Why is high end gear made in EU much more expensive in EU than in the US??

[duvalle]

i sometimes order in us when it's cheaper and worth it.

tax calculation i allways do:
(product cost + shipping) + costums tax (i.e. 4.5 %) + 19% vat

but you have to know that if the ordered product breaks and you need repair you could be in trouble ...

here is what i.e. fletcher says:

Also, please realize that equipment purchased from Mercenary carries a US warranty and while we double them, you will be financially responsible for getting the hardware back to the US for repair, and very possibly back to your country after repair. There are times when we may know a reputable repair shop in your area that can cover the problem, but if we don't, the unit will have to be shipped back to the US.

so that's why i only order in us when i save more then 1/3 ...

[Andraes]

Hi Ruphus, let's forget the customs for now. It is OT and i am shure you are right eg customs in your country. Apparently Germany is more protective towards it's own economy then my country. (as is US)

[ivoonline]

Not seeing any responce from our European dealers on this topic. Why?
If i can buy new gear 30% cheaper it is not a difficult choise!!
Buy 3 of what you need, sell 2 and have one for free...

NICE..

[Zuewi]

I think that a lot of european dealers didn't update their prices, they just sell at the same price like always and never go down no matter how cheap the dollar is right now...
If the Dollar goes up again, i bet they will rise the prices...
I was also considering from buying from US right now cause most european dealers just doesn't get it....

[Crowley]

Most of Europe levies import duty on foreign products. China, US, no matter, the importers have to pay the import duty, which gets passed along. Then, in order to pay for running the governments there is VAT to charge, making dealers act like tax collectors. Both of these things drive up the price. If the gear is made in the EU, there are high costs of manufacturing if labor is involved, and still VAT.

In the US, we pay little import duty. Stuff flows in from China like water. VAT doesn't exist, and though most of the states have sales tax, some do not, and online retailers often don't charge sales tax. Since the Yuan is artificially held to a fraction of the dollar, Walmart can fill the shelves with imports for a fraction of what domestic products would cost.

Labeled "Made in USA" products must comply with a government standard which precludes substantial foreign content, so they tend to be more expensive to produce.

American consumers then see a huge price tag difference between US made and Far East, which is enough for many of them to choose the cheaper import. EU made products tend to be very expensive here, unless they are actually routed through the Far East to the US, which many are.

The dollar is weak vs the Euro and even vs the Canadian dollar and so EU importers can get a great deal now even with import duty. Since EU pays import duty on all imports, even those from China, there is a significantly narrower price spread at retail. That is why we (a small US manufacturer) sell a substantial proportion of our products to European dealers.

Bob Crowley

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[Rossco]

Thanks Bob Crowley for your informative post.

Would any European manufacturers care to add their experiences?

[jamwerks]

I'm in Paris and make it back to the states about once a year and always come back loaded with stuff, hoping not to get stopped at the customs desk heading out of the airport (never happened yet!). I myself can't find the logic in this situation. VAT aside, prices in europe generally go from 30%-60% more! The fact that on a rare occasion this isn't the case, makes me think that something fishy is going on. If there were a real logic behind this, you'd find more consistency in the differences.

Even for a gear buy of say $3000, it's usually cheaper to get a low cost, off season ticket to N.Y., a buy it there through the net...

[Andraes]

EU wholesales cannot react too quick on USD fluctuations. Some bought big batches of gear at a high dollar price and went bankrupt for they had to sell at lower rates. The dollar is not very stable, it rocks (one could say)

All these things could be harmonised but that would need a wordlwide organisation from music merchants. US has NAMM wich is more then a show, it is an organization with branch research and education. EU has Frankfurt wich is a tradeshow organisation. In other words, they are selling trade show floor. So EU market information is hard to get. Likewise Apple considers EU as 'a jungle' retailers have less then 8% profit on selling an Apple so music retailers sell PC's....

This will not change until NAMM goes worldwide (and why would they do that?) and/or Frankfurt would become a music retail organization. (And why would they do that?)

Our EU even falls out of fear your USD falls! Happy M.L.K. day!

