... to keep this simple, and I do understand import / export 'theories' to a certain extent, but WHY does software from Germany (closer to the UK than the US) cost more? Surely an order could be placed direct from NI and they will ship it, at cost, to wherever the destination need be. Wouldn't that be simpler, fairer and better for the customer, cutting out the middle man who seems to be causing the 'price war' problems?

NI seem extremely firm with their prices online, yet distributers, suppliers and stores of NI products vary their prices depending location. I don't understand the economics of this.

If this shipping lark, $ v £ v Yen stuff, etc is all true, how come I can purchase EWQLSO for the same price, wherever my location and delivered to my door? After all, it's just like Komplete, i.e. software bundled in a box.

Cheers,
Peter

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Composer, Producer, Sound Designer
www.universal-sound-design.com

Quote markhodges:

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That example is a bit distorted because the sweetwater price excludes sales taxes .....

---

One also has to factor in the stranglehold that the major US franchises have over manufacturers and their ability to dictate US prices and negotiate bulk discounts due to the sheer size of the market and their ordering power. Basically, the buyers at these big franchises deliver an ultimatum along the lines of "We like the product but don't want to sell it at that price. If we can sell it at $xxx, we'll order x00 pieces otherwise forget it"! What's a manufacturer to do? These franchises own the market and if a manufacturer can't get product placement at them, they may as well forget it and kiss that product goodbye even on the global stage. And if the likes of GC are seen not be carrying a particular product, sure as hell the others won't touch it either (and there's no money to be made from the smaller 'mom and pop' stores there either). And that has knock-on effects into other market areas as well. So the manufacturers' hands are tied! Sometimes, other market areas benefit if the manufacturer decides to apply that new pricing to the world market but not always.

And if the manufacturer does apply that new price point worldwide, this can affect - say - UK dealers because the margins are so low, it's hardly worth handling the thing ... getting staff trained, holding and storing stock, advertising, occupying shop floor space (as well as dealing with faults, repairs, returns, enquiries) and so on for a small %% markup.

It really isn't as simple as "It's $xxx in the US therefore it should be the same price everywhere" and whilst it's possible to Google the best price and order from anywhere (notwithstanding shipping, p&p, duties, taxes, mains voltages and plugs, documentation, etc.), what's to be done if there's a fault or some other problem? And what if a product needs an approved dealer to fit some accessory - should your local dealer do that when you ordered it from Idaho or Taipei (assuming your local dealer still exists)? Or do you do it yourself? If so, what happens if you screw it? Who sorts that out?

There is so much about this 'globalised' business model that just doesn't work on a practical level.

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Website / Music Lab Machines / Blog

I agree with everyone. Especially OVU. And I guess if you're in the market for say a Cadac desk you're going to get service, one way or another.

I'm simply pointing out that what a lot of people see as the ideal - namely continuing with the status quo model - is unsustainable. The "dumbing down" of so-called pro audio started with its democratisation into something anyone could do in their bedrooms (and hooray for that).

Professionals learn to live with the fact that "boxes" may just need to be swapped out. If say the studio computer goes down I've got another ready to slot in. If my AD converters go, I've got another 24 channnels on the shelf. And so on. Even if my mixer goes down, I can record 18 or 20 mics direct into the computer through decent pre-amps. And I could do a mixdown in the box with help from a Mackie Universal Control. Everything I do is built on the possibility that I might have to live without something - anything - in a real life crisis, and still get the job done. And I'm sure a true professional like OVU does exactly the same.

If I really want to try something out before I buy (and I do, sometimes) I'll go to a mate's studio where that "box" exists - not a shop. Or a client engineer/producer has brought something into the studio and impressed me. Or I'll listen to Max, who's heard pretty much everything, and who supports my studio on a professional level, and often tips me off about something I might like to consider. (Yes, I pay Max for advice - and that may be the way we have to go if you want advice as well as cheap boxes).

And I venture the modest thought that such advice is worth a tad more than anything I'm going to get from some functionally illiterate 17 year old at Turdkey, assuming he can take his iPod buds out of his ears for long enough to notice I might actually be a customer looking for some service.

Some of those box shifters can be life-savers too - let's hear it for the likes of Canford, Studiospares and CPC who have got stuff to my door on guaranteed next day delivery in the past to dig me out of a hole. How many retail outlets are you going to trust to have something in stock when you need it in a hurry?

There's a precedent for what's happening in the UK. Look at the motor industry 10 years ago. Entirely based around a network of authorised dealers artificially inflating prices and sustaining "rip off Britain" tabloid headlines. So consumers got smart and starting buying their cars in Germany. For a few years there was a bit of a backlash with people like Rover trying to defy gravity and refusing to supply RH drive cars to Germany (silly asses, wonder what happened to them?), but the consumer prevailed, and the old order was, essentially decimated.

OVU, on a point of order, the fine on supermarkets for "overpricing" today still did not stop them decimating the High Street. All that fine means is they failed to decimate the High Street sooner, and with more brutality. The regulator has punished them for not delivering the coup de grace to more grocers quickly enough! (And rightly so).

The consumers are going to win this one - be under no illusions. It's only a matter of timing.

--------------------
Dynamite with a laser beam...


Edited by Steve Hill (07/12/07 11:02 PM)

Quote Steve Hill:

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Professionals learn to live with the fact that "boxes" may just need to be swapped out. If say the studio computer goes down I've got another ready to slot in. If my AD converters go, I've got another 24 channnels on the shelf. And so on.

---

Er... so where is the advantage of saving $50 buy buying something from the US at a bargain price, when you apparently now have to buy two of them (one as a reduandant spare) in order to protect your business?

