Shane's epic essay on US vs Australia pricing

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Re: Shane's epic manifest on US vs Australia pricing

Post by guitarsatbmusic » Fri Oct 30, 2009 5:00 pm

Received this yesterday from a distributor and have edited so as not to reveal identity:

Price changes and Foreign Currency Exchange Rates -

a look at the last 18 months.


July 2008: AUD (Australian dollar) peaks against USD (US dollar) at 97.15c (i.e. $1.00AUD = $0.9715USD). Over a period of nearly two years, we had been absorbing our suppliers’ ex-factory price increases on the back of the increasing value of the AUD.

By October 2008, the AUD had fallen to USD$0.6211 at its lowest point. This is a change in value of 35.04 cents (US) per $1AUD, or -36.07%, a massive drop in buying power. To regain the entire value of this loss, our Recommended Retail prices would have had to increase by approximately 56.5%. Instead, we kept our heads and raised prices across the board by only 15%.

This was the first time decades that this radical step had been taken by us. Usually, prices are set based on the exchange rates and freight costs at the time of a particular shipment from an individual supplier, and this usually remains stable for most of a given year. Our suppliers set their ex-factory prices in conjunction with the fiscal year of the country of origin and release their new price-lists at the relevant trade shows: NAMM (January) for the USA, Frankfurt Musikmesse (late March) for Europe and Shanghai Music China (October) for China. This means that we release our new prices after a short time-lag (usually a couple of months) for goods originating in those regions once shipments of new products start to arrive. The circumstances of the sustained decrease in the value of the AUD forced us (and most of our competitors) to revise prices around October 2008.

After several months of minor fluctuation, the AUD was still at USD$0.6348 in March 2009.

Since that time, the AUD has strengthened against most other currencies. This is due in part to the recent increases in the Australian Reserve Bank interest rates and some other favourable figures, e.g. CPI, growth of the economy in general and lower than expected unemployment.

It remains to be seen whether or not the AUD will maintain current exchange rates in the longer term. As I write, the AUD has lost 2c US in the last 24 hours (down from 0.9177 28/10/09 to 0.8954 11am 29/10/09)!

The RRPs of some products may be decreased over the next few months as shipments arrive. In fact, prices of some items have already been decreased. Any price decreases are dependent on the exchange rates at the time we pay the invoice. So, while we are seeing some advantageous rates at the moment, if no shipments are arriving for a particular product, there is no real decrease in costs.

Our suppliers are now paying more for their raw materials, particularly if they are buying in AUD. There are always price increases ex-factory due to increases in costs for materials, wages, taxes etc.

There have also been many extra fees and charges associated with freight and customs clearance introduced during the last several months. These factors maintain upward pressure on prices.

We will continue to monitor our prices and will endeavour to keep them as competitive as possible, both locally and internationally.

NB: Recommended Retail Prices for the following products are set by their respective Australian agents, not by (the distributor):

(This was followed by a long list of brands which are either Australian made or distributed by another distributor with a larger customer raeach such as this one, or spread throughout states by sub-distributors).
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Re: Shane's epic manifest on US vs Australia pricing

Post by lolomgwtfbbq!!! » Fri Oct 30, 2009 7:47 pm

To regain the entire value of this loss, our Recommended Retail prices would have had to increase by approximately 56.5%.
Fuck that!
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Re: Shane's epic manifest on US vs Australia pricing

Post by guitarsatbmusic » Fri Oct 30, 2009 9:25 pm

lolomgwtfbbq!!! wrote:
To regain the entire value of this loss, our Recommended Retail prices would have had to increase by approximately 56.5%.
Fuck that!
Fuck that indeed. So the knockers might have learnt a thing or two about the distributors they shit on 8-) Then again, they probably won't have :?
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Re: Shane's epic manifest on US vs Australia pricing

Post by Liromyc » Wed Nov 11, 2009 12:19 am

Thank fuck our currency is pegged to the US$.

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Re: Shane's epic manifest on US vs Australia pricing

Post by guitarsatbmusic » Wed Nov 11, 2009 12:32 am

You have an upper and lower limit there don't you man, like a very narrow band that is guaranteed by the linked system? Any discussion there regarding the Chinese and the renminbi artificially manipulated by the Government in that, as I understand it, it's not a linked currency yet it still seems to exist as a defacto one? And is there any discussion about pushing it into the territory there and Macau?
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Re: Shane's epic manifest on US vs Australia pricing

Post by Liromyc » Wed Nov 11, 2009 12:48 am

You got it. It's very very narrow. ;)

As for the RMB...cough cough... ;) ;)

Some stores in HK will take RMB. Almost all places in Macau take HK$.
No talk of having RMB here, so Hong Kong will keep HK$ and Macau the Pataca,

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Re: Shane's epic manifest on US vs Australia pricing

Post by guitarsatbmusic » Wed Nov 11, 2009 8:46 am

Cool, thank you mate 8-)
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Re: Shane's epic manifest on US vs Australia pricing

Post by DamoESP » Sun Nov 22, 2009 3:50 pm

M2k wrote:guitar world on the gc is having a 'Massive ESP and LTD sale' but there prices on special is the same as shanes normal prices
Kosmic have been doing this for years.
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Re: Shane's epic manifest on US vs Australia pricing

Post by KH Guitar Freak » Sat Jan 30, 2010 10:59 pm

^Well, not to mention Mega Music does that shit as well...

