Price Differences Between Regions

Discussion in 'Laser Class Politics' started by sailchris, Nov 14, 2007.

  1. sailchris

    sailchris Member

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    In a related thread, we were discussing the relative pricing between the US and Australia for Laser gear. The previous thread was closed by the administrators because the discussion mentioned a sponsor. This thread will not mention sponsors or dealers specifically.

    We have previously discussed the pricing of sails. We have not discussed why there is a price difference between regions. I would like to know why.

    For example I found both Hyde sails and North sails being sold for AU$1000 (which is US$922). A Hyde sail sells at APS for US$620 (or AU$696). That's a AU$226 difference!!! A North sail sells at APS for US$530 (or AU$595). That's a AU$405 difference!!!!!

    If the sails are made in Sri Lanka, why doesn't the price work out the same? More price fixing shenanigans? The shipping costs from the factories must be comparable. Is there a ridiculous import duty on sails brought into Australia (it seems that there is not; the tariff looks like 5%)?

    Why is there such a huge markup on sails in Australia? I understand that there is a GST (Goods and Services Tax) of 10% on goods and services sold in Australia. What about the other 10-30%?

    Even if I complied with the rules (i.e. the duty of 5% and GST of 10% was paid), I could still sell a North sail to an Australian sailor for less than US$700.

    Customs value (Cval) 595.00
    Customs duty (Duty) @ 5% of Cval
    International transport and insurance or postage via USPS (T&I) 40.00
    Value of the Taxable Importation (VoTI) (Cval+Duty+T&I)
    Goods and Services Tax (GST) @ 10 per cent of the VoTI 66.48
    Total payable (Duty + GST) 96.23
    Total Cost (Cval + Duty + GST + T&I) = 731.23

    So, in Australian dollars, the sail would cost AU$731.23. This is about US$650, and still a huge savings for an Australian sailor. If you assume that the Australian sailor would take care of the GST on their own tax returns, then the price would be about US$591.

    What am I missing here? It can't be this simple. Once I buy a sail from a dealer in the US, I own it. What is stopping me from shipping sails to individual sailors in Australia at a price of about US$600, which includes shipping and duty*?

    * Please note, I am thinking of this as a hypothetical for discussion purposes only.
  2. Deimos

    Deimos Member

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    Standard sail in the UK sells for US$800 (although you pay in £ sterling, I've converted it for ease of comparison) - that is for the slightly cheaper folded sail. It is available rolled which costs a bit more. Only the one available which I think people have said is a Hyde - though I might be wrong there.

  3. GBR 134

    GBR 134 Member

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    The sail available from PSE in the UK is definitely the Hyde sail. I assume from the same factory as supplies the US. (I thought Phillipinnes rather than Sri Lanka). It has always annoyed the hell out of me that the cost is so high. I have posted previously that my preference would be to continue with the current spec sail but force PSE into selling it at a reasonable margin over cost. The only justification I can see for the current pricing and regional discrepancies is that they are priced at 'what the market will bear'. As part of the market that does 'bear' the price I suppose I'm part of the problem - but that doesn't stop me being pissed off!

    At the end of the day PSE are in business and their natural inclination is to protect their turf and maximise profit. Whilst they control the Class Association we are stuck with it and for me this is an irritant that I'm prepared to live with whilst retaining the right to moan about the cost at every opportunity.
  4. madyottie

    madyottie Apprentice

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    While we're on this topic....

    About 2 years ago, the Topper class had similar markup to the Laser class, but once Rooster and a few others started making replica sails which everyone could use for practice, training, or just messing about, Topper got the idea, and dropped their prices to match. They also redesigned the sail from scratch.
    BTW, Topper is also strict one design, licensed sailmakers only etc.

    Now, you can buy topper sails for around £150, where as before they were about 300. Topper sells more and better sails, customers are happy, everybody wins!

    Why cant Laser do the same?
    If I can buy a replica sail for £220, why would I want to spend £420 on an inferior product?

    I need a new legal sail, because I race at higher levels, but I'll be buying another replica at the same time, for all my club racing.

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