You seem to be saying that it is right, or at least inevitable, that the lowest common international prices should prevail, and that the demise of the local distributor/retailer is just collateral damage. And then you happily accept the inherent side effect that you then need to double up on the equipment inventory because you no longer have any local support.

That doesn't seem to make any kind of long term business or financial sense; there really is only the immediate short term gain of, 'Yippee, I just saved myself $50' As I said earlier, this is the kind of widespread management accountant mentality that has overseen the complete destruction of pretty much everything I once held dear! And it can not work in the long term without destroying eveything craft-based in its path. Worse still, by the time people realise the damage has been done, it will be way to late to repair any of it.

Quote:

---

(Yes, I pay Max for advice - and that may be the way we have to go if you want advice as well as cheap boxes).

---

Again, this is another hidden cost of your saving. You save $50 on the purchase price, but you spend the same, or more, on expert advice and support which you would previously have got for free from your professional dealer (and I'm not talking national bedroom box shops here). I'm still at a loss as to where the real saving and advantages are in this brave new world you are championing.

Quote:

---

Some of those box shifters can be life-savers too - let's hear it for the likes of Canford, Studiospares and CPC who have got stuff to my door on guaranteed next day delivery in the past to dig me out of a hole.

---

These aren't really box shifters though, are they -- not in the same league as Sweetwater or Thomann. They can't be because they'd never survive. Their only stength is that they supply the more specialist, fiddly odds and sods that people are still preprared to pay a decent margin on. And yet even these are already being squeezed and will eventually be destroyed by cheaper overseas international box shifters.

Quote:

---

The consumers are going to win this one - be under no illusions. It's only a matter of timing.

---

I don't doubt it. The bedroom hobbyists will think it's great. The professionals will gradually die out, and another craft-based industry will have been destroyed. We always get what we deserve in the end...

Hugh


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Technical Editor, Sound On Sound

Quote Steve Hill:

---

Professionals learn to live with the fact that "boxes" may just need to be swapped out. If say the studio computer goes down I've got another ready to slot in. If my AD converters go, I've got another 24 channnels on the shelf. And so on. Even if my mixer goes down, I can record 18 or 20 mics direct into the computer through decent pre-amps. And I could do a mixdown in the box with help from a Mackie Universal Control. Everything I do is built on the possibility that I might have to live without something - anything - in a real life crisis, and still get the job done. And I'm sure a true professional like OVU does exactly the same.

---

Good for you and good for every pro out there in that privileged position. You are extremely lucky. Most others aren't in that position, however....

The semi-pros who rely on the extra income generated by gigging or doing little recording sessions, whatever, don't have those options. If something goes down, they can be f'cked because they don't have alternatives to wheel out as a replacement ... but their semi-pro status can be damaged if they have to cancel gigs/sessions especially if they are trying build a reputation with a goal of being a professional.

You appear to speak from a very privileged position Steve. By your own admission, your place is built upon the earnings you received as a well paid city lawyer and good luck to you. I have no problem with that. But you also have some fairly high profile contacts to bounce off and inroads to places to assess gear. In view of that, you can afford to order on-line with impunity - you have Max to advise you, you have people into your place bringing gear you can try out, you maybe even have a relationship with some manufacturers such that you can get gear in to assess and soak test to see whether you like/want/need it. Whatever.

Most people don't have that luxury. They need a shop to go and try things out (even if the environment is less than ideal). They also need a shop to fall back on if something goes wrong. And the purchase they make can represent a major part of their income either by way of saving or by way of finance and they can't afford a backup. You speak nonchalantly of being able to handle 18 or 20 mics through decent pre-amps if your mixer went down. Christ! For most people, that's the stuff of dreams!

Sorry but there's a smug hint of ivory towers and 'let them eat cake' in your proposition.

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Website / Music Lab Machines / Blog

Quote Stephen Parker:

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The only country that I know of where price fixing is the norm is the US where they have MAP (Min Advertised Pricing) set by manufacturers - basically a lower SRP that all dealers sell at.

Steve Parker
Music Technology Manager
Arbiter Group

---

Steve, you must be walking around with your eyes shut and ears blocked - point me at a UK dealer offering, say, the competitive upgrade to Cubase 4.1 at anything other than £379.00 - you know, the same one that Thomann can flog at £306.00.

And then tell me that reps don't have "conversations" with errant dealers who advertise kit at prices that don't fit with "premium" brand expectations.

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[url=http://www.facebook.com/pages/hifi-studios/117322741632389[/url]

Quote Steve Hill:

---

Quote snipsnip:

---

Quote Steve Hill:

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If you use a credit card, the retailer is charged a fee. With Visa, Mastercard this can be 1% or 1.5% of the transaction value. With Amex it's 5%.

---

This is a bit of a myth... the difference is normally nominal, but differs based on contract.

---

Well we've already had a senior manager from Arbiter say that they were asked to pay 4% so decline Amex cards... what exactly is mythical?

---

The mythical part is that a senior manager from Arbiter
and a lawyer/accountant previously employed by a
multinational accounting firm don’t know that when you are
quoted 4% fee by American Express it means that you will
be charged 4% in fees. And if you were quoted 1.5% for
Visa/Mastercard transactions you will be charged something
like 3.0-3.5% in fees. The reason for this is that
Visa/Mastercard will have all sorts of surcharges, etc.,
but AmEx will charge you 4% and that’s it. I don’t expect
you to believe me. But please do yourself a favor and ask
somebody dealing with Visa/Mastercard and American Express
to show you their monthly statements. I’m sure being an
accountant it will be a trivial exercise for you to figure
out what really is going on.

