Supernote A5X is an e-ink tablet with a stylus, an electronic notebook based on the same idea as the better known reMarkable device. It’s manufactured by a Chinese company called Ratta.
The device is not yet available in Europe. As of today, October 2021, there is no official distributor that’ll be able to send the device to European customers in a matter of days, instead of weeks.
What you will learn from the article?
- Why I think it’s a good business idea to import and distribute Supernote in Poland (or Europe).
- Why import duties (despite being 0%) can substantially lower your profit and decrease number of customers?
- What are some major costs in this business model that you have to be aware of?
- What partnerships can make that all possible without big investments in marketing?
- How you could test it with low investment of money and time?
Background of the idea
I live in Poland. I heard some time ago about reMarkable, which is an e-ink tablet, an electronic notebook. I thought it would be a great idea to keep my journal as an electronic text document, so I could digitize my handwriting in no time and write some articles while writing my journal.
Since I’ve seen reMarkable’s web page, I fell in love with the idea. End with loose notes all over the place, keeping them synced with the cloud, less paper, more eco. And, last but not least, I could read ebooks and PDFs with acts of law I had to read about to become a real estate broker and investor.
So I started to look for a device. I didn’t want to spend over $600 for a proper replacement because reMarkable has limited text recognition options. I wished it had because I loved their marketing.
E-ink tablet alternatives to the reMarkable
I started to look for alternatives. In Poland, there is locally available Boox Onyx Note Air. Relatively cheap and with a lot of options and apps. But I felt I didn’t want too many things. I needed a suitable device that would do a little bit more than the reMarkable.
Fortunately, I’ve found a list of the best e-ink tablets with handwriting-to-text recognition. And there it was! The Supernote A5X, right at the top of that list.
It was a bit cheaper than the remarkable. I have decided to buy it. But it turned out that I couldn’t find it anywhere near me. Nothing on Allegro (local e-commerce giant) nor Amazon. Neither new nor used.
“It’s ok,” I thought, “I will buy it at the manufacturer’s website.” And so I did.
The first problem with getting Supernote
5-10 business days, DHL Express, should be any day now. But after a couple of days, I still had no update from the company and asked them when they would ship the thing. They’ve answered pretty quickly, but the news was not what I would expect. They told me the Shanghai warehouse would send it in two weeks because they have just started a week-long national holiday.
Damn it! I was already excited! And I didn’t know up to this point that the Bette company is a Chinese one.
And I didn’t know something even more critical: I will have to pay import tax.
Import taxes for the physical products from China
I buy (and sell) services from abroad, so I’m pretty used to the fact that there is no VAT applied, and it’s pretty straightforward. I pay, get the value, send the invoice to my accountant, and that’s all.
I haven’t thought that for physical products, there are any import duties for almost every country in the world (except Hong Kong and Macau https://en.wikipedia.org/wiki/List_of_countries_by_tariff_rate). I knew that because I can remember, for example, my father was importing motorbikes from Canada many years ago. But I just haven’t thought about that.
Anyway, I got information from the supplier company customer service that DHL will contact me and tell me how much import tax and VAT will be applied.
To determine how much import tax I would pay, I had to provide an import code to our local tariff calculation system.
It turned out that the import tax to Poland is 0% for tablets below 10kg. So it’s worth importing them from abroad. VAT is 23%. And I can deduct from my company taxes.
No distribution in Europe? It seems like a niche!
In the meantime, it got me thinking. If the device is as good as one can read on some blogs, why is it not distributed in Europe yet?
And what if there were dozens of people like me want to use high-tech gadgets to be more productive and want the Supernote now (not in 4 weeks?
I’ve asked customer support whether there is any distribution partner in Europe right now, but they have replied that they are working on setting up an operation center in Europe. No details, though, so I thought I had some time before that would happen.
I’ve calculated how much it would cost to import devices on my own and what price I should set for it to become profitable. I’ve estimated it should cost something between $780-$820.
Pricy, isn’t it? But that would be the price with VAT included, which is 23% in Poland. So for the private consumers, it would be way too much. And I have to apply VAT because I have to pay it when I import goods outside the UE.
So my customer segment would be companies. They can deduct the VAT from the taxes and pay just my margin more to get the device in 2 days instead of 4 weeks. Pretty good value proposition, I figured.
I could ask the manufacturer to give me some discount when I buy more devices, maybe save some money on the transportation. Shipping alone is $48. I’ve checked I could lower it by 40% if I order 10 sets or more.
With the discount from the manufacturer, it would increase my margin dramatically. And there was no other company importing those to Europe.
However, there were a couple of problems I could see at this point.
Minuses of the whole idea of importing Supernote
I had no marketing operations covered. I knew nothing about the e-ink market. My first device was about to arrive in a couple of weeks. I had no idea whether there would be a market for this.
I could create a blog where I publish articles about the features of Supernote. All in Polish, to target the Polish market and Polish customers. That would make a channel to attract customers.