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Re: Shane's epic manifest on US vs Australia pricing

Post by mensis » Thu Apr 29, 2010 3:39 pm

i am aware im reviving an old thread, however i did buy a Mesa Boogie not to long ago and thought i would chip in.

I bought mine from Billy Hyde, walked in told him i was paying cash today and took 11% off with the snap of his fingers. i dont think its fair to say that mesa is price fixing - im sure everyone lists the RRP to get the odd mum or dad who will pay full tote on something, but anyone clued up will generally know when buying high ticket items like that, there is almost always some playing room in price.

i looked at importing - but seriously if the amp screws up, i dare say it would cost more to fix. Pro Audio also charge a shitload for a new power transformer (and so they should) to stop people bringing them over themselves, and its a good couple of hundred for a good step down tranny.

I will also add that 3 to 4 months after i bought this, the economic crisis happened and the price dropped quite alot - down to $3600 im pretty sure - which is a little less than i paid for it which i was a little upset about hahaha. but thats the circle of life.

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Re: Shane's epic manifest on US vs Australia pricing

Post by noob_pwn » Sat May 08, 2010 11:28 am

mensis wrote:i am aware im reviving an old thread, however i did buy a Mesa Boogie not to long ago and thought i would chip in.

I bought mine from Billy Hyde, walked in told him i was paying cash today and took 11% off with the snap of his fingers. i dont think its fair to say that mesa is price fixing - im sure everyone lists the RRP to get the odd mum or dad who will pay full tote on something, but anyone clued up will generally know when buying high ticket items like that, there is almost always some playing room in price.

i looked at importing - but seriously if the amp screws up, i dare say it would cost more to fix. Pro Audio also charge a shitload for a new power transformer (and so they should) to stop people bringing them over themselves, and its a good couple of hundred for a good step down tranny.

I will also add that 3 to 4 months after i bought this, the economic crisis happened and the price dropped quite alot - down to $3600 im pretty sure - which is a little less than i paid for it which i was a little upset about hahaha. but thats the circle of life.
one of my best mates works at hydes parramatta and from what he has told
me you're very lucky as Mesa gear is never discounted - retailers aren't supposed to mark down Mesa
gear.
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Re: Shane's epic manifest on US vs Australia pricing

Post by daza » Sun May 16, 2010 11:35 pm

This is why man invented tax evasion. Not encouraging it though...

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Re: Shane's epic manifest on US vs Australia pricing

Post by KH Guitar Freak » Wed May 26, 2010 5:48 pm

noob_pwn wrote:
mensis wrote:i am aware im reviving an old thread, however i did buy a Mesa Boogie not to long ago and thought i would chip in.

I bought mine from Billy Hyde, walked in told him i was paying cash today and took 11% off with the snap of his fingers. i dont think its fair to say that mesa is price fixing - im sure everyone lists the RRP to get the odd mum or dad who will pay full tote on something, but anyone clued up will generally know when buying high ticket items like that, there is almost always some playing room in price.

i looked at importing - but seriously if the amp screws up, i dare say it would cost more to fix. Pro Audio also charge a shitload for a new power transformer (and so they should) to stop people bringing them over themselves, and its a good couple of hundred for a good step down tranny.

I will also add that 3 to 4 months after i bought this, the economic crisis happened and the price dropped quite alot - down to $3600 im pretty sure - which is a little less than i paid for it which i was a little upset about hahaha. but thats the circle of life.
one of my best mates works at hydes parramatta and from what he has told
me you're very lucky as Mesa gear is never discounted - retailers aren't supposed to mark down Mesa
gear.
Well, Music Park here moves quite a bit of Boogie gear, and they try and pass on the savings to the customers it seems...

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Re: Shane's epic essay on US vs Australia pricing

Post by guitarsatbmusic » Fri Jun 03, 2011 2:01 pm

Obviously things have changed quite a bit with the higher Aussie dollar, and many of our prices reflect that, as should other retailers, some don't because they have too many people working there that not one of them can do anything :)
Some things too bear in mind, however, when directly comparing, that have been shown in recent times.
Today, this:
For a permanent full time Level 1 Shop Assistant under the General Retail Industry Award 2010 in most states and territories this will mean an increase from $626.00 per week ($16.47 per hour) to $647.28 per week ($17.03 per hour).
What is the US minimum wage for a shop assistant? And that most certainly doesn't include another 9% for employer superannuation contribution

And Australian commercial shopping centre rent has been illustrated to be the second highest in the world.
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Re: Shane's epic essay on US vs Australia pricing

Post by guitarsatbmusic » Sat Jan 28, 2012 8:26 am

Here's something up to date for consideration:

http://www.numbeo.com/cost-of-living/co ... ted+States
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