--------------------
Resistance - Liberty - Death to the oppressor

Quote Steve Hill:

---

the fine on supermarkets for "overpricing" today still did not stop them decimating the High Street. All that fine means is they failed to decimate the High Street sooner, and with more brutality. The regulator has punished them for not delivering the coup de grace to more grocers quickly enough! (And rightly so).

---

I am glad to see that you are in favour of monopolies decimating long-standing high street businesses (and reducing customer choice) and all that that implies to the employees of those enterprises (i.e. potential long term unemployment ... unless they toe the line and seek minimum wage shelf stacking or till duties at the emporia that forced them into this ignominious situation). Yay! Long live Sainsbury's, Tescos, et al and their exploitation of farmers and workers worldwide for selling their sub-standard, bland, chlorinated shite to a price point (not to mention the COLOSSAL wastage of perfectly good food that is rejected and thrown into landfills because it doesn't meet their 'shelf appearance' criteria ... or thrown out if the sell-by date is exceeded ... assuming, that is, they don't use immigrants living on the edge of legality to re-sticker the sell-by dates) not to mention the air miles their produce generates - unless you prefer battery chicken flown in from Vietnam to local produce?.

I am surprised you favour such a business model - I know you don't give a fig about the British workforce (given your disdain for the sacked workers at Cadbury's in a previous OT thread as Cadbury's moved production to Poland) but the environmental aspects about which you are so passionate?

Or do you have a special eco-friendly source for your Christmas beef wellington that we plebs are not aware of?

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Website / Music Lab Machines / Blog

Quote hollowsun:

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Most people don't have that luxury. They need a shop to go and try things out (even if the environment is less than ideal).

---

Why don’t just buy whatever you like from a box-shifter and return it for a refund if it doesn’t work for you?

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Resistance - Liberty - Death to the oppressor

Quote Hugh Robjohns:

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Again, this is another hidden cost of your saving. You save $50 on the purchase price, but you spend the same, or more, on expert advice and support which you would previously have got for free from your professional dealer (and I'm not talking national bedroom box shops here). I'm still at a loss as to where the real saving and advantages are in this brave new world you are championing.

---

It's the way of the world. I am just reporting it - not condoning or condemning. The cost of service used to be included in the goods, which were higher priced. The craft industry whose passing you lament was fine: as long as you had a million quid to equip a studio.

That massive structural change to the industry, driven by cheap IT, is the reason most members of this forum are here, and it's why SOS exists (and why say Studio Sound no longer exists). And overall, this change is a good thing: it's made high quality recording accessible to literally millions of people who otherwise would have had to pay for studios or go without. That's a good thing. For hobbyists, professionals, music, and indeed manufacturers and distributors and dealers who hav ehappily sold into this vastly expanded market.

I'd suggest it's you who wants to have your cake and eat it, not me, and not the liberated millions.

The consumers voted long ago for cheap prices. And the rational response by suppliers to that is that service is no longer included in the price - whether you want to use Amex at DV, or whether you want genuinely expert advice on what to buy, or whether you want any support - any support at all - from Apple and a growing number of other suppliers, the deal now is that you pay for it.

Yes, there is redundancy in the systems in my studio. How many threads have we had about say live recording advising that you record to at least two machines, possibly three? Dozens! I'm not talking from a position of extreme privilege or bloated plutocracy. I'm running a business with real life clients who might - in one case this year - have flown in from Virginia for three weeks, committed expense to pre-booked session musicians, and expect things to work. Otherwise they could quite properly look to me to reimburse the thousands of pounds they have wasted, as well as refuse to pay me.

A hobby/project studio can close for a few days if something critical blows up. I can't. And I'd expect no less from any professional studio. (It's also one of the reasons why I get mildly irritated when people assert that you can have a "professional" studio and get change out of £5,000. It can't be done).

Edited by Steve Hill (08/12/07 08:32 AM)

... by the way, my AmEx is a Credit Card, used and paid juts like a regular Visa / Mastercard / etc, NOT a Charge Card.

Funnily enough, when I was in LA last year, several stores would not accept my AmEx card, which was hilarious.

P

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Composer, Producer, Sound Designer
www.universal-sound-design.com

I think that as the box shifters target the price conscious consumers there will still be room for a few places that compete on quality of service or cater to the 'pro' market.

It's happened with supermarkets vs butchers & greengrocers. My local butcher is apparently thriving, with a queue out of the door every saturday, because they sell high-quality organic meat along with a range of sauces, condiments, pies and home made sausages. We also have a nice deli / greengrocer, and there are dozens of small pie & sausage producers springing up.

Just to put in my 2 pence.

Steve mentions about lots of hobbyists being on here, and I am one of those.

I bought my first synth and sequencer 15 years ago, and haven't really had the money to expand since.I bought the synth from X-music, and didn't get much help from them, and have had similar experiences from Turdkey and GAK.

I have never thought these outlets offered particular support for hobbyists, so don't think much has chaned over the last 15 years.
I had a very good experience at DV, but there was more about the person who served me than the ethos, I had a very bad experience at a different store.

I view "box-shifters" as a bit like sellers of OEM stuff. You either buy it because you know what you are doing, or you buy it because it is cheap. I buy OEM stuff because I know what I am doing, I buy stuff from "box-shifters" because I can't afford more, I read reviews, and ask questions on here, then, as my dad would say "I pays my money and takes my choice".

Would I pay an extra 10-20% on the price of my kit for more professional support - no, because I can't afford it.

I also accept that you have to protect the market. How much does it cost to have a 100,000 sq ft warehouse in India, fully staffed, along with people mannning the phones compared with the same set-up in London?

If you want/need a presence in your country, you have to pay the going rate for the staff.

Not sure what my point is

--------------------
Is thinking about starting a new project

Quote Steve Hill:

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The consumers are going to win this one - be under no illusions. It's only a matter of timing.

