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Moving lights price, why overseas brands is 3-8 times as China?

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Price is very important to buyers. Regardless of the product, most people may first consider the price. There is no doubt that the price of a well-known brand is usually higher than that of a non-known brand.

The same is true in the stage lighting industry. What factors caused the price difference between the two? There's no such thing as a free lunch, we can understand and compare from the cost aspect.

1. Raw material cost

There are at least more than a thousand accessories for stage moving head lighting. The cost of lighting depends on what materials the business chooses.

For example, the light source, the light source of LED stage moving head light can be divided into COB light source and LED module light source. The latter is more expensive and has a higher light output.

Another example is the cooling system (which has an important impact on the light output). The cooling system includes an aluminum sheet cooling system and a copper tube cooling system. Compared with aluminum sheet cooling system, the latter one is very efficient, and the price is also high. Because the price of copper is higher than that of aluminum, it also contains technical costs.

2. Labor costs

Compared with the labor costs in the regions where well-known brand companies are located, labor costs in China are relatively low.

The headquarters of well-known brands are usually located in areas with high labor costs. For example, Elation and ADJ are in the United States; Martin is in Denmark;  Aryton is in France; Clay Parky is in Italy and so on. Judging from the data of the United States and China in 2020, labor costs in the United States are almost 6.29 times that of China. (Data comes from Google)

Even taking other corresponding factors into consideration, such as taxes and fees, the labor costs of well-known brands are generally much higher. From R&D to the production, almost every step requires labor. It can be said that labor costs account for a large part of the enterprise. This is one of the important reasons why Chinese merchants offer low prices.

3. Service cost

The scope of services provided by well-known brands and Chinese merchants is very different.

When foreign customers purchase goods from domestic merchants in China, there are mainly several channels: manufacturers, trading companies, e-commerce platforms, etc. The services provided by these merchants are generally to provide customers with goods, and provide free accessories and online technical support during the warranty period. Generally, there are no offline stores.

The brand lighting not only provides the above services, but also has physical stores offline, and its staff can solve customer problems in time and provide the lighting that customers need in time.

Take Clay Parky as an example. It can be seen from the sales network of its company's official website that there are agents on almost every continent. In addition, Clay Parky has more dealers in the United States and more rental services in Europe. All of the above can serve customers well. In addition to the above, it is understood that some brands will also visit customers offline, conduct field research and promote new products.

Therefore, we can conclude that while buyers are getting convenience, the price of buying and using lights will inevitably increase a lot compared with simple domestic services.

4. Packaging cost

The packaging of stage moving head lights is mainly carton and air box.

As far as I know, the price of some flight cases can be sold more expensive than the price of lights. The air cases of well-known brands are generally of very good quality and relatively high prices. The flight cases sold by Chinese merchants are generally not more valuable than lights. In addition, carton packaging is more cost-effective, and manufacturers generally provide it for free (in the case of not customizing the carton).

The carton is generally matched with foam or pearl cotton, and pearl flakes are usually 2-3 times more expensive than foam. The use of pearl cotton makes the light safer during transportation and more user-friendly.

Therefore, in terms of packaging, air boxes or cartons, foam or pearl cotton are used. The cost is also different.

5. R&D costs

R&D costs are part of corporate expenditures.

Competition in the digital age is fierce, and R&D is the key to the management of strategic development. Enterprises will undoubtedly need to spend a lot of time, energy and money.

Businesses at home and abroad in China will have to invest in research and development costs to improve market competitiveness. But there is no doubt that the cost of investing in well-known brands will be even greater. Because they are almost at the top of the pyramid, they need breakthroughs and innovations more than anyone at any time. The price difference is also produced here.

Taking the G**S** brand of a relatively well-known listed company in China as an example, the annual research and development expenses in 2020 will be RMB 3,111,500, accounting for 14.54% of the total operating cost.

Compared with some Chinese merchants, they are only responsible for production and OEM, and do not have independent research and development capabilities, so there is basically no cost here. For Chinese businesses with their own R&D and production teams, R&D costs will not be too high. Because the stage moving head lighting industry belongs to a niche industry, generally small and medium-sized enterprises exist in the majority.

Therefore, the R&D cost of the Chinese factory will not be very high.

6. Marketing costs

Marketing expenses are also one of the reasons for the price difference.

A brand can be world-renowned, in addition to the hard power of its own products, marketing also has an important influence on it. In the stage lighting industry, this is no exception.

Whenever we enter the official website of some well-known brands, we will be attracted by colorful and interesting promotional pictures.

Behind this effort is the professional marketing team behind them. In addition to the promotion and marketing on their official website, they will also enter popular online platforms to attract traffic, such as LinkedIn, Instagram, Facebook, Youtube, etc. And you will find that the web pages of most Chinese merchants are relatively subtle, and there are relatively few merchants stationed on overseas platforms. Among them, there are few professionally operated companies.

Also take the G**S** brand as an example, we can use its marketing expenses as a reference.

The following is the sales expenses in 2020 (including advertising fees, exhibition fees, rental fees, loading and unloading fees, etc.) of RMB 35,060,800, accounting for 14.54% of the total operating costs; sales expenses include advertising expenses and other marketing expenses, so you can know the marketing expenses Account for part of its expenditure.

Compared with most Chinese merchants who do not do or do little marketing, their marketing proportion is still relatively high.

7. Trade costs

We know that the headquarters of well-known lighting brands are located in areas with high labor costs. In fact, most of their factories are located overseas to reduce costs.

Therefore, import and export costs are also added to the unit price of the product. However, Chinese suppliers generally quote ex-factory prices (EXW) or free-on-board prices (FOB), and the transportation costs are reported to customers based on the actual quotations of the freight forwarding company, and the prices are very transparent.

It is particularly friendly to middlemen outside of China. Customers can also specify freight forwarders, so that prices are more transparent. When buying high-value moving head lights in bulk, the savings are even higher.

All in all, trade cost is also one of the important components of cost.

Therefore, we can know that due to service, marketing, research and development, labor, trade, packaging costs, etc., the price of stage lighting in China is generally lower than that of well-known brands.

Low price is one of the reasons why overseas businesses are willing to find Chinese businesses to import lights.

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