[Ruphus]

There is no excuse.
Established European business owners won´t move a pinky if there´s no outrageous profit in the deal first.

That´s a simple truth.

I am currently moving a 20 foot container to overseas. Originally contracted for 5000 € now they pushed it up to 8000 telling me proven lies about vessel fees and alleged sanctions. And that from a huge "serious" shipping company!
Made me so angry that I switched the company .. which only added another 1000 € to the bill, making it 9000€.

There is nothing to paint about todays business methods.
Greed, greed, greed and states and laws made to back up precisely unethical conductments.

People got to show that they are not only concerned, but that they understand the fake shit and that they protest.
Otherwise there will be no stop of this trend and things will get out of hand to the state of civil wars.

F*** these mentalities that can´t get enough!

Ruphus

[lpkyer]

Personally I'd rather work 4 days a week with 4 weeks off

[Rossco]

This has been a very useful thread because it has exposed some very raw nerves in the form of serious price gouging by European shops and manufacturers.


The internet has been a great leveller enabling people to cross borders to go shopping and I'm sure given the number of responses on here, that people are certainly voting with their feet and simply clicking on a mouse, linked to a shop in the U.S. everytime they want to buy.

Wonder how long before the Euro manufacturers and shops catch on and lower their prices to try and attract local buyers?

[jimmyjimjim]

One european(swedish) shop, Golden Age Music, has been a pretty pleasant surprise for me a couple of times regarding pricing.
More or less US pricing plus VAT.

[deft_bonz]

Originally Posted by Melodioso

One reason might be that the US market is bigger than the European market, so the US distributors are ordering more units meaning cheaper price per unit. In my country (Swissland), the market is small, so the prices are crazy! Most of my gear, I bought in the USA. The rest in Germany.

True true

NEvertheless there dealers here in Switzerland, that can hold up with US prices. You just have to ask for the Mercenary.com-price, plus s/h and VAT of course and they'll do it

[Andraes]

When gear is sold often 'staffels' are used. Upon a greater amount of ordered products you get a higher discount. (I thinks this is what your looking for Ivo..)

This explains why EU gets fewer dealers with lesser service. (The largest companies in the largest countries are trying to eat the whole market and they can beat on price.) A lot of customers act on price, pros usually need 24/8 support so they invest in that.

So maybe US dealers use a smaller margin (due to the openness of their market and their large chainshops.) In EU that is 30-40%

[Fletcher]

If the EU margin is 30-40%... lemme confirm it for you... US dealers work on WAY less. In the US there are maybe 15-20 "boutique" shops [our size +/-3db] who work more in the "high end" than in "general merchandise" [though several of them travel down market as well as holding the real hi end lines, half a dozen "mid-size" [Dale Pro Audio, West helLAy Music, Washington Music, etc.]... and two "major" retailers [Banjo Mart and Sweetwater] who have begun to come upscale enough to give us agita... and some who "dabble" in audio while their main businesses are elsewhere. There is a hell of a lot more competition than meets the eye in this country... and no shortage of sales styles to go along with it.

I think this gives the consumer the best set of options as no one store is right for or can properly service every customer's needs... you have clients that require a lot of backup/service... you have clients that only need great prices... you have clients in between... the one thing you don't have is the ability to make 30-40 points here... but again we don't have the social programs and "cradle to the grave" benefits which cost a bloody fortune to the employer... so while it's tough, we can survive on 17-22%. In our world "getting rich" ain't an option... but going to a job you love everyday [and frankly, the majority of our staff are 'misfit toys' who are pretty much enemployable in the "straight" world] is priceless.

[videoteque]

Greed, greed, greed and states and laws made to back up precisely unethical conductments.

This is the problem. Everything is made to favourish them!!!

We europeans should start to think and buy from who sell cheaper. I don't care if it is in Europe or in US.

For example this distributor sell Peluso Mics in Italy at a reasonable price: Lucky Music, but they don't have any on stock!!!

[Andraes]

Fletcher, 'Boutique' (high end gear) is a bit less. (-10-15db) Your point of 'cradle to grave' social security is a great contribution to a sensible explanation.