---

Actually they will lose - because lowest price destroys everything else.

I'm with 0VU and Hugh on this.

--------------------
John - Sound-Link ProAudio
President - Federation Internationale des Chasseurs de Sons

John, it's unfair to put you personally on the spot, but assuming Sennheiser are happy with the margins they get selling to US customers, why are they not happy to sell to me at the same (lower) price?

Are they afraid the management will be subjected to extraordinary rendition and end up in Guatanamo Bay unless they are especially nice to Americans or something?

I like Sennheiser. I've got 14 mics with the name on, lots of headphones, and a similar number of mics by Neumann (same company). I am wholly sold on buying quality products.

Quality and fair comparative pricing between different markets - especially when any fool can google the comparison in 10 seconds - are not mutually exclusive. And if the googler feels he's being ripped off having got that information, he's going to draw conclusions about which supplier companies he likes.

I have heard nothing, ever, from any supplier justifying these differential prices, other than frankly incredible tosh about "different market conditions" which would not stand up to scrutiny by a first year audit student.

And I think we have a right to know.

--------------------
Dynamite with a laser beam...

Why can't suppliers think of the UK (or anywhere else) as an extension of US sales?!?! If the US is their main source of orders / income then surely the UK sales, at the same price, would simply be extra revenue? Yes, we're a LOT smaller, but this doesn't justify us having to pay more (often double) to compensate for this.

I've yet to read anything viable or something to convince me otherwise that UK prices are fair.

Cheers,
P

--------------------
Composer, Producer, Sound Designer
www.universal-sound-design.com

Well, I've just made a decision and bought Komplete 5 + Kore 2 from the US, literally minutes ago, from a store I've used in the past. It came to £475, which includes international shipping and this is £225 cheaper than the BEST UK price. I'm anticipating import tax and duty to be < £75. Fantastic

Cheers,
Peter

--------------------
Composer, Producer, Sound Designer
www.universal-sound-design.com

VAT will be 17.5%. Import duty is 0% according to this:

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.porta l?_nfpb=true&_pageLabel=pageTravel_ShowContent&id=HMCE_PROD_009989&propertyTyp e=document

I've just been checking the prices on a few things. Some made in the e.u. stuff i.e RME cards & converters, is actually cheaper to buy in the UK by as much as 18%. So it works both ways.

Edited by Hugh Robjohns (08/12/07 09:36 PM)

Quote Steve Hill:

---

why are they not happy to sell to me at the same (lower) price?

---

because it is a lower price?

Companies get what they can. Some attempt to get a higher price by claiming they give better service (and therfore appeal to a small section of the market). Some might actually give a better service - but I haven't found one yet.

J

For me it's really just the some of the greedier US and big Japanese manufacturers...
I just haven't bought their goods in the UK because it just *feels* like I'm being shafted. That's after comparing pre-tax prices and seeing 20-40 percent being creamed off, and yet some products (of the same type) are directly comparable.
I will buy Euro gear here instead of US or Jap stuff quite often though unless unavoidable.
This country's too expensive to begin with - Too many dumb, fat, bone-idle exec's poncing around riding the mug-punters. I do however fully support those who are pulling their weight.
If someone's losing my custom, they aren't doing their job or they're paying the *longterm* price of allowing our economy to become what it is. Harsh, but that's business. Boohoo, they wouldn't give a s*** about us - their rules.

Seems to me that the practise Steve reports of having a broad set of fallback options is pretty much what every professional has done for ever. It also seems to me that such people have never bought big ticket items on the high street, ever (Hell, even I don't).

If you build a relationship with a real pro audio dealer (NOT a highstreet store, these people live on industrial estates not shopping streets) you will probably be getting well below list price on reasonable size orders. On serious PA gear, I normally figure that if I am buying a few grands worth it will be at around 30% off list. The other side is that they also get my orders for cable and connectors (and while I don't expect to be ripped off), I don't quibble over the price of the small stuff. This also makes for someone you can ask advice of (And who is even sometimes good for some work).

Now, in the MI market (which has recently been very much highstreet based), the mail order box shifters are having a devastating effect, but it is really a continuation of what the advent of the sound controls/turnkeys/digital villages of this world did to the single area specialists a few years previously (You try to find a specialist guitar shop (as in has someone who really knows how to set one up) these days, they exist but not on the high street). The fact that these places will be pushed into moving to industrial estates and into becoming somewhat specialist is IMHO no bad thing (The saleschildren they employ are seldom good sources of advice).

As to the cost of having the fallbacks, a lot of those can be replaced by some creative engineering and a fairly small spares inventory. For example last time I suffered a major desk power supply fault (it happens, in this case to both main and backup within 2 minutes (Different faults when I had them apart, how unlikely is that?)), the temporary fix involved two car batteries and 5 PP9 9V batteries, +-12V, +45V (close enough) and I was back in the game in under 20 minutes from when the blue smoke appeared.
This does of course require the appropriate amount of engineering smarts, but it is a trade off, you can afford to run with less support from your dealer if you know more stuff and have a well equipped 'tronics workshop (and have better contacts), but if you don't then you better have that relationship that costs the extra 10% (And it is IMHO worthwhile anyway).

Now none of this directly relates to the 'interesting' international pricing (or at least to differences in ADVERTISED price - often not the same as you pay), I bet the differences are much smaller in many cases if you go to a real pro audio place.
In point of fact the canonical German box shifter actually prices out as rather steep on some of the more expensive stuff when compared to what a local dealer will sell it for (by over a grand on ~14Ks worth of mixer), so it is not always a case that the box shifters are cheap.

Regards, Dan.

