? If so, how is the tax component transacted?
 
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langers2k

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I'm UK based and upgraded my VIN count directly with Rosstech in $ so it should be possible. It might help I bought my interface in the states while I was travelling but it's always been registered with a UK address.

Depending on your payment method there might be currency conversion fees etc.
 
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SirSkeedle

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@SirSkeedle: Yes, I'm familiar with VAT - In addition to its convicts, that delightful (not) form of tax is something else that our colonial masters also gifted to Australia (we call it GST - Goods and Services Tax).

I'm not sure that VAT can be an explanation because it fails the same rationale as my cost-based surcharge hypothesis; the additional amount that Gendan receives is tied to fluctuating FOREX rates whereas VAT is a known, stable quantity.

It would be a very brave risk manager indeed that recommended to the Board that the company should fund its VAT/GST invoices via volatile revenue from the foreign exchange market!

Don
PS: Out of interest - does VAT apply if a UK resident pays Ross-Tech directly for the VIN upgrade? If so, how is the tax component transacted?
hmmmm. maybe the UK companies are just charging whatever they like. if so, do you think anything is stopping me using Ross tech directly? thanks
 
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SirSkeedle

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I'm UK based and upgraded my VIN count directly with Rosstech in $ so it should be possible. It might help I bought my interface in the states while I was travelling but it's always been registered with a UK address.

Depending on your payment method there might be currency conversion fees etc.
ah okay. I'm wondering if you need to purchase upgrade from same place as you purchase the device. if not, I'm just gonna save myself £40! thanks
 
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PS: Out of interest - does VAT apply if a UK resident pays Ross-Tech directly for the VIN upgrade? If so, how is the tax component transacted?

When I upgraded mine there was no VAT to pay as there are no physical goods arriving in the country to attract VAT I guess.
 
   #9  

SirSkeedle

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When I upgraded mine there was no VAT to pay as there are no physical goods arriving in the country to attract VAT I guess.
thanks for the heads up. think I will just upgrade there. works out a lot cheaper. maybe others will see this if they are in the UK. get the 10 vin and upgrade, it will be cheaper! haha. thanks
 
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   #13  

DV52

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We have no VAT here, however in the UK, vendors have no choice but to charge it.
Uwe: Yes, I'm aware that VAT is a uniquely UK construct and that America doesn't have the facility - but that's not the point.

Notwithstanding that the product in this case is a software license, the real question is: as a provider of product to a UK resident - is Ross-Tech viewed as "importer" for the purposes of VAT (in the UK) in the same way as it would be had it sold the product locally?

What prompted my question is that in Australia, consumers pay GST (which is our equivalent to VAT) on all online goods bought from overseas. So, the tax liability here applies irregardless of the product type, or the location of the importer. The extract below summaries our GST arrangement (from here):

GST applies to digital products and other services imported by Australian consumers. Affected supplies that are caught by the new law include not only the streaming or downloading of movies, music, apps, games, e-books, online supplies of software, digital trade journal/magazine subscriptions and other digital products, but also offshore services such as website design, publishing services, consultancy and professional services (for example, legal advice, architectural services and so on).​

My recollection of the rational for the application of our GST to the growing trade in e-commerce is that it was intended to make competition with local businesses more equitable - but no doubt the resulting increase in Government revenue was also a factor!

Now, I'm not sure what happens (or, what is meant to happen) here if an Australian resident pays $169 USD to Ross-Tech for a license upgrade. Hence my question about the UK practice for VAT.

Don
 
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Uwe

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the real question is: as a provider of product to a UK resident - is Ross-Tech viewed as "importer"
I don't see how someone who has no presence in a place, and over whom that place's government has no jurisdiction, could possibly be viewed as the importer.

-Uwe-
 
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DV52

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I don't see how someone who has no presence in a place, and over whom that place's government has no jurisdiction, could possibly be viewed as the importer.

-Uwe-
Uwe- I really do understand your position! However, I invite that you consider that for sales made via e-commerce in the 21st century - "someone" (i.e. Ross-Tech) DOES have a "presence in a place".

I'm certainly not a tax expert, but my understanding is that at least for our GST (and maybe for VAT - I'm not sure) - in the same way that e-commerce does not rely on the physical transfer of cash between buyer and seller, neither does it rely (for the payment of our GST) on the seller's physical "presence in that place".

Again it's my non-professional understanding that what does matter is that the virtual "presence in the place" resulted in the exchange of monies for which a tax is liable to the Government in country of sale. Now, you are free to argue with the Australian Taxation Office that the country of sale was actually America (for VCDS license upgrades) - good luck with that!!

