SHOW ME THE MONEY!
Our U.S. correspondent, Stephen Archer, examines the price structure affecting airguns
OK, this month we’re talking money. You know, dosh, readies, moolah, folding stuff. In fact, we’re particularly talking quid versus bucks. The great British pound against the mighty US dollar, and to be even more precise, we’re talking airgun money.
Many, many times, I’ve heard people say that airguns are so much cheaper in the USA than they are back in good old Blighty, and it’s far from unknown for letters to Airgun World bemoaning how the plucky British airgunner is forced to pay so much more for his airguns and equipment than in other countries. Often, the USA is the target of this angst, but is it true? Is the British airgunner really being shafted by the system, or is there more to it than that?
ECONOMIES OF SCALE
Firstly, basic economics plays a part. The UK is probably the world’s second-largest airgun market in terms of numbers of airguns sold, but it’s still much smaller than the US airgun market, as far as I know. There’s somewhere around six million airguns sold in the USA every year, and that’s a big, big number.
As everyone knows, more sales allow any
“cost of US airguns often makes us think the prices are lower than they are”
company’s fixed overheads – rent, rates, salaries, and so on – to be spread over a larger number of sales, so other things being equal, it’s relatively less costly for a company to sell lots of stuff than a small amount.
As US companies are working in a larger market, they can operate at lower margins than UK companies, simply because they’re selling more stuff, and this lower margin means lower prices for you and me, the buyers. Think of Amazon, compared to your local corner shop.
THEN THERE ARE TAXES
One enormous difference between the UK and the US relates to sales tax, or VAT, and as we all know, airgun prices in the UK include VAT at 20%. It’s important to understand that advertised prices in the US do NOT include sales tax, so straight away you should expect advertised US prices to be 20% lower than those in the UK, simply for that reason.
Now, although there is no VAT in the USA, there is sales tax, and amazingly, this varies across the country, state by state, town by town, and it can even vary based on the company from whom you buy a product. Overall, US sales tax averages just 6 to 8% of the purchase price, but in some cases you can buy an airgun with no sales tax at all. However much it is, sales tax is added to the advertised price, and not included as VAT is in the UK. This is one reason why looking at advertised cost of US airguns often makes us think the prices are lower than they are. After adding any appropriate sales tax, the difference is smaller.
Then there’s the exchange rate issue. In the fairly recent past, say over the last 20 years or so, the exchange rate between the US dollar and the pound sterling has been around $1.50 to £1.00. As I write this, it’s $1.30 to £1.00. This also makes US prices appear to be lower than they are because it’s easy to forget to factor in the exchange rate when looking at a US airgun website. Today, the dollar numbers are 23% less than the pound numbers for the same actual price.
So, once you allow for the economies of scale inherent in the larger US market, plus the issue of how sales tax (or VAT) is shown – or not – and the exchange rate factor, it’s easy to conclude that US airgun prices could be lower than in the UK.
IT’S STILL NOT THAT EASY
There’s another factor at work, too. Any product, not just airguns, is likely to be cheaper in the country where it’s manufactured than it is in another country, unless there’s some sort of international trade agreement. This was one of the benefits that the EU was intended to confer on it’s members so there is no import duty on an Air Arms air rifle sold in the UK; nor is there import duty on a Weihrauch air rifle purchased in the UK. However, import duty is charged on an Air Arms or Weihrauch air rifle that is imported into the USA, or any other non-EU country. That’s an increased cost. It works in
reverse for a US-manufactured air rifle, like a Benjamin Marauder, for example, when it’s imported into the UK.
WAIT – THERE’S EVEN MORE
With our Air Arms example, the manufacturer itself provides warranty and post-sales support in the UK. That’s simply impossible to do for the US for obvious logistical reasons. So, the US importer for Air Arms, in this case, Air Venturi, needs to invest money to provide warranty support for the British Air Arms product. This means additional cost for parts availability, service personnel training, marketing and so on. Obviously, this has to be factored into the selling price, and again, that same equation works in reverse, with a US-manufactured Crosman product sold in the UK, for example.
