SHOW ME THE MONEY!

Our U.S. cor­re­spon­dent, Stephen Archer, ex­am­ines the price struc­ture af­fect­ing airguns

Airgun World - - Squirrel Stalking - Stephen Archer is the Pub­lisher of Hard Air Mag­a­zine, http://www.hardair­magazine.com.

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.

EX­CHANGE RATES

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.

CON­CLU­SIONS

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!

IM­POR­TANT NOTE

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.

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