Global Price Increase

[Batwolf]

I remember when this happened to the Holbrook awhile back but the Frogskins probably have the biggest profit margin out of any pair, which is why I'm a little surprised about the price increase.

Re-release a product, create demand by suggesting "limited" production numbers, then adding hype on top of that for new releases. I guess it's business 101.

 

[MrMoonlight]

They are slowly trying to make prices even globally.

Truth be told, they already pretty much are. The big price differences you see in overseas markets is due to import tariffs and Value Added Taxes (sales tax).

When a price of something is listed in the U.S., it's the price excluding tax. That's because each state has its own tax rate. One state may not charge sales tax at all, while another might charge 8 or 9 percent. And depending on whether you purchase in-state or from outside the state border, the tax may or may not be charged.

Now, in a lot of other countries (like in Europe, for example) the sales tax (VAT) is levied nationally, i.e., it's the same rate for the entire country. So keep it simple and avoid confusion, the prices listed by retailers and online shops already include the tax and import tariffs. And in Europe, the VAT rates range anywhere from 18 to 25 percent depending on the country. So at first glance, the prices seem much higher for stuff overseas. But the much higher "sales tax" rate and then including it in the advertised selling price from the get-go makes it seem like things are way more expensive. The difference is really taxes, not necesarily the acutal wholesale price of the merchandise itself.

If you've managed to stay awake while reading this post...congrats. *yawn*

 

[OakleyRacer2132]

Truth be told, they already pretty much are. The big price differences you see in overseas markets is due to import tariffs and Value Added Taxes (sales tax).

When a price of something is listed in the U.S., it's the price excluding tax. That's because each state has its own tax rate. One state may not charge sales tax at all, while another might charge 8 or 9 percent. And depending on whether you purchase in-state or from outside the state border, the tax may or may not be charged.

Now, in a lot of other countries (like in Europe, for example) the sales tax (VAT) is levied nationally, i.e., it's the same rate for the entire country. So keep it simple and avoid confusion, the prices listed by retailers and online shops already include the tax and import tariffs. And in Europe, the VAT rates range anywhere from 18 to 25 percent depending on the country. So at first glance, the prices seem much higher for stuff overseas. But the much higher "sales tax" rate and then including it in the advertised selling price from the get-go makes it seem like things are way more expensive. The difference is really taxes, not necesarily the acutal wholesale price of the merchandise itself.

If you've managed to stay awake while reading this post...congrats. *yawn*

That's exactly why the prices are different. You should see me trying to explain that to foreign customers that come into my store here is the US. But its good for business here, tourists buy more here since its soo much cheaper.

It is kind of a bummer for the Frogskins though, they really only do well in my store because they are cheaper so the younger crowd can afford them. I guess not so much anymore.

 

[Deleted member 790]

Truth be told, they already pretty much are. The big price differences you see in overseas markets is due to import tariffs and Value Added Taxes (sales tax).

When a price of something is listed in the U.S., it's the price excluding tax. That's because each state has its own tax rate. One state may not charge sales tax at all, while another might charge 8 or 9 percent. And depending on whether you purchase in-state or from outside the state border, the tax may or may not be charged.

Now, in a lot of other countries (like in Europe, for example) the sales tax (VAT) is levied nationally, i.e., it's the same rate for the entire country. So keep it simple and avoid confusion, the prices listed by retailers and online shops already include the tax and import tariffs. And in Europe, the VAT rates range anywhere from 18 to 25 percent depending on the country. So at first glance, the prices seem much higher for stuff overseas. But the much higher "sales tax" rate and then including it in the advertised selling price from the get-go makes it seem like things are way more expensive. The difference is really taxes, not necesarily the acutal wholesale price of the merchandise itself.