No offense, but given that this form of tax is not applied in America, you may not be aware of how it works - GST is not funded by the seller in the same way as commercial tax-on-profit. Instead, GST (and I assume VAT) is paid up-front by the buyer when the sale is transacted. So the seller separately declares the GST amount in the invoice and the funds are receipted in the buyer's payment. The seller then passes the GST to the Tax Office - effectively making the seller the tax collection agent.

I don't want to labor the point. The only good thing about GST is that while it's the buyer's responsibility to pay, it's not the buyer's responsibility to decide if the tax is payable - a small mercy admittedly, but I'll gladly take it in this case !! .

If Ross-Tech's invoices to Aussie users for VIN upgrades do not include a GST amount - then as a potential buyer I'm more than delighted with the omission!!

Don
 
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SirSkeedle

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Uwe- I really do understand your position! However, I invite that you consider that for sales made via e-commerce in the 21st century - "someone" (i.e. Ross-Tech) DOES have a "presence in a place".

I'm certainly not a tax expert, but my understanding is that at least for our GST (and maybe for VAT - I'm not sure) - in the same way that e-commerce does not rely on the physical transfer of cash between buyer and seller, neither does it rely (for the payment of our GST) on the seller's physical "presence in that place".

Again it's my non-professional understanding that what does matter is that the virtual "presence in the place" resulted in the exchange of monies for which a tax is liable to the Government in country of sale. Now, you are free to argue with the Australian Taxation Office that the country of sale was actually America (for VCDS license upgrades) - good luck with that!!

No offense, but given that this form of tax is not applied in America, you may not be aware of how it works - GST is not funded by the seller in the same way as commercial tax-on-profit. Instead, GST (and I assume VAT) is paid up-front by the buyer when the sale is transacted. So the seller separately declares the GST amount in the invoice and the funds are receipted in the buyer's payment. The seller then passes the GST to the Tax Office - effectively making the seller the tax collection agent.

I don't want to labor the point. The only good thing about GST is that while it's the buyer's responsibility to pay, it's not the buyer's responsibility to decide if the tax is payable - a small mercy admittedly, but I'll gladly take it in this case !! .

If Ross-Tech's invoices to Aussie users for VIN upgrades do not include a GST amount - then as a potential buyer I'm more than delighted with the omission!!

Don
As far as i am aware that is how VAT works here too. The seller "charges" it seperately to the cost. so an invoice will list "ross tech upgrade" £90, then VAT £18, total £108 for example. Not sure about responsibilties, but we pay the invoice which has seperate VAT, then the seller basically hands it over, a "collector" as you say. A family member of mine runs a business which just applied for VAT as they turnover a certain amount each year now, so he now has to start charging customers more, adding 20% on top. the benefit is, he himself doesnt have to pay VAT on anything now. so anything he buys via the business can be "claimed back" for VAT. so if he buys an item for £80 + £16 VAT (total £96) he will still have to pay the full £96 VAT, but then can "claim" it back. i believe they just deduct it from what you owe them....
 
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On the second issue of the comparative price for VIN upgrades across the pond, I preface the words below by admitting that I am totally agnostic regarding Gendan's prices (I have never purchased equipment from them) - but I have a keen interest in commercial pricing principles/policies (having devoted a period of my working life to the subject).

It's clearly no coincidence that the cost to upgrade for the 2 x currencies has EXACTLY the same digits!! At a nominal exchange rate of 1 x Pound sterling=$1.4 USD, this means that folk on the wrong side of the pond pay a surcharge of about £47 (or 28%) for each upgrade that is processed using the local agent

Given that a license upgrade is the simple task of shoving an email delivered activation code into the VCDS Interface Config utility, this level of surcharge is very interesting - and I would have thought that the surcharge was eminently avoidable in the 21st Century

Now, I'm not naive enough to expect that commercial product pricing will necessarily be cost-based, but perhaps the surcharge reflects Gendan's additional costs as the intermediator between RT and the user (assuming that Gendan receives a reasonable margin for selling the service in the the UK within the $169 USD that RT charges end use customers).

According to the web, the median hourly earnings for full-time employees in the United Kingdom from 1997 to 2020 was about £15. I have no idea how Gendan pays its employees - but using median UK wages, this means that a cost-based surcharge would permit roughly 3 hrs work-effort - again interesting!! Of course, the essential dichotomy with assuming that the surcharge is cost-based is that it's size is determined entirely by the UK/USD exchange rate, which is entirely divorced from movements in the cost of wages!!

Anyhow - my guess is that there is a very clear message in Gendan's pricing; "to those of our customers who are sufficiently informed about the Ross Tech alternative for upgrading VINs, don't use us!! I intend no offense to Gendan in suggesting this message - it's just simple logic!!

Don

Just to clarify the rationale behind the pricing:

- Yes, we have to charge VAT, currently at 20%.
VAT registered businesses can claim that back.
Consumers have to pay it and there's nothing we can do about that.

