price fixing?

Discussion in 'The Rehearsal Room' started by marksmith, Apr 18, 2010.

  1. marksmith

    marksmith Active Member

    I am sure that I am not alone in wondering why there has been such a rapid rise in instrument prices?
    Even taking into account such things as raw material rises and the credit crunch, instrument price rises have shot through the roof. ( price of 'Yamaha Maestro' Euphonium, £2400 two years ago, £4000 now!)
    Also, most dealer prices are very similar, the competitive pricing edge that existed, has all but disappeared. Why?
    Are we being taken for a ride?
    Is there price fixing going on?
    I would be interested in your thoughts/experiences on this one.
  2. Jan H

    Jan H Moderator Staff Member

    could this be partly due to the depreciation of the British pound, making it more expensive to import goods from abroad?
  3. AndyCat

    AndyCat Active Member

    That's it, plus usual rises. Everything imported makes everything dearer when the pound is so weak. Those prices mentioned were when a euro was worth 67p.
  4. Vegasbound

    Vegasbound Active Member

    Also Yamaha have reduced their discount to dealers twice in the last 6 months!
  5. Anno Draconis

    Anno Draconis Well-Known Member

    Pound's in the toilet, so everything made abroad is much dearer. At work I've seen a similar problem with a lot of the consumable items we use, especially paper, which is mostly made in continental Europe. Add that to the higher cost of credit (and credit insurance), energy and transport - perfect recipe for soaring prices.
  6. Cornet Nev.

    Cornet Nev. Member

    Add to all the above, the general cost of raw new copper has risen alarmingly, as also zinc, the two main constituent parts of brass, then tax and import duties may also be a consideration.
  7. tromwinst

    tromwinst Member

    This shocked me the other week. I wanted a cornet mouthpiece, so I rang lots of music shops in the uk to find one. They quoted me £55 + postage. They also told me that it could take up to 4 weeks for it to arrive!!! What!

    I then rang a shop in the states, it cost me £33 including postage and it would be here within the week!! Hows that work!?!

    Shops in the UK are going to have to do better than that if they want to keep business going. I would always choose to buy from the UK but sadly Im not prepared to wait up to 4 weeks and pay near on £62 pund for it! :rolleyes:
  8. marksmith

    marksmith Active Member

    I can see the point of the factors mentioned, but we seem to have become resigned to being over-charged for items/services in Britain.
    The scrappage scheme for cars was the perfect camouflage for dealers hiking the prices, to compensate for their supposed contribution to the 'Green' scheme. No one benefitted from that, other than the dealers.
    We continue to pay through the nose for fuel, whereas we know that the wholesale price of supply has vastly fallen.
    We are losing the will to fight for 'right and principle' in this country, too often willing to sit back and allow people to rip us off.
    The prices for instruments are far too closely reflected from dealer to dealer, they seem to have watched what bands/individuals are willing to pay - and now getting a 'good deal', is a thing of the past.
    I note that the second-hand market is similarly increasing. £699-new, Sovereign Euphs (1976), selling for £1500!!!! They may have a good reputation but someone is having a laugh - surely?
    I can see advanced players having to play on student instruments before long, just to be able to afford to play! The world is going mad!:mad:
  9. GJG

    GJG Well-Known Member

    Mmmm ... wait until the 'piece arrives in the UK, then you get a nice letter from Royal Mail saying that your item has been selected for presentation to UK Customs. Customs will charge you import duty + VAT (not just on the item itself but on the shipping charges as well). You have to pay this to Royal Mail before you get the goods, because Royal Mail have already paid the Duty + VAT on your behalf. Also, you have to pay Royal Mail an additional fee to cover their "handling costs"; last time I bought something from the US it was £22 ...

    Now you may be lucky; I'm led to believe that selection of imported goods for presentation to UK Customs is on a "random" basis. However, if you're not lucky, then come back and tell us it's better to purchase directly from the 'States ...
  10. tromwinst

    tromwinst Member

    Must have been lucky then!! No charges added, surely even with those charges it is cheaper still?
    I would still rather pay what I did than wait 4 weeks for something. Music shops do need to get with it or they are going to do themselves out of business, especially when people can very quickly search the net and with a few buttons pressed can have an item delivered from abroad in half the time and most of the time cheaper than they can from the local music store.

    What I will say is that for sheet music June Emerson is fantastic, very reliable and very quick delivery!
  11. GJG

    GJG Well-Known Member

    Dunno; if £33 is the quoted price, then import tax is around 4%, so add on about £1.20, then VAT is 17.5%, so another £6 approx., plus the "handling charge", come to around £62 all told. Not much in it, although I appreciate that time may have been a consideration. I only made the point because not everyone is aware that these extra charges can be incurred, so that "bargain" may not be all it appears ...
  12. davidquinlan

    davidquinlan Member

    I've heard the price of raw materials has increased quite a bit. Last time at an instrument repair / manufacturer, he was gathering up all his old brass to sell because the price had gone up so much. It was previously a pile of dead instruments (some hanging from ceiling of building, or created as franken-horns... )... but the increase in value meant it was worth gathering up and selling.
  13. MoominDave

    MoominDave Well-Known Member

    We've had quite a bit of inflation since 1976! From
    In 2008, £699.00 from 1976 was worth:
    £3,770.00 using the retail price index
    £3,720.00 using the GDP deflator
    £5,960.00 using the average earnings
    £7,320.00 using the per capita GDP
    £7,990.00 using the share of GDP
    The price of that euphonium has actually decreased significantly.

