Recent purchases - Part II - Page 2666
Styles mentioned in this thread:
I don't think that people understand why Japanese brands are expensive at retail in the US - especially when compared to prices there. It does not come down to inflating prices, but rather to a pretty stark difference in retail economics between the two countries. Duties and transportation play a role as well of course, but the retail wholesale pricing model is where the two worlds collide.
A typical Japanese retailer marks up 1.67x the wholesale price, which means that a $500 item costs them $300 to buy wholesale. In this kind of pricing environment, there is no room for deep markdowns - but that's how things work there. In the US, we're addicted to "deals" so typical retailers would mark up up to 3x wholesale price so that they can make consumers happy by slashing prices down 50% and more... it's a bit of a ridiculous construct but that is what works with the US consumer psyche.
Now, if you're a US retailer buying that item from the japanese maker for $300, you may end up with about 20% of transpo & duties, so it costs you $360. If you mark it up 2.5x your retail price will be $900 (versus $500 in Japan !). If you go any lower than that, after overhead and (expected) seasonal markdowns, you're probably not going to make any money on it.
I'm probably going to get this wrong...
Most consumer goods in the United States have an MSRP; most retailers can expect each other to price in the area of MSRP, removing an incentive to undercut each other. In Japan the MSRP (calculated according to GDL's formula) is pretty strictly adhered to. Much less helpful to price shop there. It's a level of collusion we'd probably consider anti-consumer in the US.