ATC pricing (new, retail), US vs. UK, SCM 19v2

Discussion in 'Audio Hardware' started by mled, Feb 11, 2019.

  1. mled

    mled Well-Known Member Thread Starter

    Location:
    West Coast
    Can anyone explain to me the rather large price variance between the US retail, $4,000 vs UK £2,150 ($2,778) / pair, SCM 19 v2?

    In comparison, B&W pricing seems to be almost exactly the same in the UK as in the US.
     
  2. Brando4905

    Brando4905 Forum Resident

    Location:
    Marion, NC
    I would imagine the US distributor, Lone Mountain, gets a cut? Fairly large one? :) Then there’s shipping and US marketing to pay for, maybe? I also wonder if the packaging is different to make the trip.

    These are all just guesses on my part. I wish I could have bought mine in the UK!
     
  3. mled

    mled Well-Known Member Thread Starter

    Location:
    West Coast
    Ok, but other small manufactures also have US distributors and don’t seem to have such a high markup. For example Harbeth 7es3
     
  4. mled

    mled Well-Known Member Thread Starter

    Location:
    West Coast
    The. Retail UK price includes VAT. So I guess the us distributor is making some big margins. They have the right to make as much as they can, but not from me.
     
    timind likes this.
  5. daytona600

    daytona600 Forum Resident

    Location:
    UK
    £2150 & UK dealer will deduct the 20% Vat for export = £1,791 ( $2309 USD )
    add shipping & get them to declare value as used or under $750 to avoid import tax & job done for under $3,000
    or just wait until 29th of march & Brexit ( UK leaves the EU ) & sterling will drop 10-30%
     
    timind likes this.
  6. mled

    mled Well-Known Member Thread Starter

    Location:
    West Coast
    Daytntona600: yeah! Seriously thinking about that. I noticed Harbeth pricing is similar. I understand supporting a product outside the home country co$ts, but don’t manufactures worry about how their brand compares to even their own country’s competitors (ie other uk speaker companies)in the (US) market? Maybe the US is not a big enough market for them to be concerned, but with that (lack of) pricing strategy they have less of a chance to grow. Am I crazy?
     
  7. Hifi Kenny

    Hifi Kenny Well-Known Member

    Location:
    London
    LMFAO! I would not trust you to invest my money. Not even the worst Project Fear mongers have not come up with such blatant nonsense.Their post-referendum forecasts, especially those of the Bank of England and IMF, have proved to be pessimistic garbage. The recession has not materialised, the economy continues to grow despite the Bank of England's monetary policies.

    The financial markets are much more sophisticated. Brexit has been fully priced into the Pound-Dollar exchange rate since the referendum. If a UK-EU Brexit deal is agreed by Parliament, possibly by the end of this month, the Pound will rise against the Dollar and other currencies.

    I strongly advise Americans to take advantage of the current exchange rates whilst they can.
     
    Dubmart likes this.
  8. Black Elk

    Black Elk Music Lover

    Location:
    Bay Area, U.S.A.
    So, you would need to find a dealer who is prepared to do two questionable things. Firstly, there are usually rules in place to prevent parallel imports. Get caught and you lose the right to carry the brand (and potentially others depending on which company you irk). Secondly, under declaring the Customs value is illegal!

    Moreover, good luck trying to get warranty support!
     
    Brando4905 likes this.
  9. mled

    mled Well-Known Member Thread Starter

    Location:
    West Coast
    BlackElk- just looking on line real quick and there appear to be dealers for a several different UK brands that will ship out to points outside UK / EU and even show the price less 20% UK VAT. Now the few ATC dealers I checked out state “in store pickup only” etc., by no means a thorough survey...fair enough. In any case you can buy in the UK and get the VAT refunded at the airport before you go home. (I’m fortunate enough to get to Europe for business once a year)

    Personally I would never try to pull a fast one on US CBP by not being accurate about the value of the imports. But it looks like items that are less than $2k don’t get taxed and if it’s not for resale/ only personal use no duty is due (made myself laugh at the last line). Otherwise I believe the duty on speakers into the US is 4.9%. Shipping is probably $100 on a pair of bookshelf speakers. Again scm19v2 example: USA retail =$4k, UK = $2,310 + shipping, maybe small import duty.