So it's cheaper buyprice due to quantity, probably cheaper in-country logistics (Wells & Fargo) lower rates, lower taxes and lesser social security.

PS Whatever the dollar will do today, you will solve it with creativity and love!

[Ruphus]

Yeah, Andraes, there it is again: Social security, the big evil that conservatives like to point on for an argument to milk labour for less and lesser, if not let the state pay their part of social duties, or release it, and / or cut down on emloyees working rights.

Here some background from today, not 30 years ago:

# Social care is not as intact in the hole EU the way it is in Sweden ( still ).

# Taxes are vastly paid by the little people.
The more powerful an industry the less it has to pay taxes, or even has the state grant subsidies. If powerful enough like the Deutsche Bank they can even determine themselves how much or if they decide pay taxes at all.

# Unlike employers who pay only a rough third of the employees social tax, the employees gets taxed on the same net sum again. Taxes again on each and every spendings, on savings and on private insurance / pensions.

# For employers up from certain turn-over there exists a plethora of write-offs options.

# The biggest part of the social money is not being spend on the poor, but first on overblown compensation for middle- to high class officials, with free rent, free secretary, communication, free healthcare etc.pp. Secondly on middle-to high class employees for "advanced educatione courses", health cures and subsidized early pensions.

# No matter how many decades you might have paid in as an employee, if you get unemployed there´s about one year of 50% of your last net income that you can get. If you havn´t found new income until then you´ll be depending on social welfare which isn´t really that much higher than in the US.

# In Germany meanwhile there are a couple hundred thousands of homeless street kids. Every sixth kid now grows up in powerty. In Berlin, the capitol, it is even every third children.
2.6 million children in hole Germany.
The social wellfare to feed them is 2.72 € per day and head.

# In Germany, and as I´d think more or less similar in most states around the world, 60% of the NGP is absorbed by corruption.

This last point is what´s worth considering before all else.


Social taxes are not the reason for overdone profit margins, lesser even the actual social care.

Ruphus

[fastonkeys]

I have an office in London so I'm in the UK at least 10-11 times per year... I'm convinced that the pricing formula is simply: take US retail price and substitute with GBP currency symbol. It seems to be nearly universal... at least in the UK.

[ickefes]

Where I live there is a Volvo factory and one of the high up employees told me that they currently don't sell to Americans since the dollar is so weak, and most international businesses deal in US Dollars if I am not wrong.

But I am not really complaining on the second hand/ebay market in the USA. I can find some real great prices there for things that I want.

[gallerytungsten]

There have been a bunch of reasons given for pricing differences. Besides the VAT, overhead costs, import duties, volume purchasing, and retail margin differences, here's another one. Pricing from manufacturer to distributor may be in different currencies as well. Eg, the agreement might call for the EU distributor to pay in Euros and the US distributor to pay in dollars. When the currency values change, the manufacturer may elect to keep prices stable, rather than to surprise their distributor or engage in constant pricing changes. When you add all these factors up, it's easy to see how prices can get seriously out of balance in different countries.

Oh yes, something else. For the larger (multinational) companies, there are all kinds of business "games" that go on for motives such as reducing tax liabilities by moving profits "offshore" to more favorable taxing jurisdiction. This type of behavior can result in even more pricing discrepancies.

[Geoff_T]

Originally Posted by fastonkeys

I have an office in London so I'm in the UK at least 10-11 times per year... I'm convinced that the pricing formula is simply: take US retail price and substitute with GBP currency symbol. It seems to be nearly universal... at least in the UK.

Hi

I'll go along with that! Take a simple thing like a Burger meal... it will be pounds in the UK that would be the same number dollars in the USA.

Also, one thing I noticed re computing, is that software is horrendously more expensive in the UK compared to the USA... especially Microsoft programs like Works upon which I based that.

Plus the difference in the price of gas/petrol.

Of course, the high tax on such products presumably goes towards the Health schemes in Europe that are not available in the USA.

[theother]

Originally Posted by hrn

"The largest reason right now is the weak dollar."

US importers have to pay the prices in Europe before selling it...often to Europe...