- At the moment the exchange rate is indeed around 1.4 USD to the Pound, but don't forget that's the mid-market rate. When processing payments the banks will knock a chunk off that. For example, PayPal's rate as I type this is 1.318 USD.

But a far bigger factor is that since the HEX-V2 launched, the UK has been going through the cluster**** that is Brexit.
The exchange rate (the mid rate, before the banks take their pound of flesh) has been generally nearer 1.2 (and as low as 1.15 last March)

So the prices are much closer than they may appear, and with the volatility of the exchange rates with the world as it is at the moment, it's not practical to track the prices with daily rates, especially since we pay for them over a longer term.
 
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Just to clarify the rationale behind the pricing:

- Yes, we have to charge VAT, currently at 20%.
VAT registered businesses can claim that back.
Consumers have to pay it and there's nothing we can do about that.

- At the moment the exchange rate is indeed around 1.4 USD to the Pound, but don't forget that's the mid-market rate. When processing payments the banks will knock a chunk off that. For example, PayPal's rate as I type this is 1.318 USD.

But a far bigger factor is that since the HEX-V2 launched, the UK has been going through the cluster**** that is Brexit.
The exchange rate (the mid rate, before the banks take their pound of flesh) has been generally nearer 1.2 (and as low as 1.15 last March)

So the prices are much closer than they may appear, and with the volatility of the exchange rates with the world as it is at the moment, it's not practical to track the prices with daily rates, especially since we pay for them over a longer term.
Fully understand your position mate. Just wish ross tech could do something to try to even it out. I would rather support you guys as you are in the UK, no offence to everyone else haha, but also at the same time, why would i spend £40 extra approx for the same service... just to be honest...
 
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@Mike@Gendan: Mike, thanks for the reply. I certainly wasn't suggesting anything nefarious about Gendan's pricing. But, with no offense intended, I must say that I'm surprised at your response!

Setting aside for the moment the matter of the company practice of receipting VAT payments (i.e. commercial tax liability) via income earned on the Forex market and assuming that the consequential risk is small because the volume of these license upgrades is small, there is the question of the procedural requirement of VAT (which I assume is similar to our GST).

Isn't it a requirement in UK that the seller MUST by law show a separately itemized amount on the buyers invoice reflecting the VAT component of the total payment? If this is so, how does this happen when Gendan relies on the Pound-sterling/USD exchange rate to fund this payment? Or, asked another way - how does the total payment of $169 USD*1.4= £236.60 get divided into the categories of product cost plus separately, VAT (on the buyer's invoice)?

Or are you saying that the calculation of £236.60 above is just the product cost and that VAT is an additional charge? In which case @SirSkeedle example in the above post of paying an "extra £40", which is really an extra £47 - is in fact an additional charge of £94 (or, almost 40%) !!

Don
 
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Isn't it a requirement in UK that the seller MUST by law show a separately itemized amount on the buyers invoice reflecting the VAT component of the total payment? If this is so, how does this happen when Gendan relies on the Pound-sterling/USD exchange rate to fund this payment? Or, asked another way - how does the total payment of $169 USD*1.4= £236.60 get divided into the categories of product cost plus separately, VAT (on the buyer's invoice)?

Or are you saying that the calculation of £236.60 above is just the product cost and that VAT is an additional charge? In which case @SirSkeedle example in the above post of paying an "extra £40", which is really an extra £47 - is in fact an additional charge of £94 (or, almost 40%) !!

Don
Yes, for a company to claim the VAT back we need to provide them with an invoice itemising the VAT separately.
As a large proportion of our customers are end users though (who cannot claim VAT back), we choose to display our prices including VAT (i.e. £169 inc. VAT is actually £140.83 + £28.17 VAT).
We find this saves confusion as VAT registered businesses know to check whether pricing includes VAT, whereas end users tend to be less in the know.
Because VAT applies to the majority of goods it's common practice in the UK for shops including supermarkets to list prices including VAT. I know that shoppers in the USA for example are more used to having to add sales tax to the price 'on the tag'.

We don't 'rely on the exchange rate to fund a payment' as you put it.
We know the cost price Ross-Tech will charge us in USD, and when it will be charged (upgrades are billed periodically). We do have to hedge our bets to a certain extent though, as we don't know whether the exchange rate will change during the billing period, essentially making an upgrade we've already billed the customer for cost more or less when we come to pay for it.
This is the nature of international business.

So we have to average out the exchange rate over time to give us a predicted cost price, and then set our retail price so if the currency dips a little it's not going to mean selling at a loss.
We do occasionally re-evaluate the exchange rate we're working with if there is a sustained change but as I mentioned before, it's too volatile to do that at the moment.
 
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