--------------------
Audiophiles use phono leads because they are unbalanced people!

FWIW I just got the bill from DHL for VAT on some stuff I got in from Malaysia earlier this year - 17.5% vat nad no import tax.

Again this was on a relatively inexpensive shipment of small electronic parts, but it does make it evident that typically we are NOT going to get shafted on VAT or improt duty provided we play the game with C&E and VAT chaps.

Bear in mind that you would be paying the VAT anyway & so if what you are buying still works out cheaper, howe can it NOT be a good deal?

I have a good friend who is involved with DV and several others who are employed there and they all claim to be making very little in the way of profit on most of the "everyone wants one" lines.
Typically around 5% gross.
So who IS making "all that money"?
I suspect that a lot of the differences between USA and UK are down to scale - 123 Musicians Friend and the other BIG players have monumental buying power even compared to the likes of DV/Turkey/&c.
And lets not forget how many US major players have gone to the wall or been swallowed up by the biggies lately.
Its all about the same business model as the Tescos of this world.
And of course up to a point the average consumer wins in terms of price, but not necessarily in the lkong term, as the pressure on manufacturers to reduce costs and therefore street prices will eventually lead to either them going out of business or reducing the quality of their manufacturing and of course their future R&D.
We cant have our cake and eat it.

--------------------
Me? But I`m such a loveable old bugger!

Quote dmills:

---

Seems to me that the practise Steve reports of having a broad set of fallback options is pretty much what every professional has done for ever. It also seems to me that such people have never bought big ticket items on the high street, ever (Hell, even I don't).

---

Well, quite. If you're running a business, you absolutely have to factor redundancy into what you're doing. If my main DAW machine dies, I've got a backup - it's not as powerful, but it'll let me track and get a rough while clients are in. If that fails, I've still got standalone kit that will get us through.

A pro (attitude, not necessarily financial status) will always have spares of everything, just in case, whether it's live or in the studio.

These days, though, even studios that are making money need to be very careful with the money - if you can make a purchase for £100 less than you might have budgeted, it makes sense so to do. It's all about keeping the overheads down - and because successive governments have seen fit to continue to pile onerus taxes and stupid rules upon the small business, we're all being forced into bean-counting more than we used to.

That means looking for good prices every time you make a purchase - it means haggling, googling for the bargains, maybe buying stuff that's just been discontinued and so on.

All of which makes it galling to see the kit you'd like being sold in thUS or elsewhere at a fraction of the price being fixed in the UK. And it makes a mockery when it's more cost effective for me to buy abroad than it is to buy at trade prices...

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[url=http://www.facebook.com/pages/hifi-studios/117322741632389[/url]

It's kind of ironic, is it not, that the title of this thread happens to be "Digital Village"? (Think about it...)

--------------------
Dynamite with a laser beam...

Quote IvanSC:

---

I suspect that a lot of the differences between USA and UK are down to scale - 123 Musicians Friend and the other BIG players have monumental buying power even compared to the likes of DV/Turkey/&c.

---

Precisely! Go to the top of the class Ivan

I repeat - you must not underestimate the power the buyers at these franchises have over manufacturers ... it is colossal. They can dictate (not negotiate!) the price, when the manufacturer will get paid, sometimes even the specs by way of software updates. And the manufacturer will inevitably bend over and take it because they know that unless they concede, they will not sell product in the world's largest market. They know as well that if they meet their demands, said stores will buy boatloads of their stuff. And sometimes the manufacturer makes bugger all (if any sometimes) profit on the deal! Why do they do it? Because selling 10,000 units or more with a $10 profit is better than selling none with a $100 profit. And why don't they adopt a similar strategy here in the UK? Because selling 500 units with a $10 profit hardly covers administration costs let alone sales staff salaries, funding tech support personnel, warehouse floorspace rental, etc..

Quote IvanSC:

---

Its all about the same business model as the Tescos of this world.

---

Yep. And in much the same way the übermarkets treat their farmers/suppliers, so the large US stores treat the manufacturers - squeeze the lowest price possible out of them. And like farmers, if you voice an objection, you can just be struck off their list and you may as well pack up, turn the lights out and go home.

Quote IvanSC:

---

And of course up to a point the average consumer wins in terms of price, but not necessarily in the lkong term, as the pressure on manufacturers to reduce costs and therefore street prices will eventually lead to either them going out of business or reducing the quality of their manufacturing and of course their future R&D.

---

Which is exactly what has happened and is happening!

Quote IvanSC:

---

We cant have our cake and eat it.

---

I do find it ironic that people want stuff dirt cheap (and are getting it) and then complain that there's no service/support

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Website / Music Lab Machines / Blog

Thanks to Hollowsun, and Ivan for continuing to try and educate people about the realities of this business.

and the kinds of numbers Steve (Hollowsun) is throwing around are not atypical , or unrealistic either....

the North American continent market is by far still the largest sales area for our kind of toys.... and is essentially run by just a couple of retail chains.... who, in some areas, have more buying power EACH, than the entire European market.... never mind the UK.

and the UK market is , although perhaps with a higher average sale value per capita, actually one of the smallest regions , in terms of sales and yet highest cost in terms of marketing and rep mileage.... (per unit sales)


The only reasons many bother, is that

A) The Uk has always somewhat led the way in terms of music and media production, having far more impact than it's size or population would suggest. Thus it's sales , while not of the same magnitude as some other regions, still carry useful positive marketing weight....

B) many of the premier league quality audio development teams and brands are UK based , as a result of our historical engineering excellence.... (something recent governments have successively largely wasted and/or destroyed)


were it not for those factors, frankly, you'd be lucky to be able to buy much more "off the shelf" than an average 3rd world market supports.

