Rip off Britain

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Can any one tell me why the cost of praticly anything cost more in the UK, then in the USA?

Even products manufactured in the UK, cost more than in the USA.
 

Gerrardasnails

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firewire:
Can any one tell me why the cost of praticly anything cost more in the UK, then in the USA?

Even products manufactured in the UK, cost more than in the USA.

Go and read the Mail on Sunday!
 

Clare Newsome

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The most obvious answer is economies of scale- the US is a much, much larger market, which means companies can manufacture/distribute/sell in larger quantities and significantly reduce their unit costs, which get passed onto the customer.
 

Andrew Everard

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Well, there's VAT for a start, which at 15% is more than double the highest rate of sales tax in the States...

Then there are distribution costs and other retail overheads, which tend to be lower in the States than here, and due to the size of the market distributor/retailer margins tend to be lower there, too...

Nice Daily Mail headline on your post, though...

EDIT: Bother! Beaten to it by both The Boss and M. Escargot...
 
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Anonymous

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Some of the above is true, but the biggest reason is that we areÿwillingÿto pay the higher prices.ÿ
 

Andrew Everard

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mjtoal:Some of the above is true, but the biggest reason is that we are willing to pay the higher prices.

Golly, the MoS must be a bit thin today if everyone's finished it already...
 
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Anonymous

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Not a MoS reader -ÿappallingÿrag which I wouldn't use to wrap chips.ÿ

Basic economics - you can see its happening on any High Street any day this week - if people don't buy, prices come down (generally speaking).ÿ

Did Yamaha reduce the prices of their AV amps and soundbars out of the generosity of their hearts?ÿ
 

Andrew Everard

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Any day now the major Japanese companies will have to increase their prices, due to the strength of the yen against virtually every currency. I suspect there'll be howls of protest then, too - but what choice do they have?

And the Yamaha thing? I think it's called gaining a competitive advantage - the products were more or less newly launched, so it wasn't as if they were hanging around on the shelves...
 
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Anonymous

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Andrew Everard:
Any day now the major Japanese companies will have to increase their prices, due to the strength of the yen against virtually every currency. I suspect there'll be howls of protest then, too - but what choice do they have?

And the Yamaha thing? I think it's called gaining a competitive advantage - the products were more or less newly launched, so it wasn't as if they were hanging around on the shelves...

Maybe so, but the US consumer demands, and usually gets, better value for many goods and services.
 

Andrew Everard

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mjtoal:Maybe so, but the US consumer demands, and usually gets, better value for many goods and services.

So we're actually ripping ourselves off, not being ripped off...
 

Andy Clough

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All that being so, if you've been following our 'Hot Deal' stories over the Christmas/New Year holiday, there are some fantastic bargains to be had in the sales at the moment. Nothing like a recession to focus retailers' minds on what the consumer wants/will pay.

But Andrew makes a good point. With the weakness of the £ against most other currencies, New Year price rises are inevitable. It will be interesting to see if they stick.
 

Andrew Everard

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nads:Mmm the UK is Damn cheap. spent about 1k in the last week or so and saved about the same.

The weakness of the pound is making shopping in the UK attractive to many people - ask all those Irish shoppers who have been crossing the border into the North to do their weekly shop.
 
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Anonymous

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Andrew Everard:
nads:Mmm the UK is Damn cheap. spent aboutÿ 1k in the last week or so and saved about the same.

The weakness of the pound is making shopping in the UK attractive to many people - ask all those Irish shoppers who have been crossing the border into the North to do their weekly shop.

ÿ

I read recently that Asda in Enniskillen - not a big town, never mind a city, but near the border with the ROI - is the 6thÿbiggestÿgrossing store in the global WalMart empire. That is pretty amazing. It will all stop if the exchange rates start separating again.
 
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Anonymous

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It's not a rip off - it's a matter of supply and demand.

Any manufacturer who wants to succeed in any market needs to price their goods or services according to what the market believes they are worth. In some markets it means selling at a lower margin, in others they may be able to charge more.

The US is a larger and more competitive market, more outlets, more competitors - it all drives the price level down.

The same is true inside the UK as well. Products that are enjoying a higher esteem in the market can be sold at a higher margin (because we're willing to pay more for what we believe is a better product). Cheap and cheerful "me too" products are sold at a lower margin since they are considered to be commodities.

Matt E.
 
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Anonymous

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IF you think the UK is a rip off, try shopping in the Rep Of Ireland, some of the prices we are asked to pay here are crazy, be it AV equipment,speakers,sky tv subscriptions, even "What Hi Fi" subscriptions (13 issues for £69.00), etc You don't know how lucky you are in the uk.
 
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Anonymous

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I think the recent depreciation of the pound has made AV stuff in the UK much more competitive... don't know how long it will last though. I would definitely not say that it is a rip off at all. In fact, it's rather cheap when compared to many other markets currently.
 