Exaclty. US gear is only cheap because of the weak $. The $ is lower than every before in history.

[Fletcher]

Originally Posted by Andraes

Likewise Apple considers EU as 'a jungle' retailers have less then 8% profit on selling an Apple

It's the same margin in the US... which is why you'll find that Apple product is priced within a dollar from store to store, vendor to vendor... yet Apple has great big "Apple stores" in most of the malls... wonder if those stores are trying to live on 8%?

The only reason to be an Apple dealer is that it helps bring people in to purchase the "peripherals" which is where you can turn a dime and continue to pay your staff... if you had to try to do it on Apple product alone... you'd been in deep, deep kaka.

As for "the little people" paying the majority of the taxes, etc.... yeah, they do. The little employers pay a rather hefty part of the little employees taxes and then the little employees get whacked again [VAT, etc.] so their wages have to allow for their being taxes up the ying while still being able to provide food and shelter for the families... which all means higher expenses for the employers... which are paid for by the little employees when they consume.

Stop consuming and the whole house of cards falls down... keep consuming goods from the US and our house of cards stays uprights... though US "consumer confidence" is at something of an all time low in the last 40 something years which again makes it harder for guys like us who when the rubber meets the road provide "luxury items" [as in not food, not fuel, not clothing].

[Andraes]

Fletcher, Is this the 'Esprit' with wich you are going to revive and rebuild your economy?
Once GW is out and you have KingII you should be up in no time.
BTW By sharing lovingly you'll gain more buckzzz.

[Ruphus]

Among the reasons there must also be the one that industry is figuring how US consumers just won´t follow the pricing anymore.
( Aside of some of boutique products, partly aquired by consumers who mustn´t care about a couple thousand $ too much.)

It appears as if consumers in the US before irrational prices have come to just leave it be or switch their choice to lesser priced competing products, to which the internet and its option of researching on user comments and best price might certainly help.

I am reading that the middle-class dream of the rich ~ 50ies to 80ies-period is degenerating towards the rather humble circumstances of the times before that.

And the US-citizens are right with becoming cautious about the future and with tightening their wallets.

While the US-policies have been actively initial and number one in the world with proclaiming "free trade" and globalisation, that very thing is coming back and biting average Joe in the butt.

These days, unexpected as it has been, 63% of the democrats and even 55% of the republicans are of the opinion that globalisation is being detrimental to their country.
Americans today share being the biggest anti-globalisation stand world wide together with the French people.

Only that Bush is still pathing this kind of economy, currently even negotiating with Panama and Columbia for even more "free trade".

The problem as with all economical fundamentals has to do with the bluring agenda of covering the obvious fact of a caste society.
Karl Marx ( whoooo!! ) was not out of his mind at all when he described the deviding classes of our societies. Their existence is economical and practical entity, notwithstanding how much the privileged fractions dislike that fact to be brought into discussion and how succesfully they have made people overlooking that significant notch.

When Bush and the four Hundred behind him are still of the opinion that globalisation was a wonderful phenomenon to wittness and expand, then that is the truth. For them and their directing staff ( 28% still stick to the claim that globalisation was of benefit.)

Because globalisation is indeed being very productive for the upper class. For them it means shoving production or just head quarters around the globe, just to where taxes and wages are being lowest. Enabling by-pass of investments with ( formally ) going abroad and creaming off at home multiple times as much than before.

For the middle and lower class however globalisation means something completely else. For them it comes in as something exciting at first, but after the 3-bucks-T-shirst coming in the consequence.
Unemployment, cuts on working rights, on salaries and on social insurance.

All the while the industry and their slick opinion makers from economical faculties - that in fact are purely ideological and as much scientifical as theology - proclaim that limiting peoples´ rights and cutting down on salaries was to be healthy for general economy and indespensible for economical future.

This again is true.
For their own economizing.

For the people however it means heading back to the economical state of pre- WWII times.

