DCC prices

3355 Views 24 Replies 9 Participants Last post by neil_s_wood, Nov 13, 2006

Doug

Discussion Starter · Nov 11, 2006

How come a Lenz L10433 or Gold JST-MP decoder costs £22 to £24 in the UK

And I've just bought a bunch, including shipping from the USA for £14 each. Even if I do pay the VAT, they still are about £8 cheaper per decoder than the UK prices.

Why is this

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Gary

· #2 · Nov 11, 2006

Its like everything else in the UK. Doesn't just apply to decoders.

The big issue is real estate and overhead. The cost of running a business in the UK is higher by 100% or even more per square metre when compared to the USA and even parts of Europe. You are not going to cover that massive overhead selling decoders in the UK at USA prices. And of course there is not the volume of sales either.

If we Brits want to enjoy high house prices then we have to enjoy high prices in other areas and not complain about it.

Happy modelling
Gary

Doug

Discussion Starter · #3 · Nov 11, 2006

The reason that I don't buy these things from France is that they cost £26 to £28 here.

I just hope that the new Hornby decoders work well... If they do, I'll use them in my functionless steam locos.

dwb

· #4 · Nov 11, 2006

Historically the US has never supported the same high prices as Europe - people just won't pay them. Rather than just blame high house prices, I would suggest that at least some of the price we pay here goes into the £80 billion, that's £80,000,000,000, that is spent by the NHS and the UK does not spend as much as Germany or France on health. Being ill in the US is not something you can afford if you haven't got health insurance.

David

mthornton

· #5 · Nov 11, 2006

Health costs can't be the reason as UK overall health expenditure is low by comparison with both the US and most European countries. Yes it is financed differently, but it is the overall value which would affect prices not whether you pay via private insurance or through taxation.

I agree with Gary, it's market size and real estate costs.

darobi

· #6 · Nov 11, 2006

I think the prices are high as people are prepared to pay them. Once we wise up and stop buying them then they will come down.

Nobody's fault but our own.

mthornton

· #7 · Nov 11, 2006

QUOTE (Doug @ 11 Nov 2006, 15:15) <{POST_SNAPBACK}>my functionless steam locos.
Disgusting

, they should have at least one of sound or smoke if not both!

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Doug

Discussion Starter · #8 · Nov 11, 2006

QUOTE (Mark Thornton @ 11 Nov 2006, 17:19) <{POST_SNAPBACK}>Disgusting

, they should have at least one of sound or smoke if not both!

There is hardly enough space for the decoder, where am I going to put all that stuff

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mthornton

· #9 · Nov 11, 2006

The smaller sound ecoders are not much bigger than regular decoders and the speaker can go in the cab or coal bunker (on a tank engine). I have a rather large (older) sound decoder in a Bachmann standard 4MT tank. With a smaller decoder there would have been room for the smoke generator as well.

M8 INTERNET

· #10 · Nov 11, 2006

It's all about margins and costs...
Most retailers work to a margin of between 30 and 50%

Most of the costs in UK are higher, due to the taxes applied to them
Transport costs have duties and VAT that are higher than almost anywhere else in the world
Employer rates are higher than they were 10 years ago, in real terms
Land services have increased disproportionally to the RPI (council taxes, business rates, water rates, electric / gas)

On the plus side, demand for decoders is increasing so the unit cost is remaining the same, and in some cases is decreasing
However, as the technology moves forward and improves so does the premium price!

bangerblueed

· #11 · Nov 11, 2006

Speaking as a man of business( I do run my own small business) you cannot blame it on higher costs it mostly comes down to competition for example SWD are now selling their sound chips at £89.50 because howes and bachman are now in direct competition with them so if for example NCE brought out a chip with a spec almost identical to the lenz gold at say £20 the lenz golds drop to £19

Businesses charge what the market will stand margins as such are NOT the only criteria if your margins are insufficient you downsize your costs such as find cheaper premises etc etc

dwb

· #12 · Nov 11, 2006

"Health costs can't be the reason as UK overall health expenditure is low by comparison with both the US and most European countries. Yes it is financed differently, but it is the overall value which would affect prices not whether you pay via private insurance or through taxation."

Check out these two webpages Pie chart for UK budget 2006 - Money In, Money Out and OECD report in rise in tax revenue as % of GDP

The first reference tells you that HM Treasury plans to collect £516 billion from us during this year. The second tells you that in 2005 the OECD estimates that the UK government tax take as a % of GDP is 37.2%. The comparable figure for the US is 26.8%. How the UK government takes this money will vary but the fact is it takes more than the US and it comes from a combination of direct income taxes, expenditure taxes or service taxes. All legal commerce is subjected to these one way or another and so it should come as no surprise if goods and services cost more here as a result.