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Anonymous

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Trust me when I say that you guys have got it pretty good. Here in Australia we're still reaping the benefits (sic.) of low population hence low volume and a massive geographical shipping nightmare to deal with (+/-1,000kms between most capital cities).

Add that to the fact that most of the less mass-market brands such as, well just about all the big HiFi brands with the exception of perhaps Sony, Panasonic, Pioneer, LG; are handled by distributors or agents. Some distributors are smart enough to know that HiFi people often spend a lot of time either reading overseas publications such as WHF or reading about stuff on the internet; and keep their prices reasonably close to o/s pricing. Others are somewhat out of touch leading to horrendous price inconsistency.

This situation has driven me (and a lot of others) well away from Denon for one example, who's distributors are renowned over here for their shameless price gouging. To give you a real-world example, in the UK you can buy a Denon AVC-A1HD for £3800 (I'm going on the last high-end guide here) and the Yamaha Z11 or Pioneer LX90 for £5000 - right?

OK, so in Australia - the 'lucky' country, we get to pay (at retail anyway) the same price of A$12,999 across the board for all three amps - what this makes for with current exchange rates is that the Pioneer and Yamaha are pretty much on par with UK prices whereas the Denon carries a price premium of approx. 30%. Don't even ask what the Denon pre/power goes for - its laughable and I'm told that as of January 1, all Denon prices were going up by another 25%!

For another example, after reading reviews etc a year or so back I set my heart on the Cyrus CD6 but ended up with a Cambridge Audio Azur 740C as the CD6 carried a price premium of well over double the UK price - at the time A$3,500 (or £1722 to you). I believe this distributor has recently seen sense and Cyrus gear can now be had for a more palatable price.

Many people I know head to Singapore for their gear as generally the kit and the flight cost is less than buying the equipment here - though then we have the issue of warranty etc.

Another factor is that we only pay 10% GST (read VAT) here too so there's another 7.5% we should theoretically be paying less of.

There's a lot to be said for 61 million people living on a small island vs. 21 million living in a country the size of the US. At least you've got a reasonable degree of competition going for you.
 

Andrew Everard

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seakingadvice:I think the recent depreciation of the pound has made AV stuff in the UK much more competitive... don't know how long it will last though. I would definitely not say that it is a rip off at all. In fact, it's rather cheap when compared to many other markets currently.

If anything, the recent plummet in the value of the pound against the US Dollar, the Euro and the Yen should have made prices higher. In fact it's only against the Korean Won that it's really holding up at all well, but then that's more down to the weakness of the Won than anything the Pound is doing right.
 
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Anonymous

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Andrew Everard:
seakingadvice:I think the recent depreciation of the pound has made AV stuff in the UK much more competitive... don't know how long it will last though. I would definitely not say that it is a rip off at all. In fact, it's rather cheap when compared to many other markets currently.

If anything, the recent plummet in the value of the pound against the US Dollar, the Euro and the Yen should have made prices higher. In fact it's only against the Korean Won that it's really holding up at all well, but then that's more down to the weakness of the Won than anything the Pound is doing right.

I think given the unstable state of the economy and fluctuating exchanges rates, maybe some manufacturers are adopting a wait and see approach before they make any adjustments to pricing due to exchange rates. It would be interesting to analyse where all these products from the different manufacturers are manufactured to see how the exchange rates have impacted their bottom lines.

I was told that the Denon models like the 3808 and above are manufactured in Japan while the cheaper models are from China. Yamaha is supposedly manufactured in Malaysia. Don't know whether this information is correct though.
 

Andrew Everard

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I think most companies are hanging on for grim death rather than making the price increases the current exchange rates are screaming at them are required.
 

Clare Newsome

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seakingadvice:
It would be interesting to analyse where all these products from the different manufacturers are manufactured to see how the exchange rates have impacted their bottom lines.

I was told that the Denon models like the 3808 and above are manufactured in Japan while the cheaper models are from China. Yamaha is supposedly manufactured in Malaysia. Don't know whether this information is correct though.

That has less effect than you'd think - most component prices (whether it's made in China, Japan, Malaysia etc) are in US Dollars. With the dollar currently stronger against many currencies than it has been for a while, it makes the cost of manufacturing higher for a wide range of companies (UK firms included).
 
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Anonymous

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seakingadvice:

I was told that the Denon models like the 3808 and above are manufactured in Japan while the cheaper models are from China.

Probably more to do with volume per per product than cost / quality. It's not really cheaper to manufacture in China than Japan unless the quantities are fairly large and stable.

Components (including those from "western" manufacturers) are about 40% less expensive to source for a contract manufacturer in China than in mainland Europe. The component manufacturers work on lower margins towards the Chinese manufacturers. The amount of manual labor as a percentage of the total manufacturing costs isn't that high for something like a receiver or DVD player.

FYI - Apple manufactures just about everything in China.

Matt E.
 

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