The infantry people are seing their actual outcome.
It means, despite of the past five years of economical boom, the US states bureau of statistics reporting that the real wages are being lower than in 1999.
It means that the once well-payed industrial jobs are being on decline while what comes in exchange being lowly paid working places as packers, deliverers and assistants of all kinds.
It means outsourcing to free-trade regions like "Parque Industrial Río Bravo" in Mexico ( Bush senior´s introduction sealed by Bill Clinton ) where Bombardier, Hewlett-Packard, General Motors and Toshiba are paying introductionary salaries of 8,00 USD.
Per day, not per hour.
... and then selling the products on the US market.


And even those free-trade refugees of Mexico and Canada are about to being dropped now, as the Chinese Jangtze Delta is restlessly expanding into high-tech branches of software, pharmaceuticals and bio-tech that will be delivering even cheaper on everyones´ecological costs, to be paid a while later.

It means that 47 million of 300 million US citizens are now being without medical insurance, in a country that must be top with medical usury billings world wide.
( Hippocrates ought to be twisting in his grave for a couple decades by now.)
Tendency rising.

It means that supposedly 40 million jobs are to be lost yet within the next 10 to 20 years ( provided there was anyone around still to care at all, in twenty years ).

It means that the USA meanwhile has become the most in-debt country in the world.

It means that the US population is now hoping for release through some Barack Obama or Hillary Clinton in the future office. Hoped by minds who naively believe that president Carter or even Kennedy had been philanthropical pals.

But within the given regime there couldn´t ever be any authentically leading personality allowed to climb the platform and aim for a really democratic US society.

In a country where 70% of all possession is being hold by 10% of the population, let alone the percentage hold by the 5%, lesser even the ownership of the 0,001%, any personality shifted into the white house within the existing industrial system will traditionally be an order-receiving puppet on a leash by default. Notwithstanding the peripheral contributions the person "in power" might be granted to donate for his people-friendly image, there will never be a true human introduction.

Because, as someone expressed it a while ago before the German press: "Rather could you expect a dog to save on a storage of sausages." While the quoted person addressed the other way around, I´m using his analogy for the societal class behind presidents of about any state in the world.

Now, that the people in the US are facing economical reality, apparent with their refuse to accept over-the-top pricing, there could be a chance for them to also realize the existence of caste and the necessity to inquire for a regency of their own.

But will a long since extincted political consciousness return?
Will there at some time be authentic regency, unions; a new Arlo Guthry?

After all that refined brainwash meanwhile ...
Chances within a reasonable time frame for analytical thinking and causal inquiries among the four Hundred´s ants and victims are small.

Ruphus

PS:
Price gauging in the EU will have to slow down as the boom is only rise for the upper class.
If they don´t there will be riots and civil wars.

There are first signs on the horizon already in a way ressembling the ones before 1933.

And to those who think me pessimistic: I remember how it was answered when I was mentioning a coming burst of the US real estate bubble some time ago.

[Crowley]

That dog and sausage analogy is superb! And he IS right about the addiction to cheap items.

"Good enough" is fine for the average Joe, even if he does get his "buttbitten". LOL

The dollar is weak and that means now is a good time to buy things that are made in the US. 335s should be undercutting Verithins about now.

Bob


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[Andraes]

Genelec states today that they are charging as much per unit for their smallest and teir biggest distributor. 'We are an ethical company' they said. So Genelec can be used for price comparisons NOT caused by bulk-discount.

[Ruphus]

Originally Posted by Andraes

Genelec states today that they are charging as much per unit for their smallest and teir biggest distributor. 'We are an ethical company' they said. So Genelec can be used for price comparisons NOT caused by bulk-discount.

thumbsup thumbsup
Fantastic!!

From what I can recall this is the first time that I hear of the term "ethics" being mentioned on business methods on an official statement within industry.
( Commonly everything is being made up to sound as if: "It costs what it costs", totally fading out what kind of slices actually are being cut. And main stream simply agreed to think no further, no matter how absurd goods-to-price ratio ends up.)

Could there be slipping taboos and rising sense on the way?
Jeez, it would be so freaking exciting to see.

( Really, meant without the slightest irony. )


Ruphus

[FULL-DUPLEX]

I have saved more than 1.500 EUR on a Motif XS 7 imported from the best country in the world the USA...