European Optics & Exchange Rate

[tdbaugha]

Does anyone in the optics sales industry know if us Americans will see European brands become less expensive in the future due to the exchange rate? The euro is tanking and the exchange rate has shifted towards the dollar by over 20% so far.

 

[PathFinder]

Not likely. Price is ultimately set by the consumer...as long as people are paying the current prices, they aren't going to drop prices because of the exchange rate.

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[tdbaugha]

Not likely. Price is ultimately set by the consumer...as long as people are paying the current prices, they aren't going to drop prices because of the exchange rate.

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That's not how it has worked in any other consumer good that I have purchased where an exchange rate was at play. European windows & doors right now are getting price drops, for example.

 

[Macintosh]

If the euro tanks then distributors will see their dollar go further, for sure. However, if costs are up as a result in EU then they also may have to raise prices and this could allow them to do that more easily. In general the more mass-market stuff is more likely to fluctuate like a commodity, compared to higher-end lower-sales-volume stuff that I associate with european optics. If the outlook is for this trend in currency exchange to remain for a while then it's more likely we'll see some movement, but if the big-picture outlook indicates it will only last for a few months or year or so, then its not un-likely that we wont see any movement, as its always harder to raise prices again down the road. Regardless, a better US:EU exchange without any other factors in play would make it more possible to lower the US consumer price, but how much of that is passed on to us is dependent on a lot of factors. If a distributor is really pinched for margin already and this only puts them at a healthy level, or if they feel the price is already where it should be to accomplish the level of sales they think is right in their overall strategy, then we wont see much if any change. If they have been unable to make the product competitive due to pricing in the past, then this may be an opportunity for them to take market share by pricing more competitively or by offering other products that they haven't carried in the past due to not having enough margin to make it work.
Also, depending on the timing and cadence of their ordering and stocking inventory it could be quite a while until that change trickles down to us, or it could happen faster.

 

[AZ_Hunter_2000]

Could be a great business opportunity.

Empty your savings/retirement accounts (pay all applicable taxes). Fly over and buy all of the optics that you can. Don't overlook the VAT. Fly them back and don't forget to report them to US Customs and pay all associated taxes. Now you can finally sell them and make a "killing". With the new regulations, you also get to pay income tax as all sales will be reported (outside of cash deals in person).

On a more serious note...
For most things coming from Europe, or anywhere else, the prices are not dropping due to exchange rates. You pretty much need to go there for vacation to garner any tangible benefit to an advantageous exchange rate; even then their damn taxes tend to the great equalizer.

 

[josef]

Most if not all sales to US distributors is in USD so all of that FX gain is being made by the European companies. With whats happening in terms of inflation I wouldnt expect those companies to drop their USD price any time soon.

You could purchase optics on the retail market from Europe in euros but their prices are already so inflated with other taxes that you likely wont see much benefit.