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

[ISedlacek]

(I already mentioned it in the Schoeps thread in the Remote Forum, but I think this topic maybe deserves a separate thread):

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I am really perplexed by the fact that lot of high end pro audio products made in EU is often 20-50% more expensive in the country of origin than in the US (in spite of the high shipping cost). The special pro audio exchange rate is usually 1EUR = 1 dollar .. As in most of the banks, right ?.

Applies even for software. Like Samplitude for example : 1000 USD in the US and 1000 EUR in Germany (made in Berlin) = 50% more. And it is similar for so many other examples ...

A bit strange policy it seems - if it can be so cheap in the US (and the manufacters are obviously OK to get less money from the US distributor), why not in Europe ? Why to exploit fellow Europeans more ? Is the US some underdeveloped country where the poor citizens need to be supported by this kind of subventions to be able to afford the products ? I don´t think so. It is beyond logic that a product made in your town is 50% more expensive than across the ocean.

On the other hand - the pro audio products made in the US are always at least 50% more expensive in EU.

So one can just keep singing the well-known tune:

"I like to be in America!
Okay by me in America!
Everything free in America
For a small fee in America"



Actually , for some more expensive EU made audio product, you can just make a trip to the US buy it there and return. ANd you will still not pay that much (including the fly ticket) than if you buy it round the corner. To order it from US is cheaper in any case ...

A small example from Schoeps:
MK4 - Posthorn (USA)- 648 dollars = 440 EUR. Thomann (Germany) 698 EUR = 1026 dollars

So, let us sing the song again

It would be interesting to hear your thoughts on this ...

[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. Some US manufacturers have a "non outside-US shipping policy" (meaning you should buy it from your local dealer), but you always find some US dealers open for business... With the low dollar, it's very interesting right now!

[Audio Hombre]

capitalism is > than socialism.bottom line.

[ISedlacek]

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. Some US manufacturers have a "non outside-US shipping policy" (meaning you should buy it from your local dealer), but you always find some US dealers open for business... With the low dollar, it's very interesting right now!

Yes, exactly ... but if more people start doing the same thing (very naturally), it will hopefully lead to decreasing the prices in EU, otherwise very few people will keep buying there ... if there can buy the same for much lower price somewhere else

[Drayon]

+ 17.5- 20% VAT doesnt help in EU

[bigo]

Don’t forget that the European prices include VAT, which you don’t have to pay if you have a European VAT number…
If you buy from the states, you have to pay the VAT of your country plus the import taxes.

[Fletcher]

There is also the cost of a vendor employing people in the EU which is like triple what it costs to employ someone in the US.

When you hire someone in the EU it's like you're joined at the hip for life... the health benefits are greater, the retirement benefits are greater, the overall wages are generally higher [and so is the cost of living... so that sorta evens out... like the price for fuel is about 4 times higher than in the US in spite of the ridiculous fuel price inflation since the introduction of Jerk George II].

All of these kinds of costs make the overhead of running a business [retail] in the EU way higher than the cost of running a business in the US... which means that the distributors costs are higher and the retailers costs are higher, etc., etc., etc. on down the road.

Now I'm not sure this is the reason but it's the reason that kept M-A from opening shops across the EU so far... taxes and employee benefits from hell [like benefits I don't get as an owner at M-A would have to be paid to the lowest rung of EU employee kinda stuff].

[ISedlacek]

Originally Posted by bigo

Don’t forget that the European prices include VAT, which you don’t have to pay if you have a European VAT number…
If you buy from the states, you have to pay the VAT of your country plus the import taxes.

VAT does not help. Just a random example: Horch RM2J microphone - in the country of origin (Germany) in the Thomann store (one of the cheapest): 4100 EUR excl. VAT (= cca 6050 dollars). Mercenary:5000 dollars = 3400 EUR. The postage from the US can cost 60-200 dollars (depending on a carrier). So where would you buy it ?

[jbjoubaud]

Originally Posted by Audio Hombre

capitalism is > than socialism.bottom line.

[chetatkinsdiet]

This could turn into a political discussion easily as all of the things Fletcher says definitely add to the cost. So, it's easy to come up with 50% increase when you've got:

20% VAT
also the increases in employee costs for things like the benefits UE citizens have like their guaranteed health care, summer 6 week holidays, etc.

m

[ISedlacek]

Originally Posted by chetatkinsdiet

This could turn into a political discussion easily as all of the things Fletcher says definitely add to the cost. So, it's easy to come up with 50% increase when you've got:

20% VAT

Let us forget about VAT ...

[Fletcher]

Originally Posted by chetatkinsdiet

summer 6 week holidays, etc.

I took a total of 11 days of vacation last year [complete vacation... no laptop, no cell phone... just peace and quiet]... 6 weeks of vacation? I'd probably shoot myself with that much downtime to just think!!!