Having got the large-scale issues out of the way, let’s take some actual examples of pricing for the ‘same’ product in the UK and the USA. Even here, it’s not so easy because there might be differences between what appears to be the same product when it’s sold in different countries.
Take power level, for example. The UK has the 12 ft.lb legal limit for air rifles but there’s no power limit in the USA. This means that ‘the same’ product sold in the USA is very likely to be different from that sold in the UK, and those differences might well translate into different manufacturing costs.
LET’S MAKE SOME COMPARISONS
So, how do things work out in practice? First, let’s take a great British product – the Air Arms TX200. In the UK, the TX200 sells for around £450 including VAT. Not surprisingly, the TX200 is more expensive in the USA. The selling price is $600 without sales tax. That’s about £465 at the current rate of exchange.
In reverse, the US-manufactured Benjamin Marauder currently sells for $500 plus sales tax in the USA. The UK price, including 20% VAT, is £600, although that UK price without VAT would be just $480. Pretty close.
It’s clear that a British-manufactured airgun costs less in the UK than it does in the USA, even allowing for VAT. The US-manufactured air rifle is somewhat cheaper in the US than it is in Britain, if VAT is disregarded, but it’s fairly close.
MADE IN THE FAR EAST
Now let’s take a Chinese-manufactured air rifle that’s available in identical versions in both the UK and the US. The SMK QB78 Deluxe is the same gun, name apart, as the Beeman QB78 Deluxe that’s sold in the USA. In the UK, the QB78 Deluxe is sold for about £140. That’s about $145 at the current rate of exchange, if the VAT is removed. The US price, plus any sales tax, is $100. So this example definitely is much cheaper in the USA.
The Taiwanese-manufactured Umarex
MP40 replica (semi-auto) sells for about £320 in the UK, including 20% VAT. Without VAT, that’s about £255 (equals $200). In the US it costs $220 (full auto). Again, very close, but even without any sales tax, the US price is slightly higher, maybe due to the full auto capability.
LET’S TAKE A GERMAN PRODUCT
The Weihrauch HW80 sells for about £395 in the UK, again including VAT. Removing the VAT, that’s about £315, or about $410. In the USA, it sells for $550, without sales tax. Remember that there will be import duty to be paid on arrival in the USA. So again the price is higher across the Pond, largely due to the duty and need for local warranty support and so on.
CZECH OUT SOME PELLETS
A tin of 500 .22 calibre JSB Exact pellets sells for about £14 in Britain. In the USA, the same pellets sell for $17, about £13, but even allowing for VAT and exchange rate, the US price can be quite a lot lower because major US online retailers operate a ‘buy 3, get one tin free’ policy.
Well, we could take many more examples than these, of course, but overall, it’s pretty clear that airgun prices are reasonably similar in both the UK and the USA, allowing for all the factors we’ve described. On average, they could actually be lower in Britain, at least at current exchange rates, and if VAT is factoredout. So, no, we’re not being shafted in the UK – at least not for airguns!
Exchange rates vary daily, sometimes with very significant swings, so it’s pretty well guaranteed that when you read this story, the exchange rate will be different from when I wrote it. That could mean that the prices I’ve quoted will need to be adjusted, but the overall point is clear, I hope.
The Benjamin Marauder is close to the same price in both countries.
Pyramyd Air claims to be the largest dedicated airgun dealer in the world. Here’s a view of the huge packing area in their Ohio warehouse, at lunchtime, so there are few people around.
Here’s just one aisle full of airguns at the Pyramyd Air warehouse. This is what I mean by ‘economies of scale’.
Most US airgunners buy their airguns and supplies on-line from major dealers like Airguns of Arizona or Pyramyd Air.
The Umarex MP40 replica is also similarly priced on both sides of the Pond.