Indian and International Pricing

[mridulgoel]

The UK price was the MSRP including VAT - the WhatHiFi review price (not a 'discounted exchange price'). The VAT refund process in the UK is well established - anyone who has travelled there frequently would know how to use it. You dont get the full VAT amount but for large purchases (200+), you get a substantial chunk. There is a special desk at the passenger departure lounge for this. All you need to do is get a VAT refund receipt from the retailers when purchasing the product.

Whether you chose to believe me or not is your choice. Just because you price your products reasonably doesnt mean that other dealers will too.

Jai do me a favour...

Next time, get a product worth Rs.40,000 your billing, and as you say on MSRP...and apart from that purchase one product for Rs.25K...
Get your VAT claimed...

Then land up in India,
and when you pay customs Duty on Rs.40,000 product...
You will land up just saving VAT.. nthing else...and will loose warranty as well...

Y i told you to get Rs.25K product extra is, as we get duty free for products upto Rs.25,000...

 

[jai1611]

@Mridul, I think we can agree to disagree on this. I travel overseas about twice a quarter these days so have a fair bit of experience carrying things into India.

I still prefer to get audio equipment from Indian dealers/distributors as I value the service aspect (till date I have never imported a piece of hi fi equipment which has adequate representation in India except a pair of interconnects and miscellaneous DIY parts). Wherever I feel the pricing is atrocious, I seriously consider skipping the product altogether. My feeling is that if a distributors is being greedy in pricing, he will probably be even more greedy in service where he knows that the customer doesn't have the option to walk away. So unless a product is truly excellent and represents good value to me even at the inflated price, I look for other alternatives. This is purely a personal point of view and I suspect most people dont share this sort of pricing based prejudice.

 

[kapvin]

Re: Clarification and Explanation

I agree. I dont want to derail this thread, but will point out an anomaly all the same - I have always wondered why Indian pricing takes the USA/UK MRP as base price and adds customs/Excise/VAT etc, when the US/UK price includes shipping from HK or China to USA and their local taxes and duties + local dealer margin!!!

Does not a manufacturer have a uniform global base price, that excludes the markup in retail price in USA/UK (that includes the dealer margin etc) and based on which Indian customs, shipping and local excise can be fairly computed ?

Regards

http://www.hifivision.com/sale-deal...0i-series-demo-product-sale-3.html#post126431

@gobble,

I did bring this up in a seperate thread. Thanks for bringing this up so succintly in this thread as well.

@mridul goel, your post on cost build was interesting, could it be that it's hiding more than it's revealing? i really don't want to get into a "you said" versus "I said" debate here, but have you really factored in all subventions/ incentives, and in full measure? in any case, as gobble pointed out, this at best would be a british manufactured product and would not apply to anything made in china. taiwan/ far east (most brands). also i dunno if you are aware that the british government has certain "financial advantages" for firms exporting outside the EU..

your post makes me wonder about the business model of the hifi retailers in India.

if large format high traffic stores such as Big bazaar etc work on a minimum mark down of 20% (ie mark up of 25%), I wonder how a smallish bespoke hifi product store could survive on a 20% mark up (especially if they give up 10%)
even at 20% margin, a typical smallish retailer would need to do a turnover of 8 lakhs per month just to pay the rent (1.6lakhs per month rental); another 4 lakhs to pay the electicity bill, another 2-3 lakhs to pay employee costs, (Salesmen, security, peon). thats about 14-18 lakhs per month before he can even think of feeding himself. double that turnover for a reasonable profit. 30-35 or 70 lakhs if he reallly gives up 10%. somehow the stores I've visited do not seem to have the traffic to generate that much business (or am I wrong?). which would mean the margins (or margins + incentives) are higher?

@mridul, no offence, please do correct me wherever i am wrong!

cheers

Kapvin

 

[gobble]

Re: Clarification and Explanation

I agree! Isn't it rational for manufacturers to publish prices based on dispatching distribution point for a continent/group of countries? Then computing freight & local duties for a destination country would be straightforward, and funny business would be minimised.

So for a given manufacturer:

If India is being supplied from e.g. China, then our end-user price would be the Chinese-origin Base Price + Freight China>India + Indian customs duty etc.

If Canada is being supplied from Mexico, then their end-user price would be Mexico-origin Base Price + Freight Mexico>Canada + Local Canadian levies

Ah, pipe-dreams...

Another good point. Not sure how many HiFi manufacturers have multiple manufacturing locations. In any case, goods shipped from HK or China should be cheaper in India than in US shouldn't they?

