Laughingman Posted September 4, 2018 Share Posted September 4, 2018 More a question for you business and finance types, but aren't the Forge-world price increases effectively attempts to violate the law of one price (LOOP) And by definition create arbitrage opportunities for "enterprising resellers" or "forwarding services" based in the UK? Also, If the point of the price hikes is to deal with currency risk, won't a currency hedging regime have worked better? I was under the impression that most multinationals at this point have moved to such a model specifically to address both currency risk and arbitrage issues... Link to comment Share on other sites More sharing options...
Rik Lightstar Posted September 5, 2018 Share Posted September 5, 2018 If you get a trade account, you'll be limited in which territories you're allowed to trade in. I very much doubt there's enough money in buying Forgeworld kits here in the UK and then shipping them on at your own cost to make it viable. Most multinationals seem to have fixed regional pricing conversions these days, Apple for example charge the same in £s for their products as they do in $s so an entry level iPhone X is £999 or $999, this is not the same "value" however. We've seen the same thing in the UK for decades with pricing on things like computer games and consoles, films, fashion brands, photographic equipment, the list goes on. There are fewer examples of UK based multinationals pricing the way GW does, but that's just down to where businesses tend to base themselves once they reach a certain size. Rik Link to comment Share on other sites More sharing options...
MysticTemplar Posted September 5, 2018 Share Posted September 5, 2018 If you get a trade account, you'll be limited in which territories you're allowed to trade in. I very much doubt there's enough money in buying Forgeworld kits here in the UK and then shipping them on at your own cost to make it viable. Most multinationals seem to have fixed regional pricing conversions these days, Apple for example charge the same in £s for their products as they do in $s so an entry level iPhone X is £999 or $999, this is not the same "value" however. We've seen the same thing in the UK for decades with pricing on things like computer games and consoles, films, fashion brands, photographic equipment, the list goes on. There are fewer examples of UK based multinationals pricing the way GW does, but that's just down to where businesses tend to base themselves once they reach a certain size. Rik I feel like it's worth noting, that assuming the price includes VAT already (which... I think they do, typically? It seems born out by my brief research, anyways), it works out to about a 60 pound increase at today's exchange rates for the iPhone, which is about 6%. Going from the UK stated price to the US stated price for an Astraeus, on the other hand, applying the same logic (removing VAT, then using today's exchange rate), works out to over a 100 dollar difference, which is about an 42% increase. Edit: It's important to remember that as far as I know, prices in UK pounds are presented post tax, and prices in US dollars are presented pre-tax (likely due to the fact that US sales tax laws are state-specific, so it's difficult to have a unified post-tax amount). So doing a direct comparison between the two is probably going to skew the numbers. Link to comment Share on other sites More sharing options...
Rik Lightstar Posted September 5, 2018 Share Posted September 5, 2018 Your pricing calculations are spot on for toady's exchange rate, however historically Apple have made much better money from this and GW would have made much less. Quoted UK Prices almost exclusively include VAT as this is a requirement unless you are specifically selling to businesses only. The exchange rate of "Today" is arguably something of a poor example, it's at its second lowest point in 5 years, the only lowere point for GBP was immediately after the Brexit vote from which it did recover back up to $1.35-$1.40 to £1.00 previous to that it was consistently over $1.50 and once the "uncertainty" of Brexit has been removed and people know what's going to happen in terms of trade arrangements then it's expected that it is likely to have another recovery. While it seems unlikely that the Pound will return back to 2015 or 2014 rates, it's safe to assume it's at the lower end of its cycle and GW have to price to ensure they don't get caught out by the expected swing the other way. The only thing markets really dislike is uncertainty. Rik Link to comment Share on other sites More sharing options...
Tyriks Posted September 5, 2018 Share Posted September 5, 2018 Your pricing calculations are spot on for toady's exchange rate, however historically Apple have made much better money from this and GW would have made much less. Quoted UK Prices almost exclusively include VAT as this is a requirement unless you are specifically selling to businesses only. The exchange rate of "Today" is arguably something of a poor example, it's at its second lowest point in 5 years, the only lowere point for GBP was immediately after the Brexit vote from which it did recover back up to $1.35-$1.40 to £1.00 previous to that it was consistently over $1.50 and once the "uncertainty" of Brexit has been removed and people know what's going to happen in terms of trade arrangements then it's expected that it is likely to have another recovery. While it seems unlikely that the Pound will return back to 2015 or 2014 rates, it's safe to assume it's at the lower end of its cycle and GW have to price to ensure they don't get caught out by the expected swing the other way. The only thing markets really dislike is uncertainty. Rik Do you have sources on this? I'm struggling to find any really recent ones. Link to comment Share on other sites More sharing options...
MysticTemplar Posted September 5, 2018 Share Posted September 5, 2018 Your pricing calculations are spot on for toady's exchange rate, however historically Apple have made much better money from this and GW would have made much less. Quoted UK Prices almost exclusively include VAT as this is a requirement unless you are specifically selling to businesses only. The exchange rate of "Today" is arguably something of a poor example, it's at its second lowest point in 5 years, the only lowere point for GBP was immediately after the Brexit vote from which it did recover back up to $1.35-$1.40 to £1.00 previous to that it was consistently over $1.50 and once the "uncertainty" of Brexit has been removed and people know what's going to happen in terms of trade arrangements then it's expected that it is likely to have another recovery. While it seems unlikely that the Pound will return back to 2015 or 2014 rates, it's safe to assume it's at the lower end of its cycle and GW have to price to ensure they don't get caught out by the expected swing the other way. The only thing markets really dislike is uncertainty. Rik True enough for the exchange rate. The intended point was more the tax thing - that the IPhone comparison looks worse than it is, and the GW comparison looks better than it is, because the listed prices for UK stuff is post tax and the US stuff is pre tax. As a result, the real multiplier is 20% higher than the one that you see. Link to comment Share on other sites More sharing options...
Ishagu Posted September 5, 2018 Share Posted September 5, 2018 Did a bunch of my posts get deleted?? It was all friendly and on topic? Link to comment Share on other sites More sharing options...
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