I will give you a clear example. If I were to buy let's say a BCD-3 CD player, it would cost me less to buy it in California for 2400 USD, have it shipped across the Atlantic, pay 25% VAT and 8% import duty than to buy it here for 4500 €. Even if I wanted to buy it at these terms, the dealer would first try to convince me to buy something else. I wouldn't spend any less - it would still cost me 4500 € - but they would make a whole lot more from the trade if I bought an equivalent product from a brand the dealer shouldn't even be carrying and selling "under the counter".
A friend of mine is a distributor and a dealer for a famous headphone brand. He has been given a specific set of rules what he is allowed to sell alongside that brand. If he wishes to remain their distributor, this is precisely what he must do. So, apart from a small selection of other headphone brands that do not represent competition for this brand, you will not find any other headphones in his store. Also, a pricelist he's been given is a good guideline for him to form his own prices upon but there are limits to what he is allowed to charge, at both ends of the spectrum. Then there are other rules concerning service etc. but we are not talking about that here.
This "squabbling" isn't doing any of us any good. The prices are too high and the service is substandard.
Please do not think I am speaking generally because I am not. I am being very specific, as usual, and this does not apply to all distributors or dealers. It is something to think about.
Cheers,
Antun
I do not think this is about greedy distributors and my experience with the service via AVITech in Vienna is excellent.
What is causing the price differences between North America and the rest of the world is Bryston‘s pricing model. I assume that it is „cost plus“, i.e. Bryston calculates what it costs to build a product that is worth it to carry the Bryston label, adds some for warranty, administration and profit and you get the dealer‘s price. Add another, say 50%, for the dealer and you end up at North American MSRP.
Disclaimer: The figures are guesses, as I don‘t know what the margins are, but they still are useful to make my point.
In my example a product with a MSRP of $US 6,000 would have dealer pricing of $US 4,000.
Now an international distributor might buy Bryston stuff more or less at North American dealer pricing, as Bryston still needs to cover their cost and make a reasonable profit. Maybe Bryston gives a distributor discount of 10% as North American marketing and distribution cost are not applicable to export merchandise.
So a distributor would pay $US 3,600. Now add shipping, and consider that we don’t talk about overseas containers filled with Bryston stuff shipped around the world, but single units, built to order and shipped via air freight. This easily eats up most of the distributor discount. Add import tariffs, the cost of the distributor and another dealer margin and a buffer for exchange rate fluctuations and you end up considerably above US MSRP. Add local sales tax, e.g. around 20% in most of Europe, and yes, the MSRP IS considerable higher outside of the US.
I do, however, not see how this could be changed without reorganizing North American distribution and adversely affecting Bryston’s market position in its most important market.
Another 2 Cents…
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