Can't Figure Out Film Pricing

[Thomas Bertilsson]

All true Thomas and what Ilford or any other maker charges is key to this issue and it's the price we are unlikely ever to know. However if we assume that there are sufficient retailers in the U.K. to get us close to competition and I think this is a fair assumption, then if each and every one of these retailers charges more than in the U.S. then it suggests that Ilford or any other maker's price to those retailers leads to the need to charge a higher retail price by all the U.K retailers.

I continue to remain sceptical about external(outside the control of the producer) circumstances explaining the U.S. v U.K. differential

Nice to see you helping to keep this thread on track. Let's make sure it doesn't become a discussion about the pros and cons of a European "free health service" versus the U.S version. That's for the Lounge

pentaxuser

Is it true that all films, including Ilford, Kodak, and others, are of higher cost in the UK? If yes, that DOES point to a systemic issue with selling film in the UK compared to other places.
If not, then there is no pattern that we can deduce from all this.

Looking at it from the manufacturer's standpoint, where I work we get it pounded into our brains every single time there is big company meeting that what really counts at all times is margin. Pricing is the most effective way to obtain margin expansion, and every single sale has to count. If I make up an arbitrary number of GBP 5 per roll of film, and Kodak or Rollei charges that amount, there is little reason for Ilford to sell it for less.
Reading history, part of Agfa's big problem was that they didn't have enough margin. They sold their film at a very low price (at least in Sweden and the US as I lived in two countries at the time), considerably less expensive than their competitors. That yields volume, but if there's no profit then it's for nothing. All you achieve is market erosion and everybody loses out.

I'm just thinking out loud here, not really trying to prove anything, but I see a couple of possibilities:

1. Ilford, just like every other healthy business, is making as much margin on their product as possible.
2. The distributors and retailers do exactly the same thing.
3. There's a systemic issue with selling things in the UK, making goods expensive; perhaps it's related to taxes (for all hands that touch the product in the distribution chain), or maybe some other cost that all of us are unaware of.

I have told my father, who still lives in Sweden, how much film costs in the United States, and he's always a bit surprised when I tell him, even though he knows. There's a big difference.

You could also turn the argument around and consider the US market, which is extremely cut throat with high competition. When things get too expensive here then people quickly jump to the next best alternative. As a matter of fact, many here shop on price alone. That's why companies like Wal-Mart have become so popular here, in spite of the long term stupidity of that behavior. I wouldn't be surprised if that pricing strategy for the United States is a real factor in why it's less expensive here than most everywhere else.

Just some thoughts to consider to feed the thread.

 

[analoguey]

Always bemused that things which have to take the shipping route to the US can be cheaper than in other places - whereas it isn't necessarily so elsewhere. And currency fluctuations necessarily doesn't explain it.
Shipping half way around the world and then being cheaper than shipping a few hundred kilometers? (Given how many handle it in the interim)

 

[trythis]

I would respectfully contend that this catch-all statement may be too simplistic. Tis true we have a VAT(value added tax) in the U.K. of 20% and many European countries are similar but the VAT v U.S. state sales taxes which are lower doesn't appear to account for the difference. As far as personal taxation is concerned which does clearly help to pay for free healthcare, I cannot see the link with higher Ilford, Kodak etc prices

pentaxuser

Its not just VAT on the buyers side, EU companies must provide for benefits that go way beyond what is done in the US.
Take pregnancy in Denmark as an example: If you hire a woman in Denmark, and she has a baby 5 months later (or 2 days for that matter), you must pay her salary for a year. If you hire a man, and 3 days later his wife has a child, you must give him 2 weeks paid leave. Many E.U. countries have fantastic quality of life policies like this. Wonderful as they may be; they make running a business very expensive and guess who pays for that? By contrast the USA requires 12 weeks under very restricted circumstances, i.e after 12 months or employment, 50 employees or more, etc.

Real estate in the UK, and other small EU countries is much more expensive than in the US in general. Fuel prices are 2 to 4 times higher, also raising costs for transporting products.


I dont know all the details of setting up a business in the EU, but if I want to sell film in the USA, I just need to buy it and sell it online. There are licenses I might have to buy, depending on location, but I can basically hire people for $9 an hour and if they have a baby, for instance, I can just stop paying them. I would pay income tax on profits, which can be manipulated down to almost nothing depending on how I organize the company.

Retail prices will change as we start to see health care benefits shift here in the US. Everyone will have to pay for that somehow, and our costs of doing business will go up eventually to cover that.

 

[pentaxuser]

Its not just VAT on the buyers side, EU companies must provide for benefits that go way beyond what is done in the US.
Take pregnancy in Denmark as an example: If you hire a woman in Denmark, and she has a baby 5 months later (or 2 days for that matter), you must pay her salary for a year. If you hire a man, and 3 days later his wife has a child, you must give him 2 weeks paid leave. Many E.U. countries have fantastic quality of life policies like this. Wonderful as they may be; they make running a business very expensive and guess who pays for that? By contrast the USA requires 12 weeks under very restricted circumstances, i.e after 12 months or employment, 50 employees or more, etc.

Real estate in the UK, and other small EU countries is much more expensive than in the US in general. Fuel prices are 2 to 4 times higher, also raising costs for transporting products.


I dont know all the details of setting up a business in the EU, but if I want to sell film in the USA, I just need to buy it and sell it online. There are licenses I might have to buy, depending on location, but I can basically hire people for $9 an hour and if they have a baby, for instance, I can just stop paying them. I would pay income tax on profits, which can be manipulated down to almost nothing depending on how I organize the company.

Retail prices will change as we start to see health care benefits shift here in the US. Everyone will have to pay for that somehow, and our costs of doing business will go up eventually to cover that.

Just on a point of information Ilford is in the off-shore part of the EU - It's called the U.K. So it's subject to all these constraints but manages to sell its products very well, if somewhat more cheaply, than it does in the U.K.

Maybe its U.S pricing dept needs to talk to its U.K. pricing dept and let it in on its secret then we can all benefit.

pentaxuser

 

[Felinik]

Its not just VAT on the buyers side, EU companies must provide for benefits that go way beyond what is done in the US.

Take pregnancy in Denmark as an example: If you hire a woman in Denmark, and she has a baby 5 months later (or 2 days for that matter), you must pay her salary for a year. If you hire a man, and 3 days later his wife has a child, you must give him 2 weeks paid leave. Many E.U. countries have fantastic quality of life policies like this. Wonderful as they may be; they make running a business very expensive and guess who pays for that? By contrast the USA requires 12 weeks under very restricted circumstances, i.e after 12 months or employment, 50 employees or more, etc.

I'm quite sure that Denmark has the same system as Sweden does in this case, the indemnity for maternity and paternity leave is paid with tax money and not by the company.


JF.