Frustrations/opportunities?? in Colombia

[BogotaJim]

... in response to Re: Re: Re: Re: Re: Frustrations/opportu..., posted by maggiemtnman on May 24, 2005

I would be interested in knowing more about your condo purchase.  Do they have a lot of restrictions about renting out your unit like we have here ?  I live just down the road maybe we can get together sometime ?

[maggiemtnman]

... in response to Re: Re: Re: Re: Re: Re: Frustrations/opp..., posted by BogotaJim on May 25, 2005

Jim, I sent you an off line e-mail to LLM with my contact info. You can call me anytime in Coral Springs. I do not know of any restrictions in renting the condos. Maybe the association will have to approve the tenant but this is not bad becuase I want to get good renters ...

[Pete E]

... in response to Re: Frustrations/opportunities?? in Colo..., posted by CelticUrge on May 23, 2005

We have 2 Carrefors.But they are no Wall Mart,a little more expensive than the other stores like
Exito.Good selection though,best in Cali.
Actually Carrefor is the second largest retailer in  the world after Wall Mart,but way down in terms of volume.And its one of those places wanting $1000 plus for a 17 inch flat panel.
Maybe they are just getting what the market will bear now with so little competition.

Pete

[LatinIntro]

... in response to Re: Re: Frustrations/opportunities?? in ..., posted by Pete E on May 23, 2005

[This message has been edited by LatinIntro]

The problem is not Carrefour or Exito.
WalMart, K-Mart or even Pete-Mart would have very similar prices Exito has. The problem is the import tariff the Colombian goverment has on electronic appliances. We have the highest tariffs in South America for most imports including cars, electronics and other items. We also "enjoy" the highest mortgage rate for new homes, the highest interest rates on loans, one of the highest sales taxes in South America at 16%.

"One of the causes for so much contraband is the fact that most imports of consumer goods, consumer electronics, and apparel (in addition to a 15 percent estimate for freight and insurance FOB costs), are subject to an FOB 1.2 percent surcharge, plus a 20 percent CIF import duty and a 16 percent value-added tax (VAT) assessed on the CIF-duty-paid value of imported products. This approximate 62 percent margin over the basic FOB price of legally imported goods encourages contraband. U.S. exporters should note that consumers in Colombia usually end up paying an additional 80 to 120 percent over the FOB price of imports. Final retail prices usually depend on profit margins agreed on between U.S. suppliers and their Colombian representatives."
from http://www.buyusa.gov/colombia/en/doing_business_in_colombia.html

Nelson

[Pete E]

... in response to Re: Re: Re: Frustrations/opportunities??..., posted by LatinIntro on May 24, 2005

Nelson,
We were told its 24% on computers.9%% plus 16%.I guess the 16% is the sales tax.One thing that is different here,they price an item with tax included.In the US the tax is added later.When you buy something like a TV you get a reciept showing  the actual price you paid,like 16% less,then the tax added for the final price,the advertised price,or the tag on the item.
BUT,lots of items like household goods and cosmetics have no tax but sales tax I think and the price is still high.

Pete

[BogotaJim]

... in response to Re: Re: Re: Frustrations/opportunities??..., posted by LatinIntro on May 24, 2005

Hi Nelson - Does that mean that a gringo like me could invest my retirement nest egg in mortgages and get a nice return ?  What interest rate would I get in dollars ?  or must everything be converted to pesos ?

[jim c]

... in response to Re: Re: Re: Re: Frustrations/opportuniti..., posted by BogotaJim on May 24, 2005

I just got a quote from Citibank 7.50% for a six month CD in pesos. That is double what I was able to get on a lot of money in the US, The exchange rate on a wire transfer today was 2317 cop net for a prefered customer or 2299 normal.The TRM was 2329.  The bank took 12cop or about .75% It seems weird but when the dollar goes down here I make money on my properties because they will be sold for pesos. I still don't understand.

If you have a Colombian partner he better be the one with the money.Things here are not what you think, even though he is probably a nice guy. jimc

[LatinIntro]

... in response to Re: Re: Re: Re: Frustrations/opportuniti..., posted by BogotaJim on May 24, 2005

your return would be in pesos, which given last year's dollar to peso devaluation, would've represented a net profit of about 24-28% on your investment in dollars.
However, the prediction is that this year the peso will devaluate about 6%, and if the prediction holds true, you will still be getting an 18% return on your money.

The trick is getting the money into Colombia.

[maggiemtnman]

... in response to Re: Re: Re: Re: Re: Frustrations/opportu..., posted by LatinIntro on May 24, 2005

Nelson, with the peso stonger against the dollar last year, the return in dollars would have been less if you repatriated to dollars. If the money was left in Colombia then it would appreciate with the prevailing interest rate in pesos. Moving back to dollars would be bad in the future if Uribe can devalue the peso ....