If you've managed to stay awake while reading this post...congrats. *yawn*

There's just one problem with that reasoning. It's not true.
As an example I'll use Denmark (because that's where I'm from and that's where I've been selling Oakley products for the last four years.
If you deduct the VAT/sales tax from any pair of Oakley sunglasses they will still be more expensive than in the US (key here is, that we're comparing to the US. Canada isn't the best example, because the prices up here are very much like European prices.). As an example, take a pair of Inifinite Hero Frogskins; 130$ in the US plus sales tax (usually no more than 10%) = ~140$. Yes?
In Denmark, with our ridiculous sales tax of 25%, they're 200 USD. Take off the tax, and we're still paying 155$ for them. So even without taxes we're paying a premium.
Now, I don't know what your wholesale price is in the US, but the same pair (Infinite Hero Frogskins) costs 80$ wholesale here in Denmark. Our profit margin, with VAT/tax is 2.5. So every pair of Oakley that we, as a store, purchase, we multiply the wholesale price by 2.5 and sell them for that..
What would be interesting, is knowing wholesale prices in the US - that's when we will really know wether or not it's cheaper on the other side of the pond. Which I am pretty darn sure it is.

It's good for business in the US, but quite bad for business in Europe. And truth be told, that's the way it is. And I don't care because I can still by them for wholesale + tax.....

 

[MrMoonlight]

There's just one problem with that reasoning. It's not true.
As an example I'll use Denmark (because that's where I'm from and that's where I've been selling Oakley products for the last four years.
If you deduct the VAT/sales tax from any pair of Oakley sunglasses they will still be more expensive than in the US (key here is, that we're comparing to the US. Canada isn't the best example, because the prices up here are very much like European prices.). As an example, take a pair of Inifinite Hero Frogskins; 130$ in the US plus sales tax (usually no more than 10%) = ~140$. Yes?
In Denmark, with our ridiculous sales tax of 25%, they're 200 USD. Take off the tax, and we're still paying 155$ for them. So even without taxes we're paying a premium.
Now, I don't know what your wholesale price is in the US, but the same pair (Infinite Hero Frogskins) costs 80$ wholesale here in Denmark. Our profit margin, with VAT/tax is 2.5. So every pair of Oakley that we, as a store, purchase, we multiply the wholesale price by 2.5 and sell them for that..
What would be interesting, is knowing wholesale prices in the US - that's when we will really know wether or not it's cheaper on the other side of the pond. Which I am pretty darn sure it is.

It's good for business in the US, but quite bad for business in Europe. And truth be told, that's the way it is. And I don't care because I can still by them for wholesale + tax.....

Granted my example was a simplification but...
You didn't take into account import duties (anywhere between 1.5% and 3.5% depending on country) and the fluctuation in exchange rates of currencies. When the Dollar is stronger vs. the Euro, it's more expensive for Euro countries...when it's weaker, it's cheaper for them (though Denmark still does Krones, right? No Euro).
Take that into account, and that pretty much makes up the difference.

I would guess the international distributors probably take a cut as well. That would affect pricing, too.

 

[Ramslacrosse09]

Mr moonlight is dead on from what I leaned on all my international economics classes

 

[Deleted member 790]

Granted my example was a simplification but...
You didn't take into account import duties (anywhere between 1.5% and 3.5% depending on country) and the fluctuation in exchange rates of currencies. When the Dollar is stronger vs. the Euro, it's more expensive for Euro countries...when it's weaker, it's cheaper for them (though Denmark still does Krones, right? No Euro).
Take that into account, and that pretty much makes up the difference.

I would guess the international distributors probably take a cut as well. That would affect pricing, too.

True.. But matter of fact is, that it's still considerably cheaper for us Euros to go to the US and satisfy our Oakley addiction.
In regards to Kroner/Euro; the Kroner are tied together with the Euro - so when the Euro is strong the Krone is strong and the other way around.
None the less, I like that most everything (not only Oakley) is cheaper in the US.. I can't get a pair of Levi's jeans in Denmark for less than 120 USD.. So thank you for that

 

[Frogskins]

Was gonna pick up a pair of Jade lenses on the way home from work and called the O Store to confirm that they had in stock.

She said yes.

I said $55.00 - right?

She said no ... $65.00

:blink:

Not gonna pick em up after all ...

 

[Batwolf]

You probably got misquoted. Non-Hydrophobic Iridium lenses are $55.

 

[Frogskins]

You probably got misquoted. Non-Hydrophobic Iridium lenses are $55.

Thanks for the info!