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Why are prices so high in the US? (Read 2540 times)

Offline faulty_damper

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Why are prices so high in the US?
« on: April 05, 2015, 05:15:56 AM »
So a Kawai CA97 costs 340,00 in Japan.  That's $2,800USD.
Australia, $5000 AUD = $3800 USD.
Britain, 2400 = $3600 USD.
And the MSRP for the same piano in the US?  $5000 USD, nearly twice what it costs in Japan.

I can understand some increase in price due to transportation costs, but not that much.  Where does all that markup come from? Import duties and taxes?  Would it be cheaper to buy direct from Japan and have it shipped over?  Or is the increase in price to help out the struggling US piano dealers?

Offline j_menz

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Re: Why are prices so high in the US?
«Reply #1 on: April 05, 2015, 05:46:31 AM »
Possibly because of the recent rise in the value of the USD vs other currencies.

Using the Australian example, 12 months ago $1AUD =$1USD (more or less), so the prices were the same.

It's a temporary effect, by the way, as a result of stock being purchased at the old exchange rates. Over time, new stock will be bought with the appreciated dollar and prices on the floor should drop.
"What the world needs is more geniuses with humility. There are so few of us left" -- Oscar Levant

Offline chopinlover01

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Re: Why are prices so high in the US?
«Reply #2 on: April 05, 2015, 08:41:40 AM »
Inflation, and that often it's more expensive to buy out of the US to try to support local business so that we don't rely on foreign business.
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Offline indianajo

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Re: Why are prices so high in the US?
«Reply #3 on: April 05, 2015, 05:57:10 PM »
Opening any business in the US requires compliance with a lot of regulations.  You have to pay people to understand these regulations and write up "plans" and "audits" to stay in compliance.  Many of these regulations are on buildings, so just opening up a storefront is a significant expense.  Hence the rapid grown of e-businesses, which is  a model that does not apply to selling pianos.  Just the income tax regulations, my tax form this year runs to 14 closely spaced pages, not including some detailed and complicated 'worksheets" that I have to fill out and not turn in.  This is for somebody just above the poverty limit in income.  I've worked on my taxes on and off for three weeks, and I don't have to keep expense records or depreciation schedules over multiple years the way a business owner does.  You lose one piece of paper, you've lost that deduction.  And backing up computer hard drives is difficult and expensive, and now we have hacking of the labor saving computers.  You can't not connect an accounting computer to the internet to protect it; IP connection is required by the accounting package software, and also the microsoft op system.    
Then there is the right of US consumers to bring something back to the store.  A large percentage of any non-perishable product is brought back for a refund, not even for good reason in many cases.  Luxury products, I would expect those consumers to be even more particular.  A piano, moving it around is not a cost free enterprise, and often causes some irreparable damage.  The chance of a return happening has to be factored into the asking price.
Then there is service, which is an open ended responsibility of the dealer.  I've seen some stupid cost cutting tricks done by the service departsments on organs in the 1970's that I've bought in 2010-12.  I'm sure the cost of service is much more now with the highways slowed down by congestion.    
All these facts end up in the markup required for a store to stay in business.  We lost our Steinway dealer in my territory, and the new dealer of an import brand, I've been heard a story already about his service department.    

Offline chrisbutch

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Re: Why are prices so high in the US?
«Reply #4 on: April 07, 2015, 03:44:54 PM »
Opening any business in the US requires compliance with a lot of regulations.  You have to pay people to understand these regulations and write up "plans" and "audits" to stay in compliance.  Many of these regulations are on buildings, so just opening up a storefront is a significant expense.  Hence the rapid grown of e-businesses, which is  a model that does not apply to selling pianos.  Just the income tax regulations, my tax form this year runs to 14 closely spaced pages, not including some detailed and complicated 'worksheets" that I have to fill out and not turn in.  This is for somebody just above the poverty limit in income.  I've worked on my taxes on and off for three weeks, and I don't have to keep expense records or depreciation schedules over multiple years the way a business owner does.  You lose one piece of paper, you've lost that deduction.  And backing up computer hard drives is difficult and expensive, and now we have hacking of the labor saving computers.  You can't not connect an accounting computer to the internet to protect it; IP connection is required by the accounting package software, and also the microsoft op system.    
Then there is the right of US consumers to bring something back to the store.  A large percentage of any non-perishable product is brought back for a refund, not even for good reason in many cases.  Luxury products, I would expect those consumers to be even more particular.  A piano, moving it around is not a cost free enterprise, and often causes some irreparable damage.  The chance of a return happening has to be factored into the asking price.
Then there is service, which is an open ended responsibility of the dealer.  I've seen some stupid cost cutting tricks done by the service departsments on organs in the 1970's that I've bought in 2010-12.  I'm sure the cost of service is much more now with the highways slowed down by congestion.    
All these facts end up in the markup required for a store to stay in business.  We lost our Steinway dealer in my territory, and the new dealer of an import brand, I've been heard a story already about his service department.    
All the regulatory impediments you mention, and more, have their equivalents in the UK, but don't appear to have the same inflationary effect.

Offline faulty_damper

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Re: Why are prices so high in the US?
«Reply #5 on: April 07, 2015, 08:30:44 PM »
The CA97 is actually less expensive than the CA95, so the exchange rates must be dropping the price somewhat.  However, I suspect that the company is reluctant to price the newer model much cheaper than the old one.  I'll just have to haggle it down to $4000.