    As far a warranty; it’s still under warranty in the UK even if the US distributor won’t honor it locally. In my limited experience UK stuff is usually well made; still using my UK made 805 matrix bought in 1993, never had an issue to this day.

    Digressing here - my point is this: Is the large $1k plus retail dif. On a $3k (uk) price speaker more than shipping, currency valuation, etc, for the distributor to make a good margin (don’t forget to deduct the 20% VAT from the UK price)? I don’t know, but the bigger UK mfgs (eG B&w 800 series) seem to be able to keep us vs uk pricing relatively the same.

    It would be ingesting to hear from a manufacturer and/ or importer on this subject. My guess is they do cause they can and the smaller UK speaker makers they represent are cool with it.
     
  10. Erik Tracy

    Erik Tracy Meet me at the Green Dragon for an ale

    Location:
    San Diego, CA, USA
    Unless you do hear from an actual manufacturer AND US distributor, we'll never really know what the explanation is.

    Maybe:
    * The US distributor had to buy or commit to a certain qty contract and the price agreed on was when the exchange rate was higher for the UK?
    * The US distributor is carrying inventory purchased at higher price (based on the exchange rates) so they can't or won't just drop the price relative to what the pound is now.

    I dunno. Maybe over time if the pound stays low(er) the US may see a price decrease.
     
  11. audiolab1

    audiolab1 Forum Resident

    Location:
    Ontario, Canada
    Simple shipping and distributor related mark up, along with any import taxes or duties. This is no different if you look at the cost of US manufactured audio equipment in Europe or the UK. Even after removing the VAT, the prices for US gear over there are MUCH higher. With B&W many of their products are not made in the UK, so you need to factor that into the equation, along with the fact that they are US owned.
     
  12. BIGGER Dave

    BIGGER Dave Forum Resident

    On a side note - this reminds me of the Swinging 60's, when guitarists in the UK wanted to get their hands on USA-made guitars and amps, like Gibson guitars and Fender guitars and amps, which were much higher priced in the UK than they were in the USA. Jim Marshall of Jim Marshall's Drum Shop in Hanwell, West London, saw an opportunity. Make amps similar to USA-made Fender amps right in the back of the drum shop, put a unique twist on these Hanwell-built amps (both sonically and visually), and cash in! Jim put Ken Bran and Dudley Craven to work, and the first Marshall guitar amp was born and the rest is history!
     
  13. mled

    mled Well-Known Member Thread Starter

    Location:
    West Coast
    Audiolab1: I think you are correct when you say”distributor related markup”. The difference in Harbeth and ATC pricing (just 2 examples I’m aware of) in the US vs. UK is too large to be currency related. I think if it were, we would see differences with all products: look at B&W 800 series (UK made) or Sonus Faber; much smaller differences Almost the same in some cases. To your point, both B&W and Sous Faber are US owned ( though both manufacture in the UK and EU, respectively) so maybe they are more directly interested in the US market.
     
  14. dianos

    dianos Forum Resident

    Location:
    Scandinavia
    Maybe it’s because of the wall?
     
    timind likes this.
  15. intensemojo

    intensemojo Well-Known Member

    Location:
    Chicago
    Call Music Direct. I did. My ATC SCM40s rock
     
  16. mled

    mled Well-Known Member Thread Starter

    Location:
    West Coast
    Yeah.
    The Wall
    I blame Pink Floyd and Geldof
    For not allowing reasonable US pricing on UK boutique speakers
     
  17. mled

    mled Well-Known Member Thread Starter

    Location:
    West Coast
    I bet those SCM40 kick ass. I just don’t understand the $2,000 premium to purchase them from a US dealer/US distribution system.
     
  18. Black Elk

    Black Elk Music Lover

    Location:
    Bay Area, U.S.A.
    Whether a dealer or distributor is allowed to sell outside their territory depends on the contract they have with the manufacturer -- assuming we are talking only of official dealers/distributors. Generally speaking, this is frowned on, as it acts as a barrier to attracting local dealers/distributors to carry the product (why should they bother if they are going to be undercut from somewhere else). Moreover, manufacturers can prevent 'mail-order' companies from selling the product either in a state or within a certain radius of an authorized dealer (this happens in the US!). Again, this is to even the playing field for the brick-and-mortar dealer who may have to compete with lower out of region pricing and no sales tax!

