Yes im from Germany :). No offense, but I hope my English is better that your German. Why have you been in Germany? Army?

Hi Ben, Our VTA in Belgium (for games) is 21%. Bye.

 My dad was in the military so I lived in Giessen for two years. I know, that is the wussy bastardized spelling but I can't remember how to get that ess set to work.  Your english is mush better than my German by far, and I do not take offense.

This does depend on the products involved. The short time I was involved in distribution to retailers, they want our products (niche GBA games) for around $26AU (includes 10% GST), and were selling to consumers for $60AU.

This also gave them room to move on discounting - drop to $50, etc.

I actually found it really hard to make money - being a tiny operator. They wanted only a few units at a time, ability to return unsold units. We had to pay freight (overnight shipping) which came to $100-$150 for even 20 or 30 units.

Consider that we were purchasing them (imported) for around $12-$15AU (landed), had import duties, OFLC (classification) costs and more... and it was really tough.

People always underestimate how complex the retail / distribution chain is, and how many "fingers are in the pot". This is one reason why digital distribution is so attractive - even if the revenues are tiny to start with.

Well Not entirely no.

I don't have any links to provide just anacdotal...  As an example,for trade ins, we get $35 for Red steel and then they sell it for $70 - $79 second hand... that a 100% markup and 50% gross margin.

 With the Wii launch, the console was sold at $399 however I picked mine up for $350 (Inc tax) and The company still made a profit.  A friend of mine used to work in BBC computers (A small computer and gaming outlet in Vic - I know, not a good place to gage sales but at least I could get some inside info)... 

At launch, they pre-ordered over 200 Wii consoles and paid $32X (cant remember exactly but it was 320 something).  If they where a larger outlet like EB, Target or what not, and could order in larger quantity, apparently they could have got a further discount of 8% or so. That brings the Wii to well under $300 AUS yet it was selling for $399. (or less with all the specials... that works out to up to 25% gross profit for the launch).

Now however, there are better deals so it brings their profit margin down to around 15%-20% : Not sure exactly but somewhere around there anyway.

 The reason WHY we in Aus pay a higher % markup on all our products is because we are a much smaller country so cost of product per person raises due to shipping, advertising, rent, etc, but not as many sales as the retail stores will not be selling to as many people so they mark up for higher profit.

 I'm not saying it's all the retailers faults but the majority of the blame goes onto the cost of living here in Aus.

Just_Ben,
Why do you think the Nintendo "Listenpreis" is with VAT? Do you have a source for that? I'm working in another industry (apparel), and we always have whole sale prices listed without VAT. Companies don't calculate with VAT internally.

Just_Ben,
I live and work in Germany--Hi from Berlin. So my question was if you think that this practice of including the VAT in retail price quotes is peculiar to video games or toys in Germany. Because generally it is not done like that. Retail prices are quoted without VAT.

You can deduct VAT so you don't have to pay it twice, but don't get the VAT back. You have to pay VAT for your margin, which is calculated by "VAT you charge your customers" minus "VAT your suppliers charge you". VAT is a run-through tax, that's why companies don't calculate with it. Everything inside a company's financials is calculated without VAT. Trust me.

Just_Ben,
Here's something from German Wikipedia about this (sorry everone, not available in English):

http://de.wikipedia.org/wiki/Umsatzsteuer#Betriebswirtschaftliche_Betrachtung

Betriebswirtschaftliche Betrachtung

Die Steuer ist aus betriebswirtschaftlicher Sicht zunächst kostenneutral. Weil die jeweils vereinnahmte Umsatzsteuer mit der zuvor gezahlten Vorsteuer gegenüber der Finanzbehörde verrechnet werden kann, stellt sie nur einen durchlaufenden Posten dar. Für eine Unternehmung ist die Höhe des Umsatzsteuersatzes nebensächlich.

 Yes, same text other quoute: 

Im deutschen Sprachgebrauch – ausgenommen in der Schweiz – wird seit der Harmonisierung des Steuersystems 1967 der Ausdruck „Umsatzsteuer“ gleichbedeutend mit Mehrwertsteuer verwendet. Dies folgt aus der Tatsache, dass das Umsatzsteuersystem in jenem Jahr auf ein Allphasennetto-System mit Vorsteuerabzug umgestellt wurde und somit nur die Wertschöpfung, also der von einer Unternehmung erwirtschaftete Mehrwert, mit Umsatzsteuer belastet wird. Bezahlen muss die Umsatzsteuer in voller Höhe jedoch dennoch der Endverbraucher.

As company you can get the VAT back, if you can write of own paid VAT. Lets talk simple. If a company buys something it normaly has to pay VAT for it, but can get that VAT back, if it has "taken" in the same or more VAT. Thats the normal procedure. That is, because if a company doesn't sell as much as it buys (VAT) the company has to pay the VAT. There is a possibility for two companys to traid without VAT. In that case the german IRS "emulates" the "normal" procedure and would let you pay the VAT back, if you had buyed more than you sold. Thats the "Vorsteuerabzug".

Omg.  I think my english is to bad to discuss this. :(  Well i try it simple put. As company you have to pay the VAT but get it back if you sell something at the same or higher price.