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if you don't know who i am, i aint gonna tell you.

if you would like some serious figures to read up on, and have the requisite fee for the report....

http://www.researchandmarkets.com/reports/338782/musical_instruments_strin g_guitars_violins.htm


and 3496 euros , you'd have to REALLY want to know....

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if you don't know who i am, i aint gonna tell you.

I repeat my open question to Yamaha, Sennheiser et al... why will they not sell to me at US retail prices?

And why in a "free" market do they seek to stop me buying by mail order from US outlets and sorting out my own shipping, VAT, duty etc? (It's not as if Sweetwater has a passport control booth if I turn up in person, is it?)

Sure, I understand the power of US retailers. But the manufacturers manifestly do NOT understand the power of the internet, and the lasting, probably terminal damage to their reputations which flows from a deliberate policy to continue mugging me while I can find out in 5 seconds the extent to which they choose not to mug other people.

If they want to treat me as a second class citizen, I am more than happy to treat them as third rate suppliers and ignore them.

There's an old marketing maxim... it costs ten times more to get a new customer than it does to keep an existing one. And they are losing me. I'm already fed up to the back teeth with e.g. paying £40 (to Thomann, in Germany) for a mic clip for a Sennheiser 421, or £250 for a U87 shockmount. There are very serious competitors out there. (My U87s and KM84s/KM184s sit in very nice Peluso "clone" shockmounts, shipped from America at a fifth of the price...).

Some mornings I wake up feeling genuine animosity to these companies for this sort of exploitation. And when I buy new mics these days, they tend to come from interesting new "boutique" suppliers.

You can make the best product in the world, but you won't sell it if you treat your customers like idiots, or worse, with contempt and disdain.

Why (apart from naked greed) is it so hard for them to see that?

Edited by Steve Hill (09/12/07 09:58 PM)

Quote hollowsun:

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Because selling 10,000 units or more with a $10 profit is better than selling none with a $100 profit. And why don't they adopt a similar strategy here in the UK? Because selling 500 units with a $10 profit hardly covers administration costs let alone sales staff salaries, funding tech support personnel, warehouse floorspace rental, etc..

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Until, of course, you add that 500 to the sales elsewhere in the world. No matter how much anyone might think that the big US chains are screwing prices down, outfits like Sennheiser and Yamaha have beancounters working things out to make sure that there's enough markup when the kit leaves the factory - else it doesn't.

And if it can leave the factory at that price to get to the US, then it can leave for the UK at the same price. More to the point, I don't honestly think that Yammy or Senn actually give a flying fork whether Sweetwater or wherever flogs some kit to an English bloke - but I dare bet that the UK disties and UK branches give rather more than a flying fork - it'll have come from the UK, not Japan, all this price fixing bollox.

Like I've said before, I'm firmly with Steve on this one - I'm sick to the back teeth of being ripped off by price fixing and dollar=pound crap.

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[url=http://www.facebook.com/pages/hifi-studios/117322741632389[/url]

Quote Steve Hill:

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I repeat my open question to Yamaha, Sennheiser et al... why will they not sell to me at US retail prices?

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Errmmm... because they can't afford to given the small UK turnover?

Quote Steve Hill:

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And why in a "free" market do they seek to stop me buying by mail order from US outlets and sorting out my own shipping, VAT, duty etc?

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Do they actively stop you? I think not. But they'd probably prefer it if you didn't.

Quote Steve Hill:

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(It's not as if Sweetwater has a passport control booth if I turn up in person, is it?)

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True - but US Customs & Excise do!

Quote Steve Hill:

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Sure, I understand the power of US retailers. But the manufacturers manifestly do NOT understand the power of the internet, and the lasting, probably terminal damage to their reputations which flows from a deliberate policy to continue mugging me while I can find out in 5 seconds the extent to which they choose not to mug other people.

---

And I suggest that you do not understand the lasting, probably terminal damage to their R+D departments if they can't get a meaningful ROI by continually dumping stuff out at bargain basement prices.

Besides which, it's not always the manufacturer that is the bogey man here. Often, dealers take a hit on their margins to sell some quantity and they'd rather get 5% of something than 15% of nothing.

Quote Steve Hill:

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If they want to treat me as a second class citizen

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How on earth are they treating you like a second class citizen? If you want a taste of that, try being a woman in certain middle eastern or third world countries! Being charged a little more for a mic in the UK is hardly comparable especially when you have the option to buy elsewhere.

Quote Steve Hill:

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There's an old marketing maxim... it costs ten times more to get a new customer than it does to keep an existing one. And they are losing me. I'm already fed up to the back teeth with e.g. paying £40 (to Thomann, in Germany) for a mic clip for a Sennheiser 421, or £250 for a U87 shockmount. There are very serious competitors out there. (My U87s and KM84s/KM184s sit in very nice Peluso "clone" shockmounts, shipped from America at a fifth of the price...).

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So you have found a cost effective solution. Excellent. What is the problem?

Quote Steve Hill:

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Why (apart from naked greed) is it so hard for them to see that?

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Naked greed? Just like yourself, they are trying to run a profitable business not a charity to support impoverished musos or tight wads ... they want an ROI on their product. Without that, the bean counting accountants move in, halt development, sack engineers, cut back (or stop) support and then dumb down their product line to sure fire, cheapo, numpty, 'kwiksell' boxes that will satisfy share holders ... or close down/sell off the company completely. And it won't matter that the 'kwiksell' boxes don't work (at the price they're going out for, there were insufficient dev funds required to test it properly and the bargain basement profit margin doesn't afford any tech support), the box has shifted, generated a sale so the shareholders are happy - f'ck the customer.

Is this the world you want? Because it's the world you're gonna get!

