Quote:
But this is a business call by John, because if not for his policies, the Japan retailers I used to frequent would have had to compete with say TTVJ or other international internet retailers on price. And having comfort that they won't need to compete with people outside of Japan is what incentivizes the Japan retailers to carry his product.
Breaking down the math (I think these are reasonable assumptions, I don't know what the breakdown is exactly),
For an SR-225, Grado maybe gets 50% of the "MSRP", or $100. To send that out to Japan and for a distributor there, that distributor would likely demand at least 25 - 50% of that, minimum, for their distribution.
Let's be extremely conservative and put that at $25. Additional shipping costs overseas, add another $15, then distribution within Japan, another $10.
So conservatively, it costs a Japanese retailer at least about $150, to compete against a bit under $200 + $25 shipping from TTVJ?
Why would the retailer do it? Even if they charge $220, that kind of margin is not consistent with Japanese audio sales, where margins are well over 100%. That's just their economics, based on their cost of carrying goods and general demand in the marketplace for these goods.
The retailers would sit it out and say no to Grado. Grado would not be displayed in stores in Japan and would lose sales/shelf space that way. I can't tell you how much that means in terms of sales, but I suspect having a physical presence in the high-end audio shops is the sort of thinking is what drives the policies.
Now why the margins are so insane in Europe, I have no idea. RS-1 going for more than a thousand does seem awful irrational to me. Even as overpriced as Japan is, RS-1 can be had for about $850 on the street. But based on my Japan experience, and prices there, the insane Euro pricing has more to do with what's going on specific in the European market than it does with John's policies.
We can analyze this in more depth and come up with a good economics rationale why it's not a good policy. But that's pretty academic. All I'm saying is that there is a rational (if simplistic) basis for the policy, and it is not one aimed at somehow screwing the customer.
BTW, SR-225 are about $300 - $350 in Japan, which is consistent with the margins/estimates I discuss above.
Best,
-Jason
| Originally Posted by greenhorn I chose to buy used. And Grado did not get anything from my buy. Had I found Grados here for prices comprable to the US, I would have bought new. And Grado would have benefit from my buy. And I'm not the only one. Get my point? |
But this is a business call by John, because if not for his policies, the Japan retailers I used to frequent would have had to compete with say TTVJ or other international internet retailers on price. And having comfort that they won't need to compete with people outside of Japan is what incentivizes the Japan retailers to carry his product.
Breaking down the math (I think these are reasonable assumptions, I don't know what the breakdown is exactly),
For an SR-225, Grado maybe gets 50% of the "MSRP", or $100. To send that out to Japan and for a distributor there, that distributor would likely demand at least 25 - 50% of that, minimum, for their distribution.
Let's be extremely conservative and put that at $25. Additional shipping costs overseas, add another $15, then distribution within Japan, another $10.
So conservatively, it costs a Japanese retailer at least about $150, to compete against a bit under $200 + $25 shipping from TTVJ?
Why would the retailer do it? Even if they charge $220, that kind of margin is not consistent with Japanese audio sales, where margins are well over 100%. That's just their economics, based on their cost of carrying goods and general demand in the marketplace for these goods.
The retailers would sit it out and say no to Grado. Grado would not be displayed in stores in Japan and would lose sales/shelf space that way. I can't tell you how much that means in terms of sales, but I suspect having a physical presence in the high-end audio shops is the sort of thinking is what drives the policies.
Now why the margins are so insane in Europe, I have no idea. RS-1 going for more than a thousand does seem awful irrational to me. Even as overpriced as Japan is, RS-1 can be had for about $850 on the street. But based on my Japan experience, and prices there, the insane Euro pricing has more to do with what's going on specific in the European market than it does with John's policies.
We can analyze this in more depth and come up with a good economics rationale why it's not a good policy. But that's pretty academic. All I'm saying is that there is a rational (if simplistic) basis for the policy, and it is not one aimed at somehow screwing the customer.
BTW, SR-225 are about $300 - $350 in Japan, which is consistent with the margins/estimates I discuss above.
Best,
-Jason