Regards

 

[gobble]

Re: Clarification and Explanation

http://www.hifivision.com/sale-deal...0i-series-demo-product-sale-3.html#post126431

@gobble,

I did bring this up in a seperate thread. Thanks for bringing this up so succintly in this thread as well.

@mridul goel, your post on cost build was interesting, could it be that it's hiding more than it's revealing? i really don't want to get into a "you said" versus "I said" debate here, but have you really factored in all subventions/ incentives, and in full measure? in any case, as gobble pointed out, this at best would be a british manufactured product and would not apply to anything made in china. taiwan/ far east (most brands). also i dunno if you are aware that the british government has certain "financial advantages" for firms exporting outside the EU..

your post makes me wonder about the business model of the hifi retailers in India.

if large format high traffic stores such as Big bazaar etc work on a minimum mark down of 20% (ie mark up of 25%), I wonder how a smallish bespoke hifi product store could survive on a 20% mark up (especially if they give up 10%)
even at 20% margin, a typical smallish retailer would need to do a turnover of 8 lakhs per month just to pay the rent (1.6lakhs per month rental); another 4 lakhs to pay the electicity bill, another 2-3 lakhs to pay employee costs, (Salesmen, security, peon). thats about 14-18 lakhs per month before he can even think of feeding himself. double that turnover for a reasonable profit. 30-35 or 70 lakhs if he reallly gives up 10%. somehow the stores I've visited do not seem to have the traffic to generate that much business (or am I wrong?). which would mean the margins (or margins + incentives) are higher?

@mridul, no offence, please do correct me wherever i am wrong!

cheers

Kapvin

Good point in both the posts Kapvin. Such a discussion is bound to cause dealer discomfort. However the thing dealers should note is - we wont really care about the internal trade secrets if the pricing were more or less on par with International.

I am sure the market potential for 2 channel Hifi is largely untapped largely due to pricing, because nobody has taken the challenge yet to mass market audiophile quality goods in India. Just look at all the TV music programmes in our country, with so many music lovers, and disposable income rising, all that is needed is for somebody to usher in a pricing revolution through a new distribution model.

Regards

 

[odyssey]

Re: Post 24

Answer is, it depends No, I am not trying to be a smart ass - here is one reason (we actually ran into this reason). Many manufacturers get their stuff made in China, however not all factories are authorized (by the gov) to ship to any location other than the contracting company. Furthermore, manufacturing tests are not always done in China. The company may go to the trouble of shipping the product from China if the volume is sufficiently high directly to the destination, however the problem of whether export can directly be made still applies. The reason (what I was given) is that manufacturing license is easy to get, however the export license is much harder to get and the company has to undergo greater scrutiny/checks. I dont know if this is true or not but the net affect was that the parent company refused to ship to India unless the volume was in 500's :sad:

cheers

 

[odyssey]

Re: Clarification and Explanation

Perhaps this post was meant for Mridul to answer - he can still do that. I have a different take on costs -
please consider the following -

Rs 1.6 La per month rental - fine (depends on the city and location, but lets stick to this)
4 La per month for Electricity bill? Sorry,
2-3 La per month on salaries? Sorry

If costs were 8 La per month, I can tell you that there would be no dealer left in the country. I wont get into a lot of stuff about costs since I have posted here in the past, however there is something common across many of the dealers/distributors in this country - that for a substantial number of them - there is a second/primary source of income. Very few people seem to be doing this business as a primary source. I could be wrong - its just an observation that I have had. Either that or they have some fixed costs (like good retail space) already paid for - inherited/ancestral property, whatever.

cheers

http://www.hifivision.com/sale-deal...0i-series-demo-product-sale-3.html#post126431

@gobble,

I did bring this up in a seperate thread. Thanks for bringing this up so succintly in this thread as well.

@mridul goel, your post on cost build was interesting, could it be that it's hiding more than it's revealing? i really don't want to get into a "you said" versus "I said" debate here, but have you really factored in all subventions/ incentives, and in full measure? in any case, as gobble pointed out, this at best would be a british manufactured product and would not apply to anything made in china. taiwan/ far east (most brands). also i dunno if you are aware that the british government has certain "financial advantages" for firms exporting outside the EU..

your post makes me wonder about the business model of the hifi retailers in India.

if large format high traffic stores such as Big bazaar etc work on a minimum mark down of 20% (ie mark up of 25%), I wonder how a smallish bespoke hifi product store could survive on a 20% mark up (especially if they give up 10%)
even at 20% margin, a typical smallish retailer would need to do a turnover of 8 lakhs per month just to pay the rent (1.6lakhs per month rental); another 4 lakhs to pay the electicity bill, another 2-3 lakhs to pay employee costs, (Salesmen, security, peon). thats about 14-18 lakhs per month before he can even think of feeding himself. double that turnover for a reasonable profit. 30-35 or 70 lakhs if he reallly gives up 10%. somehow the stores I've visited do not seem to have the traffic to generate that much business (or am I wrong?). which would mean the margins (or margins + incentives) are higher?

