[karn1911]

Hmmm RE2's at Marcus's site for $99 shipped..
That is quite tempting.

It is a shame that the shop is located in perth, it is always such a disappointment getting gear from overseas to find they are not to your taste. I know if they opened up a store here in Sydney I would be a regular visitor.

 

[Yikes]

The fact is that Grado doesn't have the margin to give international distributors (Your local importer) much additional discount over the US dealer price.

The local distributor usually has to order fairly large quantities, so they have an investment in inventory. So when buying Grados anywhere except the US there are more hands in the pot. Grado get their profit, the importer gets their profit, then the dealer gets theirs. Add to that shipping, import duty, and your local VAT and what you get is much more than it is here in the US.

If you don't like it buy a headphone manufactured in your home country.

 

[sashmo]

Seems that I'm missing something here. Are some of you saying that I should buy locally,albeit online, for $150, when I can buy from overseas, again online,
for $105? Check out the price differential on other brands while you're at it...the Alessandro's are the best case scenario!
Yikes..you say "the fact is...." Is that correct? You know that for a fact?
I doubt it.
Marcus... I didn't start my thread as a gob off at you. In fact the only time I mentioned you was in a reasonably positive way. IMO you provide the best service and deals available to those who don't do the www thing. Good luck to you. You did a great job stating your view as well.
Luckily there are plenty of members willing to share good advice and these I thank.
Peace

 

[Yikes]

Quote:

Originally Posted by sashmo /img/forum/go_quote.gif Yikes..you say "the fact is...." Is that correct? You know that for a fact? I doubt it.

Yes, actually I do, and go ahead and doubt it all you like.

 

[spronkey]

I don't think it's quite as simple as that Yikes. Sure there are more hands in the pot - but it's only one additional step. Grado has to ship them to the distributor or store regardless. The distributors are making a killing on Grados overseas, especially here in NZ where they are sold for well in excess of DOUBLE the US price.

As an example, it costs $38 US to ship a single pair from the USA to New Zealand, yet Grado SR-80s here sell for $200US FROM THE DISTRIBUTORS.

Given the bulk discount they would be getting on a) the cans and b) the shipping, that's probably 100% markup from the distributors...

 

[Yikes]

It's my business. It's what I do. Some manufacturers do give a significant discount (over domestic dealer cost). These manufacturers take much lower margin (On foreign sales) in order to gain overseas market share. Others only sell at dealer cost. This means that someone importing the product is paying more than the domestic dealers do. There's duty (Which depending on the country can be substantial) and all shipping costs (including brokerage fees that an individual shipping or receiving a single item often avoids).

Then the importer pays for local marketing (if any).

Example product A
US Retail $100
US Dealer Cost $60
With nominal domestic shipping, let's say $6.00
So the dealers cost is $66
If they sell it for retail (Seldom) their Gross margin is 34 points. (I won't even get into Net profit, which most people never even consider)

If the importer pays the same as a US dealer.
Cost $60
Duty (typical 10%) $6.00
Brokerage fees (variable, but typically $50 to $500 per shipment) let's say it adds $5.00
Shipping - let's be Conservative and say $10

So this makes landed cost at $81

If the importer makes the same margin as the US dealer that means that he will make his dealer cost $123

Then if the dealer makes the same margin they would sell the item for $187

Now let's throw in a 15% VAT and it comes to a whopping $215

Now let's consider why some companies don't offer extra discounts to their international distributors.

It's very difficult to enforce geographic restrictions on international distributors. When every little country has an importer there usually are a few greedy ones who break the agreement and sell directly to customers in other countries. Since these importers get an extra discount because they are an importer and presumably sell thru a dealer network when they break the agreement and sell directly to consumers in other countries they can afford to give them a big discount (and still make good margin). This is the usual source of Grey Goods.

The problem is that if consumers can buy from overseas for significantly less than they can from a local dealer they usually do so. Soon the dealer realizes that they can't profitably sell the product and they stop carrying and demoing it. This ultimately causes the domestic dealer network to dry up. Soon consumers can't find anywhere to demo the items so the sales fall.

The reason that consumers in the US can find dealers that show and sell Grado is because they have their existing pricing structure.

It's just the model that Grado uses. I happen to applaud them for it. It's fairly easy to find grado at local Hi-Fi stores in the US. This means that the consumer has a chance to hear them before buying. This dramatically increases the likelihood that they will enjoy, like and keep their new toy.

 

[Beefy]

Quote:

Originally Posted by Yikes /img/forum/go_quote.gif The problem is that if consumers can buy from overseas for significantly less than they can from a local dealer they usually do so. Soon the dealer realizes that they can't profitably sell the product and they stop carrying and demoing it. This ultimately causes the domestic dealer network to dry up. Soon consumers can't find anywhere to demo the items so the sales fall.

This would be all well and good...... IF it were easy to demo Grado anywhere else in the world. But this is NOT the case.

In Australia for example, there is one single store in Melbourne that carries them; no brand presence whatsoever. If they stopped carrying them because people were importing, it would make absolutely no difference at all. Indeed, I would argue that MORE would be sold in Australia, because net prices would be significantly lower on direct imports.

 

[Yikes]

OK I'll spell it out. For many companies (and from all appearances Grado is one of them) the US market is what matters to them the most. Grados emphasis certainly appears to be the US market.

Is it fair? hardly, but since they are a US company it's hardly a surprise.

 

[Beefy]

Quote:

Originally Posted by Yikes /img/forum/go_quote.gif OK I'll spell it out. For many companies (and from all appearances Grado is one of them) the US market is what matters to them the most. Grados emphasis certainly appears to be the US market.

For someone in the business, you certainly don't understand your customers.

I, and many others, would actually prefer that Grado exclusively serviced the US market....... then they could just let their US sellers sell worldwide directly. It is the international distributor agreements that are killing their sales outside the US, for no benefit to anyone - except for a few very select people close to the very limited stores that carry them.

Honestly, if they can do it by proxy with different products through Alessandro, why not their own product line? It is just silly.

 

[Yikes]

and who would provide after sale service in your world? Distributors handle local service issues. Can a dealer on the other side of the world really provide quality after sale support?

 

[gz76]

Quote:

Originally Posted by Beefy /img/forum/go_quote.gif Honestly, if they can do it by proxy with different products through Alessandro, why not their own product line? It is just silly.

Interesting point.

 

[Beefy]

Quote:

Originally Posted by Yikes /img/forum/go_quote.gif and who would provide after sale service in your world? Distributors handle local service issues. Can a dealer on the other side of the world really provide quality after sale support?

Alessandro, Alessandro, Alessandro. If it is good enough by proxy, then why not for Grado directly?

Further, if the distributor isn't in your home town (as would be the case for the VAST majority) then what difference does it really make? You still have to ship it back and forward in any case.

 

[yen10]

Quote:

Originally Posted by Caution /img/forum/go_quote.gif This site really does look appealing... Hrmm Might try and import a guitar >:] ps. All forms of beer suck *Edit* Oh here we go theres a link to a thread on whirlpool from the price usa site, it seems like they have great service. Is priceusa.com.au safe?? - On the internet - Whirlpool Broadband Forums

When I was studying overseas, I used Shipito to get stuff shipped from the United States. It is surprisingly cheap to use their services and I never had a problem.

 

[Drubbing]

NVM didn't relaise this was so old...

 

[kakapo]

Gidday Drubbing

I remember going through this when I got my RS1s - the Grado restrictions weren't on then, so I avoided the inflated domestic price by going to Headroom.

If you set up monopolies outside the US its pretty predictable what their prices will be like