    I'm not sure what would happen if you walked into a UK store and bought an in-stock pair with cash. If you do not mention your plan, and they don't ask, I don't see any reason for them to not honor the purchase. I could see a red flag being raised if you paid by credit-card, but you could state that you are working in the UK for a period (a little white lie). However, this is a very different scenario than remote ordering.

    Yes, you can reclaim the VAT as you leave the country, but then the question becomes how do you get the speakers back to the US, and do you volunteer the real commercial invoice to pay all duties and taxes? I don't know where you got the figure of $100 to ship two 40 pound loudspeakers. Maybe you can get such a low rate if you send them via sea. Be sure to have all the paperwork in order (some companies offer this as an additional service) otherwise they will not clear Customs.

    You will have to accept the risk/cost of return to the UK should you need a warranty repair. This may not be such an issue for a passive pair of speakers, but is something to keep in mind.

    There are many factors in determining the price of goods in a foreign country. Erik Tracy touched on a number of them. It is not uncommon for a dealer/distributor to be expected to keep a certain number of units in stock at all times. One has to price in exchange rate fluctuations. Dealers have to buy floor models to demo the product. The distributor will typically handle warranty repair, to avoid expensive international returns. Distributors also sometimes handle translation services for all product materials, manuals, etc. (not necessary in this case, but is a factor for countries like Japan, China, etc.). All these things factor into the price (it isn't simply a case of converting the Sterling price to US dollars).

    Companies like B&W are an order of magnitude larger then the likes of ATC. They have long ago entered into international relationships which allows them to offer their products pretty much at the same prices everywhere, just like the consumer electronics giants do.

    You asked whether a $1k mark-up on a $3k speaker is justified. When I lived in the UK, the audio magazines often reported that UK prices for US goods (like Krell, etc.) converted the dollar price to pounds, and that was back when the pound was stronger. Even today, a dollar to pound conversion would be a 30% mark-up, so this ATC scenario is not that different.
     
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  19. mled

    mled Well-Known Member Thread Starter

    Location:
    West Coast
    Thanks for the insights Black Elk.
    I’m not in any rush to buy so maybe next time I’m in the UK I’ll visit a dealer and find out what they can do, or keep on the look out for 2nd hand pair.
     
  20. Brando4905

    Brando4905 Forum Resident

    Location:
    Marion, NC
    I was going to mention this. Not only does each weigh 40lbs plus boxing and packaging materials, but they are in separate fairly large boxes. So, two items to get through customs vs. just one.

    The warranty issue mentioned earlier is way valid. I seriously doubt the US distributor would honor or even help if the purchase was grey market or out of network.

    At first, I was a little shocked at the price difference once this subject was brought up. However, it seems it is just as I described in the first reply that the majority of the difference goes to the distributor. Now, looking back at all the reasons WHY the distributor gets this markup, it’s clear that its completely justified. I’m pretty sure Lone Mountain would offer a discount if asked, just like most friendly dealers. Also, as suggested by a poster further up in the thread, call MD, they most certainly will give a discount as long as you aren’t financing or have a trade.

    I will say this, at the asking price, even here in the US, the SCM19v2 is worth every penny. Very fine speakers.
     
  21. Hifi Kenny

    Hifi Kenny Well-Known Member

    Location:
    London
    @action_pact bought ex-demo Spendors from Analogue Seduction in the UK. They deducted the VAT and shipped to the US at a very reasonable cost. That firm sells ATC products- ATC Loudspeakers
     
  22. Black Elk

    Black Elk Music Lover

    Location:
    Bay Area, U.S.A.
    And all ATC speakers state:

    Available to buy and collect in-store only.
     
  23. Hifi Kenny

    Hifi Kenny Well-Known Member

    Location:
    London
    What dealers say publicly and do privately are very different in my experience. If you don't ask, you don't get.

    It depends upon whether you are a naive price taker or a savvy deal maker.

    BTW, they have the same statement re Spendors but Action Pact got a great deal on his ex demos.
     
    timind likes this.
  24. Black Elk

    Black Elk Music Lover

    Location:
    Bay Area, U.S.A.
    Then they run the risk of losing the product lines!
     
  25. Hifi Kenny

    Hifi Kenny Well-Known Member

    Location:
    London
    Depends on the deal with the manufacturers and distributors. Have you seen the contracts? If not, it's just speculation.
     

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