[CelticUrge]

... in response to Re: Re: Re: Re: Re: Frustrations/opportu..., posted by LatinIntro on May 24, 2005

Nelson:

We could just send you a fed-ex package full of cash. RRRRR I assume they are opened sometimes, or even "lost".

[Pete E]

... in response to Re: Re: Re: Re: Re: Re: Frustrations/opp..., posted by CelticUrge on May 24, 2005

I put $500 cash in a UPS envelope one time.The documents arrived without the cash.A lady with UPS in BOGOTA said Colombian  customs stole your money.They open everything,take what they want.
But,you can take as much cash out of an ATM as you want.Its only limited by your bank.With one bank I can take $8000 at one time out and thats only limited to $8000 because thats the monthly limit I set in case someone gets in to my account.Actually the most I ever took at one time was like $2000.

Pete

[CelticUrge]

... in response to Re: Re: Frustrations/opportunities?? in ..., posted by Pete E on May 23, 2005

I agree. Theft is a big problem for retailers in the U.S. What I have heard about retail in Colombia is far worse. The exception here is New Orleans. I have a customer that has about 30 retail stores in the French Quarter, selling gifts, t-shirts, etc. and about 15 or so liquor stores. Third generation family business. Make a lot of money. The owner told me that his losses are about 20%. Now that's a high number for this country. According to him, that's just normal in the quarter, even with people he has known and trusted many years. Anyone know actual numbers for retail in Colombia? I would assume 15-20% is probably normal. That's a lot of overhead.

[Pete E]

... in response to Re: Re: Re: Frustrations/opportunities??..., posted by CelticUrge on May 24, 2005

I don't have any figures on theft by employees.I hadn't even thought about it much.Its so hard to get a job here you would think they would not want to screw it up.Also,I have been told if someone has a prison record its almost impossible to get a job.So I would think that would make them cautious.
But,if not,a small owner run store would seem to have an advantage.Anything without an owner presense is probably at more risk.
But,the other risk could be getting your stuff stolen before you recieve it.We were told if we are going to ship in computers we should have them sent to Buanaventura.Its only 2 hours away.If they come in to Barranquilla there is alot more risk of them getting stolen in transit from there.You can buy insurance,but that might stop when the stuff comes off the boat.It can be sent to a free trade zone near the airport while documentation is happening to enter Colombia.I presume the companies that handle that and store your stuff take responsibility for it?We talked to one company but did not ask that question.Losing a whole shipment could be a major loss for a small operation.
Lots to know before acting here.

Pete

[Jamie]

... in response to Re: Re: Re: Re: Frustrations/opportuniti..., posted by Pete E on May 24, 2005

Theft is rampant here. They steal light bulbs from porches, plants from the garden, if the plants are too big they take cuttings, had a ten foot antenna stolen from my roof they just took the metal left the wires and box. I’ve seen people cutting loose phone or electric cables hanging from the poles. The best way to live in Colombia is to isolate yourself from Colombia

Engage the Exotic – Latin Women
http://International-Introductions.com

[CelticUrge]

... in response to Re: Re: Re: Re: Frustrations/opportuniti..., posted by Pete E on May 24, 2005

There are companies that take care of this for you, such as Expeditors. A bit expensive. Tell them what you want and they arrange all transportation, shipping, insurance, etc. However, you can save a lot of money doing it yourself. Learning curve is there but not as steep as you might think. Don't personally know all the necessary steps but have a friend that does it all the time. Small company in the state of Utah, western U.S. One problem is shipping small quantities of anything. A full container keeps cost way down. Can't always do that. For example, in the U.S. quite a large percentage of our flowers come from Colombia. They are shipped into the U.S. by planes. Must be expensive in some fashion. Light weight but highly perishable items. Consumer cost here is actually quite reasonable, and that obviously includes the transportation cost.

I looked at making garments to meet certain specifications in Bogota and Cali, print and ship to the U.S. Cost of one T-shirt, for example, much lower that in the U.S. but shipping cost alone was about $2.00 per shirt. That kills the savings in manufacturing. Can't do anything about the cost unless sending container size shipments. Cuts cost way down. By the way, as I recall, even with all savings and shipment in containers, bringing same goods into the U.S. from China was lower, on the order of $0.50 per garment. Doesn't sound like a big deal, until you look at it for say 1000 dozen or 10,000 dozen. Then it adds up to a lot of money. I was looking at T-shirts, girls and juniors garments and undergarments. Partly because I have contacts in Bogota. Oh, and Cali has quite a nice industry of manufacturers for ladies undergarments. Very well made and low cost. When shopping in Bogota, I started asking questions, was shown catalogs of suppliers etc., which I memorized and contacted later. Still a possibility, I'm just involved in too many other projects at the moment.

There are indeed business opportunities in Latin America and they are far easier than in the U.S. Just do your homework if interested.