Mark-ups for Europe?

[DrumIntoTheNight]

I've been shopping around for gear recently (more specifically, a Powerglide double) and some of the price comparisions I've seen have been staggering. The 'average' retail price I saw in the UK was £289, with the lowest being £225. But from several American sites, I found the same model at $269. That's less than half of what a UK-er would pay. That's insane.

This is hardly an isolated case; almost all gear is cheaper in the US. And I know for a fact that the Australians have it worse than us Europeans. So why is this? Do companies choose to mark-up prices for overseas markets? Or are they covering extra costs involved with distribution? Or is it a case of extra taxation in the EU?

Any thoughts? Or do I just not understand business :p

[AG]

This is standard business. Unfortunately.

I was on holiday in the US recently and picked up an SPD-S and stand for $510.

Which is ridiculously cheaper than over here.

[maniac0796]

Shipping costs.

It's a shorter journey between china and American, then it is to go all around the horn of Africa, or up from the Suez, and through the Mediterranean.

Also, there aren't as many big chain stores in Europe, which means the price stays high, because they can't buy in bulk.

Thomann.de do IC's for about £250 with free shipping, project music do em for about £270, with £5 shipping online.

[Aaron]

Come to Australia... if you want to cry yourself to sleep.

[Ellx]

haha....:(

[Undisco Kidd]

Agops cost more in the US than Europe.

:(

[maniac0796]

Yup, because they're made in Istanbul.

[raz0r]

Tax is another big issue.
Most prices on US sites are quoted excluding sales tax.
Us europeans have another 19% on top of that price. (For Germany and here)

[Ollie The Drumming Legend]

I've been shopping around for gear recently (more specifically, a Powerglide double) and some of the price comparisions I've seen have been staggering. The 'average' retail price I saw in the UK was £289, with the lowest being £225. But from several American sites, I found the same model at $269. That's less than half of what a UK-er would pay. That's insane.

This is hardly an isolated case; almost all gear is cheaper in the US. And I know for a fact that the Australians have it worse than us Europeans. So why is this? Do companies choose to mark-up prices for overseas markets? Or are they covering extra costs involved with distribution? Or is it a case of extra taxation in the EU?

Well, there are several possibilities here, and I think the true answer is all of them together.

First is that foreign currency exchange rates are not reflective of the real prices in a country, i.e. how much stuff actually costs, and hence how much the money is actually worse; for example, according to exchange rates (I think) the cost of living in the US is less than in Europe, but in terms of how much people earn there it is not, or at least not by so much.

The next is a very strong pound and euro compared to the US dollar, which means that the exchange rate makes stuff in America far cheaper than it is in the UK, or for Americans to buy in their own country for that matter. Strong currency = cheap to import, expensive to export. Or is it weak? Either way, we have it at the moment, apparently.

Taxation. Taxes are generally higher in Europe, but not by so much that the price is rediculously higher here; it is a factor, but ultimately a relatively minor one. e.g. a cymbal that is £150 including VAT at 17.5% would be £127.66 without VAT. Now, I do not know what the tax on it would be in the USA, but even if we were to remove all tax on the cymbal it would still be radically more 'expensive' than buying from the USA.

Extra mark-up: If cymbals are produced and distributed globally, which they are, then, exluding shipping and taxes, it costs the same to make them no matter where you are (for example, all Sabian cymbals are made in a factory in Canada, as far as I know). By looking at the 'real' price of goods in a country, the company making drum gear (e.g. cymbals) will be able to determine the price of their cymbals according to what people will pay, i.e. what their market value should be, and all companies will seek to maximise their profits by striking a balance between number of sales and price of item (cheaper = more afford it but pay less each time, etc. - with cymbals that one does not need to buy as often as, e.g. bread, the profit margin must be higher per sale). This will be different in different countries; this difference is then extended (or diminished in some cases, but not this one) by the foreign currency markets so that not only do good appear to be cheaper in the USA than the UK (and 'actually' are for importing), but as goods cost roughly the same for any location this also increases the profit margins in Europe as they charge as much as the market will stand and they need to cover higher overheads in those countries (tax, higher wages[due to exchange rates largely], etc).

I think. :)