Quick research showed me there are already three quite good blogs about e-ink readers and devices like reMarkable. So either shall I focus on the Supernote only or develop a partnership offer to those bloggers.
The other problem was that there were many configuration options. You can choose between several different styluses and covers. There is also an A6X model, which is smaller than A5X. That makes a bunch of options. I would have to invest much money and freeze it in the equipment.
To make a profitable operation, I would have to sell at least 100 devices a month. My cost structure included not only the marketing but also some staff. Someone would have to take care of listings, customer support, and warranties, importing them from China and sending them back in case of any problems.
At this point, I thought, it was getting way too big to handle that alone while working a full-time job.
I thought I could only post a listing once I get the device and see whether it sells or not. I wanted to test the market. If I sell it, I can order another one or two sets. One for me, one for sale.
Partnership on hold and import duties harder than I thought
In the meantime, I have asked customer support from Ratta to send me an offer with discounts and permission to use their pictures. They’ve answered they will open an operation center in France in 1-2 months, and they will contact me with the center executives once it’s opened.
So the previous value proposition was no longer as compelling as handling importing by myself.
I also encountered some difficulties with import duties. I thought it would be pretty straightforward. If the DHL is going to handle that for me, as I was told, I thought it’s just that.
On Saturday, I got an email from DHL. They received the package, and they have two questions for me:
- Is that package meant to be for a private consumer or a company?
- What’s inside the box?
I’ve ordered it as a company because I will use it in my work. This way, I would avoid paying VAT tax (as a matter of fact, I would, but I can deduct it from taxes).
I’ve answered those questions, and in reply, I got a request to fill in a form to authorize DHL to manage import duties for me. Sure, I can do that. But what’s the EORI number I’m supposed to provide?
Quick research. First, create an account in the PUESC system (Polish system for all import duties cases). Checked.
Second, send a request to generate an EORI number. Complicated form, not so obvious, but with the bit of help of uncle Google, I’ve managed to fill that in. It all took me an hour or so.
That was Sunday.
The next day I got another email asking when I would send back the form. I’ve checked whether I got the EORI number or not. Nothing. I checked in Google, and I froze. It may take 5-20 business days. And the DHL won’t wait forever. After the package arrived in Poland, they would wait 10 days and send it back to China. After 4 days, they will start to charge storage costs.
I’d prefer not to let that happen. I could probably change the invoice to buy it as a consumer to avoid all those import duties and EORI numbers and stuff, but I didn’t want to pay VAT. That would cost me over $120.
Fortunately, I got the EORI in the evening, and I could finally fill in the form and send it back.
Before I did that, I’ve called customer service at DHL to ask some questions and precise whether I must add additional information on the invoice about the shipping, which was missing according to the previous emails from DHL. They told me it’s needed, so I’ve asked Ratta to send me a proper invoice.
Once I sent it all back, the invoice, the form with EORI number, and stuff, DHL replied that the missing information was actually not needed.
In another couple of days, I got another email with a summary of the costs. As I learned before, there was no import tax, and there was the VAT tax to pay. It’s all right. The authorization form cost me over $4 (which I knew about), but handling import duties will cost me another $15 (VAT not included).
That was somewhat unexpected. I’m not sure whether this cost would be applied if I order Supernote as a private consumer, perhaps not, or maybe less. But that’s something that would lower my profit if I were to import Supernote devices by myself.
Supernote A5X with Heart of Metal stylus and basic cover: $519
VAT: 515 PLN ($128)
Authorization to DHL to handle my import duties: 17 PLN ($4)
Handling my import duties: 84,87 PLN ($21)
Totally paid: $720
Tax deductions: $244
Total cost: $476
Ordered: 30th of September
Delivered: 18th of October
Business Model Canvas
- quick delivery of Supernote A5x, a good alternative for reMarkable 2
- freelancers, writers, who run their own company and can deduct the VAT tax
- e-commerce listings
- customer support in case of delivery issues and warranty
- own blog or partners’ blogs
- building blog
- handling import, customer support, and warranties
- own blog (if not using partners’ blogs)
- Polish established bloggers
- commissions (if partnering with bloggers)
- e-commerce listings
- selling Supernote A5X devices
I’ve learned a lot about the import duties and the process. It was too risky for me to start a whole new operation that needed much cash to invest in devices, marketing, and staff.
I could create a listing for a week and check if that will sell, but I’ve decided not to pursue this opportunity. Instead, I will save some time and describe the whole idea using my brand new Supernote, which I did. That’ll bring more content to my blog, and maybe I’ll help someone prepare for such business.
Of course, please keep in mind that I operate from Poland, and I apply Polish law. I wouldn’t say I like too much risk, and I’m already overloaded with the full-time job, family, and the blog. Otherwise, I might be trying to pursue that opportunity, but trying to work on a deal with Ratta before they start their operation center in France.
If you have any questions regarding the business details or the importing stuff, please ask them in the comments below.