@mridul, no offence, please do correct me wherever i am wrong!

cheers

Kapvin

 

[myriad]

Re: Clarification and Explanation

I wont get into a lot of stuff about costs since I have posted here in the past, however there is something common across many of the dealers/distributors in this country - that for a substantial number of them - there is a second/primary source of income. Very few people seem to be doing this business as a primary source. I could be wrong - its just an observation that I have had. Either that or they have some fixed costs (like good retail space) already paid for - inherited/ancestral property, whatever.

cheers

We hardly have four dealers in Kolkata who deal in HiFi. Out of these four dealers three dealers get their major earnings from other business than HiFi.
Vasu

 

[kapvin]

Re: Clarification and Explanation

Perhaps this post was meant for Mridul to answer - he can still do that. I have a different take on costs -
please consider the following -

Rs 1.6 La per month rental - fine (depends on the city and location, but lets stick to this)
4 La per month for Electricity bill? Sorry,
2-3 La per month on salaries? Sorry

If costs were 8 La per month, I can tell you that there would be no dealer left in the country. I wont get into a lot of stuff about costs since I have posted here in the past, however there is something common across many of the dealers/distributors in this country - that for a substantial number of them - there is a second/primary source of income. Very few people seem to be doing this business as a primary source. I could be wrong - its just an observation that I have had. Either that or they have some fixed costs (like good retail space) already paid for - inherited/ancestral property, whatever.

cheers

read the mail before challenging.. i said that sale needs to be 8 lakhs a month to just cover costs. do you challenge that?


these costs are for a mumbai suburb... and very conservative estimates

4 lakhs of sale @ 20% margin to support the electricity bill == 80k? show me one 1000sq ft retail establishment that does not need that much of a bill (given AC, retail lighting, doors opening and closing) ..

2-3 lakhs of sales to support salaries @ 20%= 40-60k.. do you challenge that? - 3-4 guys at an average on 12-15k? i guess you want a guy who can converse in english and pick up enough understanding of hifi to converse semi-intelligently with customers?


nice homily.. based on a completely inaccurate take of the mail.. do you do the mark up calculations the same way?


this does not even cover other very simple things like cost of capital, opportunity costs, "hygiene payments". and please, please do NOT insult everyone's intelligence by saying that people do this for purely altruistic reasons. a very small minority maybe.. but everyone else is in this for money & profit. Come on, even bored housewives of the captains of the industry make money from their NGOs.. (there are a huge numbers of genuine NGOs, but I gues you'll know which ones I am talking about)

and ANY businessman will weigh opportunity cost, cost of capital versus return before investing..

for "ancestral property" - if it's vacant commercial space.. it's a simple decision, will the return (net profit) from the retail outlet cover the money i would make by simply giving it on leave and License plus the expectation I would have from a full time job?

if it's residential space.. your "hygiene costs" shoot up - every local government employee - police, muncipality, electricity will be visiting whenever they feel short of pocket money..


while I may not be in the Consumer Electronics business.. I have a pretty good handle on trade and of people in trade ;-)

To misquote shakespeare's "Hamlet" -- "methinks doth protest too much"

sorry for the sarcasm. but read mails completely before jumping on a high horse.

 

[spirovious]

Re: Clarification and Explanation

How did you bargain on a website? Called them?

curious

cheers

I contacted through ebay.(PM)There was a option for customer to offer price.
I offered 60pd & system accepted.Then calculated extra cost of shipping(15pd).
Dealor agreed for 60pd if collected from his shop.Earlier he refused & ask 70,but sending PM worked.Now lets see if Uncle gets it.

