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Sonos Sale - Rant about prices

  • 3 April 2020
  • 5 replies
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In these difficult times I think we are all entitled to the occasional gentle let off rant so here is one from me.

Why are the UK prices so high compared to US?

I have been trying to justify to myself buying a couple of additional speakers before my system goes into Legacy Mode. Saw the Sonos Sale on the US site and thought - you know that is probably good enough reason. 

In the US a Sonos One is normally USD199 down to USD 149 and a SL USD 179 down to USD 129. Now it is bad enough that normally Sonos UK prices are a direct translation from USD to GBP so rather than a SL coming in at around GBP 145 it is GBP 179 (based on current exchange rate).

In the Sale rather than a SL being reduced to GBP 129 it is only reduced to GBP 139. So the UK pays more the product normally and in the Sale we do not get as big a discount as our American cousins – double whammy!!!

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Best answer by John B 3 April 2020, 14:59

I have no idea whether or not this represents a fair pricing strategy - or even what ‘fair’ means here, but here are a few thoughts as to why, on a straight currency conversion, prices in the UK might be higher, but scope for discounts lower:

  1. Exchange rates.  In the last week or so, the GB Pound hit a 35-year low against the US $.
  2. Sales taxes may be higher in the UK (VAT and import duties, for example)
  3. Retail margins may be higher in the UK (and even for direct sales, Sonos cannot undercut its retail partners)
  4. Transport / delivery costs may differ

But in any case, what I would expect any company operating in several distinct markets to do is to price to maximise profits in each of those markets - the price at which marginal revenue = marginal price.  It is more complex than that, of course - sales like this may be about securing market share or getting immediate cash flow.  But basically, if $129 is the price that maximises profit in the US and £139 does that in the UK, that is what a rational company will do, 

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I have no idea whether or not this represents a fair pricing strategy - or even what ‘fair’ means here, but here are a few thoughts as to why, on a straight currency conversion, prices in the UK might be higher, but scope for discounts lower:

  1. Exchange rates.  In the last week or so, the GB Pound hit a 35-year low against the US $.
  2. Sales taxes may be higher in the UK (VAT and import duties, for example)
  3. Retail margins may be higher in the UK (and even for direct sales, Sonos cannot undercut its retail partners)
  4. Transport / delivery costs may differ

But in any case, what I would expect any company operating in several distinct markets to do is to price to maximise profits in each of those markets - the price at which marginal revenue = marginal price.  It is more complex than that, of course - sales like this may be about securing market share or getting immediate cash flow.  But basically, if $129 is the price that maximises profit in the US and £139 does that in the UK, that is what a rational company will do, 

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  • Sonos users returning speakers when ever they feel they are not “Fit for use” may have to do with it……. I don’t understand wifi “not fit for use”…...it doesn’t have bluetooth “not fit for use” …..it won’t play underwater “not fit for use” …. the station I wanted from New Zealand won’t play anymore “not fit for use”

there can be a correlation between cost of doing business (not fit for use policies etc.) and price of goods.

In these difficult times I think we are all entitled to the occasional gentle let off rant so here is one from me.

Why are the UK prices so high compared to US?

I have been trying to justify to myself buying a couple of additional speakers before my system goes into Legacy Mode. Saw the Sonos Sale on the US site and thought - you know that is probably good enough reason. 

In the US a Sonos One is normally USD199 down to USD 149 and a SL USD 179 down to USD 129. Now it is bad enough that normally Sonos UK prices are a direct translation from USD to GBP so rather than a SL coming in at around GBP 145 it is GBP 179 (based on current exchange rate).

In the Sale rather than a SL being reduced to GBP 129 it is only reduced to GBP 139. So the UK pays more the product normally and in the Sale we do not get as big a discount as our American cousins – double whammy!!!

 

You simply cannot compare US prices with UK prices directly.  In the US, each state has different tax rates, and there is no federal tax.  So prices are listed without taxes, and the taxes are applied at time of purchase, according to which state you are buying from.  In the UK taxes like VAT and import duties are included in the list price. If you figure in exchange rate, VAT and import duties, the prices are reasonably close, certainly within a round up or down to the nearest $10 close. 

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I did say it was a little letting off steam rant :grinning: .

I know in reality you cannot compare UK & US prices but it is remarkable how over the years what ever the exchange rate between the US & UK technology prices in the UK seem to be the same as the US with just the simple swap of the currency symbol. (except in this discount case!)

As a further excuse not to do what I should be doing right now I had a quick trawl round the world

For the SL US 27% off, GB 22%, Eurozone 25%, Aus 18% but the place to be is Canada with a 30% discount.

I did say it was a little letting off steam rant :grinning: .

I know in reality you cannot compare UK & US prices but it is remarkable how over the years what ever the exchange rate between the US & UK technology prices in the UK seem to be the same as the US with just the simple swap of the currency symbol. (except in this discount case!) U

As a further excuse not to do what I should be doing right now I had a quick trawl round the world

For the SL

S 27% off, GB 22%, Eurozone 25%, Aus 18% but the place to be is Canada with a 30% discount.

Interesting to see those comparisons.  But to correct one point - the 1-1 £-$ pricing for Sonos dates only from shortly after the substantial devaluation in the GBP following the Brexit referendum.  

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