Rant and puff against Sennheiser (whoever) all you like but will you be happy when their shareholders decide that $25 shite is where the mass market/profitability is at and they have their bean counters disband their engineering power (or re-assign it to producing $25 shite). Or perhaps you'd be happy if Yamaha's shareholding board decide that making Motifs or studio monitors or digital desks is too much trouble and no longer profitable so chuck that line in favour of cheap home keyboards and digital pianos for the Chinese market which is.

Your choice.

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Website / Music Lab Machines / Blog

Quote hifistud2:

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And if it can leave the factory at that price to get to the US, then it can leave for the UK at the same price.

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Theoretically yes; practically no.

Quote hifistud2:

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More to the point, I don't honestly think that Yammy or Senn actually give a flying fork whether Sweetwater or wherever flogs some kit to an English bloke

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True - which is why I don't understand the hissy fit!

Quote hifistud2:

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but I dare bet that the UK disties and UK branches give rather more than a flying fork - it'll have come from the UK, not Japan, all this price fixing bollox.

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Not sure I understand your point there.

What the UK "disties" will give a flying fork over is that a UK citizen has not given them the business and bought from abroad (effectively smuggling!) and they will have lost out thereby paving the way, perhaps, to their ultimate demise. There's a good business model - everyone shopping abroad with no local support

Quote hifistud2:

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I'm sick to the back teeth of being ripped off by price fixing and dollar=pound crap.

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Price fixing, dollar=pound crap?

I was in LA week before last. I bought a six pack of beers for $6 (that's roughly £3 here). Here, the same would cost me at least $12/£6 or more. Smokes are half the price they are here. Petrol is almost free there (I jest, of course, but it's a f'ck sight lower than here). A whoppa-burger there is 99¢ (50p), my lunch worked out at around £1 for a help-yourself-to-what-you-like salad and 30p for a coffee. A Coke was half the price of the UK. I could buy a litre of milk for a fraction of the cost here. The cost of living in the world's biggest Western market is considerably less than it is here in the UK and much of it due to taxes and stuff our government impose.

Strikes me that what people want here are products whose price is dictated by another country's economics. Short term, that will get you a bargain. Long term....? You may get royally f'cked when the shareholders decide it's no longer profitable to invest in a lame duck that generates little or no profit. Which is the bottom line, like it or not!

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Website / Music Lab Machines / Blog

Quote hollowsun:

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Theoretically yes; practically no.

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Practically? Hmmm... lemme see - it costs me £20 to make a doobreyfirkinwotnot, and I flog it out the door at £40 - £39 if you buy a thousand. Some big company comes along and says "we want fifty thousand a month, and we'll pay you £31 for each one." I'm re-tooling, re-sourcing and my buy price oes down to £15... still got the same percentage markup, and I flog to everybody at £31. It's not rocket science.

Quote hifistud2:

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More to the point, I don't honestly think that Yammy or Senn actually give a flying fork whether Sweetwater or wherever flogs some kit to an English bloke

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Quote:

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True - which is why I don't understand the hissy fit!

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Simply because they'll sanction protectionist price-fixing tactics generated in the UK market - just because it wasn't their idea doesn't mke them any less guilty of conspiracy.

Quote hifistud2:

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but I dare bet that the UK disties and UK branches give rather more than a flying fork - it'll have come from the UK, not Japan, all this price fixing bollox.

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Quote:

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Not sure I understand your point there.

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The point is as I've just made - if Yam etc can afford to have its it sold at $XX in the US, it can afford to have 'em sold at the exact same price over here.

Quote:

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What the UK "disties" will give a flying fork over is that a UK citizen has not given them the business and bought from abroad (effectively smuggling!) and they will have lost out thereby paving the way, perhaps, to their ultimate demise. There's a good business model - everyone shopping abroad with no local support

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1. It's not smuggling - you pay the VAT and duty. And tough on the disties - if they got as tough with the manufacturers as these mythical huge stateside companies and weren't complicit in price fixing (of which I have first hand experience, by the way), then they might get some sense out of the manufacturers.

2. Local support? I give the local support round here, because the majority of outlets aren't bloody capable of so doing! But I think you'll find sites like this very one are taking over that very task - and, like here, are often much more useful, quick and knowledgeable than many retail outlets.

Quote hifistud2:

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I'm sick to the back teeth of being ripped off by price fixing and dollar=pound crap.

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Quote:

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Price fixing, dollar=pound crap?

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Price fixing... I take it you know what that is? Disties/makers imposing artificially high prices on retaillers by threatening to stop their supply if they don't play ball. I have first hand experience of this. I don't like it.

And charging in pounds what US dealers charge in dollars - go price a U87 in the states...

Quote:

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I was in LA week before last. I bought a six pack of beers for $6 (that's roughly £3 here). Here, the same would cost me at least $12/£6 or more. Smokes are half the price they are here. Petrol is almost free there (I jest, of course, but it's a f'ck sight lower than here). A whoppa-burger there is 99¢ (50p), my lunch worked out at around £1 for a help-yourself-to-what-you-like salad and 30p for a coffee. A Coke was half the price of the UK. I could buy a litre of milk for a fraction of the cost here. The cost of living in the world's biggest Western market is considerably less than it is here in the UK and much of it due to taxes and stuff our government impose.

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You're shopping in the wrong plce, mate - six quid for a six pack? Never heard of ASDA?? :-) And your food prices - yes, the US is very cheap to eat in - it's even free in Vegas. So what? I'll repeat, US retail prices are less than our trade prices - again, first hand experience. Ergo, we should be able to buy (at trade) much more cheaply.