I was wrong about the health care cost (which means a report this week on radio 4 this week on the NHS was wrong too), it's £96 billion which is about 1/6th. Health and "social expenditure" account for about half of government spending. I doubt the US comes anywhere near this, so I think my argument still stands. We have "bigger government" than the US so inevitably everything costs more.

The biggest single beneficiary from any business run in this country is HM government, whether it makes a profit or not.

David

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mthornton

· #13 · Nov 11, 2006 (Edited by Moderator)

You have to add in the cost of the US private health system as well. Those costs that are crippling companies like General Motors.

Yes overall tax is lower in the US, but you would also be paying much higher private health insurance charges there (or more typically your employer would be).

In 1998 the US spent $4178 per capita on health care while the UK spent only $1461.
For all the rhetoric about the cost of the NHS, it remains stunningly cheap compared to the US. Despite all that extra money the overall outcome in the US is worse than the UK; while better at the top end, the poor (non existent) service delivered at the other end drags down the overall result.

More on US health care costs
http://www.nchc.org/facts/cost.shtml

M8 INTERNET

· #14 · Nov 11, 2006 (Edited by Moderator)

There are a lot of factors in costs and what price to set a product at
The RRP of a decoder may be £30, but if the retailer has set their margin at 30%, then they could sell it for £20 knowing it meets their costs
Equally, if there is no competition and an equivalent retailer sells it for £28, then they could charge anywhere in that range

As an example
Its almost the same with my pricing for main branded cola 500ml
I price mine at £1.15, even though TESCO and ASDA (both right beside me) are £0.88
My store has a margin for our drinks department of 46%

Gary

· #15 · Nov 11, 2006

Why is Coca Cola almost half the price in Spain that it is in the UK?

You can get the large bottles for about €1.25 in Spain but in the UK even at Tesco and Asda you pay about £1.60 which is about €2.30.

Happy modelling
Gary

dwb

· #16 · Nov 11, 2006

>You have to add in the cost of the US private health system as well. Those costs that are crippling companies like General Motors.

I bet if GM were selling Lenz decoders, they would cost the same as here
I doubt the US outlets selling discounted Lenz decoders have quite the same level of private health.

In either case, the cost of the health care is "optional" for the companies. Paying NI contributions is not. Neither did I choose the single largest element of government spending - the "social" stuff which means pensions among other things. Don't tell me that the US spends more there as well.

It just costs a lot more to do business on this small overcrowded island and there are a lot more regulations business has to meet as well - Oops this isn't the DDA and layout height thread

David

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Doug

Discussion Starter · #17 · Nov 12, 2006

When will the UK shops realise that people are buying the same products they sell overseas? If they dropped their prices by only a couple of pounds, they would gain a whole lot more customers.

I'm just waiting for a JadlamRacing for DCC.

neil_s_wood

· #18 · Nov 12, 2006 (Edited by Moderator)

In Australia a lot of things cost in dollars what we pay in pounds at home. We are the highest taxed (in terms of stealth taxes) country in the world in some respects. Although income tax is low all these discreet taxes knock up prices to an outrgaeous degree. Look at petrol. Apparently the cheapest in Europe but after tax it's the dearest. I remember in South Africa about 17 years ago seeing Johnnie Walkers Red on sale for 16 rand which was then four quid which was about a quarter of what it cost in Scotland where we make it.

It's not called rip off Britain for nothing.

Modellbahn Kramm have the Lenz Gold for 25.82 Euros, I just bought a handful to get converting my analogue locos.

Brian Considine

· #19 · Nov 12, 2006

QUOTE (Doug @ 12 Nov 2006, 00:48) <{POST_SNAPBACK}>When will the UK shops realise that people are buying the same products they sell overseas? If they dropped their prices by only a couple of pounds, they would gain a whole lot more customers.

I'm just waiting for a JadlamRacing for DCC.

If only,

A retailer (model railway) works on a margin of 25% - still potential customes say the price is too high compared to L****** for example. Even if he drops his margin to 20 or even 15% he is still often higher priced.

I suspect that as regards wholesale prices the palying field is not level.

best regards
Brian

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mthornton

· #20 · Nov 12, 2006

QUOTE (dbclass50 @ 12 Nov 2006, 09:04) <{POST_SNAPBACK}>I suspect that as regards wholesale prices the palying field is not level.
Why should it be? It seems reasonable for a manufacturer to give a discount for quantity.

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