RE: Roomba in stock at LetsAutomate

["Kevin Hawkins" <lists@xxxxxxx>]

    As someone who used to be involved in the US/UK import b= usiness in a big
way I think there are valid points on both sides here, to see a product
appear in the UK at twice the price that it is in the US is obviously
frustrating.

   A UK company setting itself up as a 'distributor' for a US com= pany has a
responsibility to ensure that such a model works. This means that you can effectively bring a product to market in the UK for a reasonable 'street price' in comparison to the US price. Many things conspire unfortunately to=
make reasonable quite difficult to achieve.Obviously if you drift too far >from n
which can become very problematic.

  In a true 'distributor' type model then the importer may have to sup= port a
reseller tier underneath the street price to allow for sales to dealers. None of the current broad based HA names in the UK operate like this so the= y
have a little more freedom here. An importer besides the obvious costs of duty, freight (US-AIRPORT-AIRPORT-UK), customs fees, currency fluctuations<= BR> may also have the costs of localisation of the product (UK power adaptor ?)= ,
marketing, compliance to UK regulatory issues and warranty. In my experienc= e
it is very difficult nowadays to set up a model that would allow the produc= t
to be imported through a distribution network in the UK and not end up with=
at least a $ to $ conversion at the street price level.

  In some cases however localisation actually protects the seller from= grey
market imports and the 'added value' of having local support, warranty and<= BR> 'off the shelf' availability of a product means that a satisfactory balance=
is achieved. It is perhaps the marketing costs associated with a product that are the most significant hidden cost, just consider how many units of<= BR> something retailing at =A3250 have to be sold to cover the costs of one pag= e
of advertising in a magazine (circa =A31200).

    Without wishing to represent any companies decision in a= ny way on
pricing and other issues I think what LA will have experienced is that the<= BR> manufacturers of Roomba are just not ready to enter foreign markets. They have a very low cost (=3D excellent value =3D low margin) product and they = seem
to be able to sell all they can get. To professionally enter a market needs=
training, marketing, CE approvals, spares & repairs etc etc and also th= e
ability to trade at significantly lower margin. They (Roomba) probably can'= t
do that, nor do they need to currently. So what I guess LA have done is
simply a convenience buy at a small discount from the manufacturer and had<= BR> to take the risk on all these other issues themselves. If one goes wrong they probably lose their profit on them all. The result is unfortunately a<= BR> very high street price when compared to the US street price and that doesn'= t
reflect well. It is unfortunate when these things happen and it makes LA look the bad guys but I'd wager they're making less on these and more on some much lower cost items. They've provided a service to the market in
offering something that wouldn't otherwise be available which might
interestingly enough also get a lot of editorial coverage and kudos for the= m
in the HA market.

   So I think in hindsight as everyone else has said LA have give= n you an
option that you didn't have before and I think that's great news.  If = this
level of pricing difference occurred on all their products then natural
market forces would change it but thankfully it doesn't. I would hope in general that an equivalent =A3 to $ conversion (50%) uplift would be
achievable for most things, occasionally though market volumes conspire to<= BR> mean that even =A3/$ becomes unrealistic e.g. in the X10 markets.

     I don't feel that Roomba fits into this because I = am sure it will be
the manufacturers that can't afford to get the pricing right in the UK not<= BR> any extra profit that LA is seeking to make.    So overall -= much
appreciated LA.


  Kevin

  -----Original Message-----
  From: K. C. Li [mailto:li@xxxxxxx]
  Sent: 02 December 2002 16:50
  To: 'ukha_d@xxxxxxx'
  Subject: RE: [ukha_d] Roomba in stock at LetsAutomate


  On Mon, 2 Dec 2002, BUTLER, Tony, FM wrote:

  > As the UK retailer, they would have to supply it with a warrant= y AIUI -
  > whether this is an actual roomba warranty or an LA undertaking = to
  > replace/repair within 1 year I don't know.....

  That is a good point. The Roomba is a brand new product from a brand= new
  company. The long term reliability is uncertain at the moment. We ha= ve
  products that originally come with a mere 15-day warranty only. We a= re
  effectively covering the warranty risk ourselves.

  The price of Roomba in Let's Automate's website is not as cheap as U= S$199,
  I agree. However, there are also those hidden costs that must be add= ed to
  the final price as mentioned by Mark H. If thing doesn't go wrong wi= th the
  product and one can wait a while for one, importing directly is a vi= able
  option.

  Regards,

  Kwong Li
  li@xxxxxxx   Laser Business Systems Ltd.
  http://www.laser.com


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