Quote:

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Strikes me that what people want here are products whose price is dictated by another country's economics. Short term, that will get you a bargain. Long term....? You may get royally f'cked when the shareholders decide it's no longer profitable to invest in a lame duck that generates little or no profit. Which is the bottom line, like it or not!

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The price to manufacture is based on another country's economics - it's the price to retaillers and the price fixing that goes on that causes the problems. It's patently not protecting UK businesses, because more people are buying from abroad (yes, even from Thomann) to get best prices, given the paucity of support you get here anyway. And there's the school of thought that says if Yamaha and others dump the UK, then UK based manufacturers of kit will do better.

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[url=http://www.facebook.com/pages/hifi-studios/117322741632389[/url]

Quote hifistud2:

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The point is as I've just made - if Yam etc can afford to have its it sold at $XX in the US, it can afford to have 'em sold at the exact same price over here.

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No - it can't. The economics and the scale just cannot be compared.

"Yam etc" can afford to have it sold at $XX in the US because they shift sh'tloads over there - thousands, tens of thousands of units compared with maybe - if you're lucky and it's a 'must-have' item - hundreds here. THAT'S the difference.

The US chain suppliers have colossal bargaining power; UK dealers do not. Neither can UK dealers survive by matching US margins ... which is clear to see by the fact that a lot of local high street music shops have gone to the wall because they are unable to compete pricewise with the internet. That may not bother you or the net savvy in search of the cheapest deal but I wonder where kids will go in future to try out the latest guitar, bass, amp, keyboard - whatever - when all these places are replaced by Starbucks, MuckDonalds or charity shops. Oh! F'ck 'em - use the 30 day returns policy and let the buggers sort it out.

Oh brave new world.

Short term thinking; long term ramifications....

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Website / Music Lab Machines / Blog

Just a little story. About fifteen years ago I decided to set up my studio in a high street location. I wanted to separate work from home, and it was a novelty to get up in the morning and leave the house. I thought that, given the location, I could start selling gear as a sideline, so I got the Yamaha rep round for a chat. It transpired that, on my projected sales, Yamaha's trade prices to me would actually be more expensive than Turnkey's retail prices! Not a huge surprise in retrospect, but an eye opener when it comes to the realities of music retail in this country.

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"Over fifteen years without a slogan"

This is like a pantomime - oh yes they can, oh no they can't...

On the narrow question, the reason I can't buy Yamaha from a US retailer is because Yamaha makes it a term of supply that they do not supply mail order customers overseas, protecting (that odious word again) their dealers in those countries. That stinks.

I got the Peluso stuff through their UK distributor at a bit more than US prices (fair enough with shiping, VAT etc) but far far less than the equivalent Neumann bits.

R&D? We're talking about elastic bands on a wire frame here. And with the possible exception of digital technology and some specialist applications like surround sound and binaural experiments, mic technology was pretty much settled in the 1930s and has not evolved since. Thereafter it's about engineering quality, reliability etc... and a small handful of "traditional" excellent companies no longer have a monopoly there.

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Dynamite with a laser beam...

When I came to buy my new studio desk (Omnirax so not cheap anyway) I checked the UK dealer for a price and it was more than double the US price in dollars. They had taken the dollar price, doubled it and then turned it in to £s. Therefore, a $750 desk became a £1500 desk. Needless to say I imported from the US and even with shipping and VAT etc I saved £300.

Steve and others are claiming that companies can afford to sell at US prices across the world and as he says this has degenerated into a oh yes they can - oh no they can't.

At the risk of bringing real data in and spoiling this entertaining comic turn, is there any evidence from the profits of these companies that they could afford to reduce their margins?

I have to add that I don't think it's fair to claim that companies are treating me as 'second class' for charging the price they can. They don't owe me anything. That's not to say I like it...

J

Quote Setter:

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Steve and others are claiming that companies can afford to sell at US prices across the world and as he says this has degenerated into a oh yes they can - oh no they can't.

At the risk of bringing real data in and spoiling this entertaining comic turn, is there any evidence from the profits of these companies that they could afford to reduce their margins?

I have to add that I don't think it's fair to claim that companies are treating me as 'second class' for charging the price they can. They don't owe me anything. That's not to say I like it...

J

---

They certainly didn't like me importing the desk from the US.

Quote hollowsun:

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I do find it ironic that people want stuff dirt cheap (and are getting it) and then complain that there's no service/support

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This is not the case with me, I simply want a price that is fair, not neccessarily dirt cheap. I rarely use customer support, all my help usually comes from forums or my own doing.

There really is no excuse for a distributor to say, "we're charging you another £xxx.xx, in the UK, for support", when we could've got that same support for £xxx.xx LESS elsewhere. If this is the case, why don't they sell the products for same price and give the customer the option to purchase support? Sony do this, but they still give you online and direct support, which is quite quick and efficient.

This brings me onto another question... I may move aborad within the next 12 months, possibly Canada / US. What happens to my customer support then, for products I purchased outside of these territories, i.e. Cubase SX?

Cheers,
Peter

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Composer, Producer, Sound Designer
www.universal-sound-design.com

Quote hollowsun:

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"Yam etc" can afford to have it sold at $XX in the US because they shift sh'tloads over there -

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That still doesn't make sense. They're shifting loads of units in the US... GREAT... They're shifting even more within the UK / Europe so how come we're paying more?!?! It's still the same product shipped from the same production line. Like I said before, why can't manufacturers treat our tiny UK as an extension of US sales, gaining extra 'fair' revenue rather than adding a dollop of extra and unjustified cash on top just becasue we're smaller. The word discrimintaion springs to mind!!!

It simply DOESN'T cost any more to ship to the UK than it does the US. The days when people actually believed that are long behind us!

P

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Composer, Producer, Sound Designer
www.universal-sound-design.com