 

[odyssey]

Re: Clarification and Explanation

Hi
You are right, I went over it carefully, I made a mistake in how I read it. My apologies.
Actually, I am not trying to give anyone any sermon, a lot of these discussions have taken place in other threads on this forum, so it becomes repititive of me to post the same info, a simple search through the forum should yield the older threads. I am also not trying to imply altruistic behavior of all dealers here. I simply posted my observation based on what I have seen. There was another poster posted after me, he seemed to have observed the same thing. Well this discussion can go on, frankly I had the same picture of the market and dealers before I got into this. My antenna would be up every time I walk into an electronic store, it still does. Somewhere this distrustful nature of the dealers (probably doesnt matter whether its audio or rice or something else) is always going to be a part of the our thinking, perhaps this extends to what we feel of any retail businessman (....oh this guy is making lots of money and is out to rip us off). There are problems on both sides - dealers as well as customers, the thing is the Indian market is not an easy one, in addition, gov policies of almost 50% in duties and VAT dont make it easy.

cheers

read the mail before challenging.. i said that sale needs to be 8 lakhs a month to just cover costs. do you challenge that?


these costs are for a mumbai suburb... and very conservative estimates

4 lakhs of sale @ 20% margin to support the electricity bill == 80k? show me one 1000sq ft retail establishment that does not need that much of a bill (given AC, retail lighting, doors opening and closing) ..

2-3 lakhs of sales to support salaries @ 20%= 40-60k.. do you challenge that? - 3-4 guys at an average on 12-15k? i guess you want a guy who can converse in english and pick up enough understanding of hifi to converse semi-intelligently with customers?


nice homily.. based on a completely inaccurate take of the mail.. do you do the mark up calculations the same way?


this does not even cover other very simple things like cost of capital, opportunity costs, "hygiene payments". and please, please do NOT insult everyone's intelligence by saying that people do this for purely altruistic reasons. a very small minority maybe.. but everyone else is in this for money & profit. Come on, even bored housewives of the captains of the industry make money from their NGOs.. (there are a huge numbers of genuine NGOs, but I gues you'll know which ones I am talking about)

and ANY businessman will weigh opportunity cost, cost of capital versus return before investing..

for "ancestral property" - if it's vacant commercial space.. it's a simple decision, will the return (net profit) from the retail outlet cover the money i would make by simply giving it on leave and License plus the expectation I would have from a full time job?

if it's residential space.. your "hygiene costs" shoot up - every local government employee - police, muncipality, electricity will be visiting whenever they feel short of pocket money..


while I may not be in the Consumer Electronics business.. I have a pretty good handle on trade and of people in trade ;-)

To misquote shakespeare's "Hamlet" -- "methinks doth protest too much"

sorry for the sarcasm. but read mails completely before jumping on a high horse.

 

[kapvin]

Re: Clarification and Explanation

Hi
You are right, I went over it carefully, I made a mistake in how I read it. My apologies.
Actually, I am not trying to give anyone any sermon, a lot of these discussions have taken place in other threads on this forum, so it becomes repititive of me to post the same info, a simple search through the forum should yield the older threads. I am also not trying to imply altruistic behavior of all dealers here. I simply posted my observation based on what I have seen. There was another poster posted after me, he seemed to have observed the same thing. Well this discussion can go on, frankly I had the same picture of the market and dealers before I got into this. My antenna would be up every time I walk into an electronic store, it still does. Somewhere this distrustful nature of the dealers (probably doesnt matter whether its audio or rice or something else) is always going to be a part of the our thinking, perhaps this extends to what we feel of any retail businessman (....oh this guy is making lots of money and is out to rip us off). There are problems on both sides - dealers as well as customers, the thing is the Indian market is not an easy one, in addition, gov policies of almost 50% in duties and VAT dont make it easy.

cheers

Shridhar,

fair enough! My apologies if I came on so strong!

my issue is not fair profit, everyone is entitled to that, my livelyhood depends on my company selling products at a profit.

My issue is the attitude of "we are not making any money/ there are no margins in this business" being hawked ad nauseum and old EOL products being given to us at full price / close to full price.

take care!

Kapil

ps - look forward to visitng your showroom, when I am in bangalore next month

 

[Thad E Ginathom]

I'm completely baffled by the detail in this thread, but, from square one;

No User Should be allowed to disclose the prices they got the particular product @, specially the exact amount

You mean that if I buy something I should not reveal the price I paid for it?

It seems so unlikely, if not impossible, that this is what you meant, that I think I must have misunderstood. This is shopping we're talking about, right? I bought a pack of chips, Rs.n; I bought an amplifier, Rs.n,000. Nothing in the least "confidential" about either transaction: cannot possibly be.

But then... I still think I must have misunderstood.