Everyone at M-A starts with 3 days vacation, 3 days sick, and 2 days personal... after a year or so you get a week paid vacation, 3 days sick and 2 days personal... after a while you can take a couple weeks if you want [but nobody seems to want... then again we drink more at work than we get to on vacation ].

[chetatkinsdiet]

OK...even taking VAT out of the equation, you still have the various costs of running a business that are more expensive in EU than US. Also, could it also be that EU in general is much less overrun with the big box retailers? More mom & pop shops equal more margin for the shops and higher prices for the general public. That's the way it was here in the states when I was growing up. You were expected to pay full retail or close to it for new items.

Maybe it's time for Guitar Center to expand over there.

m

[chetatkinsdiet]

Originally Posted by Fletcher

I took a total of 11 days of vacation last year [complete vacation... no laptop, no cell phone... just peace and quiet]... 6 weeks of vacation? I'd probably shoot myself with that much downtime to just think!!!

Everyone at M-A starts with 3 days vacation, 3 days sick, and 2 days personal... after a year or so you get a week paid vacation, 3 days sick and 2 days personal... after a while you can take a couple weeks if you want [but nobody seems to want... then again we drink more at work than we get to on vacation ].

Haha...so true. I have so much built up at my job, they're making me take it this year. i'm on a "burn down" schedule. I've got to take 8 weeks this year. What the hell would I do with 8 weeks off. Oh well...

m

[ALL*MYTEE]

The largest reason right now is the weak dollar. The Euro goes a long way right now. That's probably half the difference. Take a trip and come shopping.

The other half is likely higher taxes and tariffs to pay for the universal health care, generous maternity leave, pensions, month-long vacations and other benefits and customs that you all have that we don't (or go without).

I tried to buy a pair of boots from Germany. They were Red Wing so made in the US, but not sold here. With shipping they were something like $450. I ended up getting a very similar pair by the same maker in a different finish here in the US for $200. With a coupon for free shipping. There is something hugely affecting the price there. The actual costs of shipping them there in bulk can't be more than $5 a pair and the actual shipping costs coming back couldn't be more than $50 on the outside. That leaves almost an extra 100% added to the costs. Accounting for the weak dollar it's likely still 30-50% higher in the EU.

[heathen]

Australian prices were very similar until recently, some places are still trying to charge 3-4 x the price in the USA, I've had some great bargains buying straight from the US.

Anything under $1000 is gst exempt in Aus when buying from the USA due to our free trade agreement, not good for small Aussie businesses, but great for customers.

Though there are some manufactures who refuse to let thier products be sold by dealers outside the country they operate in. Which is frustrating but.... understandable as they are trying to look after thier dealers.

So yeah I feel for you guys in Europe as the prices there are even more than here which is a bit daunting when purchasing gear.

[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...

[heathen]

Originally Posted by Fletcher

I took a total of 11 days of vacation last year [complete vacation... no laptop, no cell phone... just peace and quiet]... 6 weeks of vacation? I'd probably shoot myself with that much downtime to just think!!!

Everyone at M-A starts with 3 days vacation, 3 days sick, and 2 days personal... after a year or so you get a week paid vacation, 3 days sick and 2 days personal... after a while you can take a couple weeks if you want [but nobody seems to want... then again we drink more at work than we get to on vacation ].

3 days vacation, thats not a vacation thats a long weekend, our ex-government tried to bring in the American work schedule here, did'nt work at all as he was voted out at the next election.

6 weeks Fletcher, sounds like you need a biking holiday around Australia. You won't be able to shoot yerself as they don't let you carry guns here, .

After drinking enough though I guess you would forget you were even at work.

[nasopenev]

Hey, the product from the EU factory is out, let's say, 1000$. It's the same for US, EU and AUS and so on. When the shop is in US it have to pay some import taxes(i believe) than the surplus charge. And the final price is about 1800$. The same product in EU finishes at 1700eu and god knows how much in Australia. Thats the case with the Drawmer 1968, I believe. The question is: where the difference go and why. And please, don't mention the health care, wages, insurance etc. the diff is no more than 10-12%. If I'm wrong, prove me.

P.S. Why some of the manifacturers are not commenting.

P.S.S. Excuse my english

[Fletcher]

Originally Posted by heathen

6 weeks Fletcher, sounds like you need a biking holiday around Australia. You won't be able to shoot yerself as they don't let you carry guns here, .

Longest gig I did in Sydney was about 10-12 days when I was there to buy 6 or 7 desks from the ABC and two of the 8078's from 301... it was great!!

Worked 1/2 days [8 hours] and had 2 days off in the middle when I hired an HD FXLR "Low Rider" from Frasier's in Homebush... then rode out of the city a day, found a little town, got shitfaced with the locals then rode back to the city. The funniest part was when nobody batted an eye when I rode that sucker into the lobby of the Sebel [possibly the most unfortunate cultural loss to one of my favorite cities on the planet].

As for getting guns in Sydney... not a problem... like anything else a man like me could ever want they're available in "the cross" for a price.