    I sat next to Lyndon Baglin yesterday playing 1st baritone for a CD recording with Aldbourne band. Asked him about his euph, which looked like a Prestige - he said No, it's a Sterling, the Prestiges are too expensive. Gorgeous massive sound from him, though; balancing up was quite a challenge.
  14. marksmith

    marksmith Active Member

    I have to bow to your superior knowledge of figures, on the effects of inflation Dave. However, the comparative differences between one dealer and another, is now barely noticeable. Surely this alone is enough to beg my question?
    The fewer the options, the less competitive dealers become, thus allowing prices that are surely way beyond the pocket of the average player?
    I would class myself as an experienced player and can certainly get a full sound out of a student level of instrument. But could I balance it against heavier grade instruments in a band? Unlikely.
    We are not all Lyndon Baglin - but I do appreciate a good instrument, I just wish that they had not become so expensive.
  15. scotchgirl

    scotchgirl Active Member

    I would love a new baritone...but I'd have to sell my euph to get one....which would be like selling a child lol! So I continue to play my old, really old Sovereign baritone (about 25 years old - could be more)....the valves are terrible, truly awful and I've had it overhauled/valves lapped (?) about 4 times since I've had it...but can I justify £3525 for a new Prestige? Can I ******....:(
  16. Jon Parkinson

    Jon Parkinson New Member

    The other side of the coin.

    Hi Mark. Thought you might like to hear the retailers point of view. Sorry it's a bit long. Is there a price cartel? Absolutely not. Why are prices similar? There are several reasons of which the main one is the internet. You can compare prices all over the world in a few seconds, but retailers tend to compare their prices with their competitors in the same country (who will also be working under the same trading terms from the wholesalers in terms of cost prices etc). If someone is offering low prices you know that you have to get close to those prices to have a chance of a sale. Inevitably therefore prices tend to congregate roughly on a par with each other.

    Why have prices increased so much? Because the pound has collapsed against the Euro, Yen and Dollar. A couple of years ago the £ was worth almost 2$ and now it's just about reaching $1.50. In addition, there have been raw material cost increases (15% in some cases) and the manufacturers have all had to include their normal inflationary increases as well. These currencies have a bearing on almost any instrument you care to mention. Last year we experienced price increases of nearly 30% in one hit in some instances.

    The retailers don't set these prices. They are set by the importing agent or the manufacturer if they sell to the retailer direct like Besson for example. The market has been trained to buy on price by big players like Asda etc. and the players don't seem to care if the stockist has 10 in stock to try or simply gets something in to order. I can't tell you the number of times that someone has finished trying an instrument in our shop and then said 'I want to buy it, but only if you match X's internet price.' X might not even have one in stock, but the price is the main criteria for buying. Therefore in a price driven market traders sell things for the lowest price.

    One of the reasons that prices are similar is not that there is some dark plot in the trade to manipulate profit margins upwards. It's because the traders cannot sell them for much lower and still make a profit. The selling prices on premium brass instruments are close to cost price.

    The reason for the increases is not down to the traders either. We don't set either the RRP or the trade price and these may vary from one country to another depending on the brand. However, if the pound crashes in value against other currencies, the manufacturer has to put the price in the UK up to compensate or he effectively loses money.

    Please don't misunderstand - this is not a bleat about how hard done by the retailer is. Low margins on brass instruments have been a fact of life for a long time and we just get on with dealing with market pressures, the effect of currency fluctuations and the internet etc. We are pragmatic about these things.

    However, please do understand that your suspicions are not correct. There is no price fixing here and no secret trade agreements. If all the major players had got together round a table to arrange higher profits, you would be paying more than you are now. Be grateful to market forces for driving prices downwards and blame those that caused the recession for making a mess of sterling. Ask your chosen brass supplier if his profits from the sales of brass instruments contribute in any significant way to his choice of holiday destination.

    He'll have a good laugh (but not all the way to the bank)
  17. Rapier

    Rapier Supporting Member

    Yes Jon, but when I go to your shop I have a laugh at Steve! I mean, he plays a French Horn for goodness sake! And to think he was once a proper musician. :)
  18. Jon Parkinson

    Jon Parkinson New Member

    Hi! As someone from the woodwind fraternity I think it's probably best if I refrain from comment!
  19. marksmith

    marksmith Active Member

    Thankyou for that detailed response Jon.
    I at first suspected the Lottery Funding for influencing the price hikes, (i.e easy orders, band set part-exes etc) but I am quite open to the 'other point of view', which you do give.
    I still cannot see the justification for the massive price changes which have occurred over the last couple of years, even with the factors discussed. (we are not discussing 10-20% rises, more like 60-70%!)
    If these are the lowest possible prices, then it leaves us little hope for the future.
    A lot of people are earning 'minimum wage' type money, how are dealers ever likely to get none-band related sales, if the price differentials continue to widen between income and cost of goods?
    I don't really want to enter a political discussion here, because I think that dealers do need to pay attention and be realistic with their profit expectations.
    If we are becoming a nation of retailers, rather than manufacturers, then the pressure needs to be put upon those that do retail, to supply good service at competitive prices, then individuals would not need to look abroad to satisfy their needs.
  20. KMJ Recordings

    KMJ Recordings Supporting Member

    With respect, I think you've missed the point.

    There are no sensible profit margins....MI shops are going out of business hand over fist...sometimes because the competition from internet box shifters means that they're overlooked, sometimes just because people can no longer afford the good they're offering. Your interpretation of the 'cost of goods' is flawed coming from the retailer's perspective - the wholesale prices have risen just as much.

    Over the course of the last 12 months I've watched the (new) retail price of my mic collection grow by about 40%.......

    Additionally, in a lot of cases, all people care about it price and not service levels - which IMO is flawed reasoning, but true never the less.
    Last edited: Apr 20, 2010

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