I'm sure I misunderstand the whole thing about pricing too. Every dealer in the world buys from a distributor, who buys from an importer, who buys from a manufacturer. Give or take a link in the chain, what's the difference if that dealer is in Birmingham or Chennai?

ok... there are differences in certain instances. Richer Sounds owns Cambridge Audio; they also sell in vast quantities: would I expect to buy a Cambridge Amp in Chennai at the same price as at a Richer Sounds branch in UK? No.

 

[anm]

it's very difficult to be at Sridhar's showroom when you are on a trip to b'lore :lol:

 

[alcy]

I'm completely baffled by the detail in this thread, but, from square one;
You mean that if I buy something I should not reveal the price I paid for it?

It seems so unlikely, if not impossible, that this is what you meant, that I think I must have misunderstood. This is shopping we're talking about, right? I bought a pack of chips, Rs.n; I bought an amplifier, Rs.n,000. Nothing in the least "confidential" about either transaction: cannot possibly be.

But then... I still think I must have misunderstood.

I'm sure I misunderstand the whole thing about pricing too. Every dealer in the world buys from a distributor, who buys from an importer, who buys from a manufacturer. Give or take a link in the chain, what's the difference if that dealer is in Birmingham or Chennai?

ok... there are differences in certain instances. Richer Sounds owns Cambridge Audio; they also sell in vast quantities: would I expect to buy a Cambridge Amp in Chennai at the same price as at a Richer Sounds branch in UK? No.

The suggestion that Mridul made has been also made by another dealer (not on the forums). It came from another dealer in Delhi (who is also well-respected/well-known here). According to that dealer, its about changes in prices that they ask customers not to share the quotes/prices. I got an X amount of "discount" only because I had already seen a quote/price of a particular product here on the forums, and the dealer had to oblige because it was from his shop only that the product discussed at the forums was bought. I don't know how much truth was there in the reason given, but then since I eventually did get a good price, I didn't ask much.

I also hope Mridul can shed some light on the issue.

 

[Thad E Ginathom]

Dealers, meet internet.

You have nowhere to hide.

 

[alcy]

Exactly !

I was about to post the same, after taking into consideration how dealers on other tech-forums related to lets say, the field of computers & IT products, work. All prices and deals on the forums, openly discussed, open feedback, fair discounts to all, same deal for everyone, smooth operations !

I really appreciate Mridul, odyssey(Sridhar?) and other dealers being active on the forums providing technical as well as price-related assistance.

It would be awesome if they used the dealer section more effectively though. For eg., recently Mridul posted the Q Acoustics offer.

Now, I would want the whole catalog up on the forums for everyone to view and decide for themselves ! Prices in front of you, in the open. Price lists can be updated taking into account the necessary adjustments(taxes/change in currency value etc.). No special discounts for particular people, fair deals to all. People can order from abroad or elsewhere, but if the online medium(forums) is implemented in the right manner by the dealers, a lot of the members in my view would rather buy locally to avail warranties & services.

 

[Thad E Ginathom]

No special discounts for particular people, fair deals to all.

well, If you personally, negotiate a deal, that's fine, but for the dealer to think they can then wave some apple-ian (substitute MS, of course, according to point of view ) non-disclosure agreement in your face is just a joke. Even if they did;, having you walk back through their door is the most important thing, so what are they going to do about it?

As a buyer, I reserve the right to reveal anything about a deal that I make, and any dealer that thinks the situation could be otherwise is having a fantasy.

Hey, in reality, I'm not even that much of a hard bargainer! It's the principle of this thing!

 

[kapvin]

it's very difficult to be at Sridhar's showroom when you are on a trip to b'lore :lol:

__________________
ARN Systems [email protected]
Showroom @66/1 Coles Road, Fraser Town, Bangalore
Distributor/Dealer for Usher Audio, Audio Art cables, Emerald Physics, Ayon Audio , Jaton and Odyssey Audio


did i miss something?

 

[thevortex]

well, If you personally, negotiate a deal, that's fine, but for the dealer to think they can then wave some apple-ian (substitute MS, of course, according to point of view ) non-disclosure agreement in your face is just a joke. Even if they did;, having you walk back through their door is the most important thing, so what are they going to do about it?

As a buyer, I reserve the right to reveal anything about a deal that I make, and any dealer that thinks the situation could be otherwise is having a fantasy.

Hey, in reality, I'm not even that much of a hard bargainer! It's the principle of this thing!

I am with you on this.

And it is not as if dealers are not gaining through such online sharing of prices. If it is a good deal, people are going to rush back in and get a slice or a piece of whatever it is they are selling!