After drinking enough though I guess you would forget you were even at work.

We hang, we jam, we play with gear, we drink, we have lots of fun... then we go home... often it's more fun to be at work!!

I realize this has nothing to do with the price of a Horch in the EU... but it helps us to rationalize why we don't do "August off".

[scking]

Originally Posted by nasopenev

The question is: where the difference go and why. And please, don't mention the health care, wages, insurance etc. the diff is no more than 10-12%. If I'm wrong, prove me.

10-12% EACH. It adds up.

[Plush]

Another reason is that there is more competition in the USA.

In the USA, it's good to be a "volume dealer."

That means that a lot of dealers blow it out their backside. They're box stores that make a little profit. In the EU, the dealer wants to make an actual real living wage profit. (much more)

[Animus]

Originally Posted by Fletcher

I took a total of 11 days of vacation last year [complete vacation... no laptop, no cell phone... just peace and quiet]... 6 weeks of vacation? I'd probably shoot myself with that much downtime to just think!!!

Everyone at M-A starts with 3 days vacation, 3 days sick, and 2 days personal... after a year or so you get a week paid vacation, 3 days sick and 2 days personal... after a while you can take a couple weeks if you want [but nobody seems to want... then again we drink more at work than we get to on vacation ].

uugh I should feel lucky then. I am in the US and I get 5 weeks of "paid time off" as we call it. In another 2 years that will bump up to 6 weeks.

I still think America needs to adopt the work schedule of Europe and other countries. We work way too much. We need another workers reform (early 19th century?). Before the last reform Americans worked 12 hour days 6 days a week, if I remember right.

[mikeg]

How does one get back to 12 hour days, 6 days a week? I can't remember when that happened. Even when I get a day off it's; a sick kid, repair man coming to the house, etc.

Our we assuming that the wholesale price the dealers are paying is the same for both the USA and the EU? Is there any reason why the wholesale price would be different?

[Animus]

Originally Posted by B.Santillan

You mean that's not normal? until december of '07 I was only getting about 1 day off a month. 1 day a week is all you really need. 2 days is a vacation.

Granted but are you self employed? Average work hours for an American working for a company/corporation is 8 hour days 5 days a week, with 2 weeks vacation.

If I was working for myself I wouldn't mind putting the hours in. I am actually thinking about going freelance with what I do in my dayjob which can fetch upwards of $***/hr. It's all a matter of incentive and perspective I guess. Would I work 12 hour + days, 6 days a week in my current job? Hell no.

[Rossco]

Mikeg, excellent question re. the wholesale price to US and Euro companies i.e. the Horch mic example.

Any importers/dealers care to anonymously chime in?

[Flying_Dutchman]

Originally Posted by ISedlacek

VAT does not help. Just a random example: Horch RM2J microphone - in the country of origin (Germany) in the Thomann store (one of the cheapest): 4100 EUR excl. VAT (= cca 6050 dollars). Mercenary:5000 dollars = 3400 EUR. The postage from the US can cost 60-200 dollars (depending on a carrier). So where would you buy it ?

5000 US Dollars + 269 shipping + 20 bank transfer (or paypal, but they give you less dollars, compared to a normal bank)= 5289
/ 1,46 = 3622 euros
duane 4% 3767 euros
19% tax 4483Euros including everything
Thomann 4879euros including everything

395 more buying from germany.

where does it come from?
in the most cases i know, i worked at a large music instrument retailer a while, its caused by the high price the german retailer has to pay. In a normal situation its manufacturer - distribution (which is often x1,5) - retailer (1,3 ... hard times).
I dont know where the us retailers buy it, maybe direct?
The strange thing for me is that a US retailer gets less euros for dollars than the other way round, so its still strange. Maybe high class audio gear is more sold in the us market, so they get better prices.

BTW,
if your unit has to be repaired it can get pain in the axx.

[warhead]

I definitely sympathize with Fletcher on the whole no time away from emails and cell phone deal. I took decent time off last year (maybe a little over half what is mandatory in Europe!) but from what I can remember every single day of it I was subject to email and phone calls so...sucks to never really get a true break. Even if the phone doesn't ring, it's like you're waiting for it to.

As business owners though I bet it's the same in Europe. Maybe the employees get 6 weeks off, but the owner works almost every day without fail.

War

[dubrichie]

well in ireland i work a 9:00-5:30, 5 days a week and get 20 days holidays a year.

realistically, at least 3 out of 5 days a week i work til about 7pm, average.

this is the norm.

what the hell is this "6 weeks holidays" shenanigans?!

gimme!

[mmcfarlane]

I suspect part of the price difference is just 'what the market will bear'. I suspect a part of it is volume discounts for the big internet houses. Some companies just don't understand volume pricing. The US suppliers and the consumers have gotten this concept down pat over the past 30 years. Every big reseller CEO gets compared to Wallmart and Dell - supply chain management, volume, minimized inventory,...