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European Economic Pain and Backpacks

Hello there I have never accessed this forum before seeing the European event. Apologies if I am breaking any rules I am a bit unfamiliar with this medium,

Anyhow this is about the backpack.

I study commerce and economics, I am from Australia, I am used to ridiculous shipping fees and painful conversions with AUD = 0.69 USD(heh) at this time and shipping is a nightmare if its not just from China.

 

The issue I think comes down to a few factors but the strength of the USD has probably the heaviest impact with around a year ago 1 Euro buying ~1.20 USD. Now combine the fact its reached parity, recent economic supply strain and the EU's frankly hellish landscape to import to LTT has few options to actually remedy this issue for the Europeans.

 

So not only are Europeans using Euro normally used to a more favourable exchange rate but those using non-Euro currency are also feeling the pain. The reason for this parity is economic where economic pain in the US has lead to lowered imports into the US and the war has lead to higher imports into the EU from the US (to make up for lost supply from Russia and Ukraine). Currency is weird but I think this is contributing the feeling of unfairness from European people.

 

The taxes issue is something LTT has no control over, the EU is painful when it comes to importing and the difference between Britain pre and post Brexit shows you that exactly. Many seem to think the solution is simply having more local options but the simple fact is LTT doesn't have the scale to deal with the EU and shouldn't run their product section at a severe loss to accommodate those who simply "want it" but clearly aren't wanting it enough to jump the hurdle of a mark-up.

 

Its expensive, that's a fact and on top of that there is a specific set of circumstances that we have occurring to make things generally harder to buy. This combined means some people won't be able to afford this and it won't be worth it for a good amount of people, here in Australia it costs around 20 minimum wage hours including shipping. If I get a windfall of cash I may consider it but in my normal day to day finances I won't buy it. That is my response, I am going to just accept that the product is NA focused. That is normal for Australian buyers because we are used to it, EU buyers may be less used to this reality

 

The other factor to acknowledge here is the very real impact interest rates increasing may have on business. Not only is demand lowered so it becomes even harder for scale to reach long distances but for the company to invest in a logistics solution for the area would take a significant amount of money and taking on a loan for that in this climate is an uncertain decision at best. 

 

This is also, you have to remember, a Linus bag, he speaks about how he basically makes stuff for himself at a larger scale as Merch. This is very unique and sets out a basic idea about the business and how it operates. He as an end user doesn't look for cheap and quick solutions he specifically goes out of his way to pay more for products so they are "right" the first time.


I as an Australian understand the pain of Europeans but fundamentally LTT is operating in a world of uncertainty and as such it is going to prioritise maintaining its scope to a healthy size so its still profitable. This isn't a Linus decides how much money he does or doesn't get this merch goes into supporting the people LTT employs, assists the projects they create and thereby becomes a part of the content you watch.

 

TLDR:
Taxes, Interest Rates, Inflation, Currency Conversion and Economic Realities conspired together to take the backpack off the back of European Nerds. Business profitability must be prioritised otherwise Linus products don't get made ever.

 

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10 hours ago, CatisEconomics said:

Its expensive, that's a fact and on top of that there is a specific set of circumstances that we have occurring to make things generally harder to buy. This combined means some people won't be able to afford this and it won't be worth it for a good amount of people, here in Australia it costs around 20 minimum wage hours including shipping. If I get a windfall of cash I may consider it but in my normal day to day finances I won't buy it.

Keep in mind that over in Australia, the minimum wage is about 15$ an hour, and that it easily covers the cost of living; I live in Portugal, where our circumstances are much worse, and this is at the price where it's the sort of thing you'd spend money on maybe once or twice a year (about 65 minimum wage hours, with a very high cost of living). It's definitely an extremely high price for a backpack, for us at least, as our purchasing power is about 2-5x worse.

Ryzen 7 3700X / 16GB RAM / Optane SSD / GTX 1650 / Solus Linux

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While the current exchange rates are likely a factor for most.

There's also the fact that LTT charge VAT but their courier/ shipping/whoever isn't correctly recording the ioss information with the parcels. So pretty much everyone in the EU pays ~ 20% vat at checkout then another 20% + import duty upon receiving the parcel. While LTT do refund that original vat if you provide evidence of the double payment, I assume its a loss for them that they are just eating and not everyone is in a position to wait for that refund, particularly in the current cost of living crisis.

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19 hours ago, CatisEconomics said:

Hello there I have never accessed this forum before seeing the European event. Apologies if I am breaking any rules I am a bit unfamiliar with this medium,

Anyhow this is about the backpack.

I study commerce and economics, I am from Australia, I am used to ridiculous shipping fees and painful conversions with AUD = 0.69 USD(heh) at this time and shipping is a nightmare if its not just from China.

 

The issue I think comes down to a few factors but the strength of the USD has probably the heaviest impact with around a year ago 1 Euro buying ~1.20 USD. Now combine the fact its reached parity, recent economic supply strain and the EU's frankly hellish landscape to import to LTT has few options to actually remedy this issue for the Europeans.

 

So not only are Europeans using Euro normally used to a more favourable exchange rate but those using non-Euro currency are also feeling the pain. The reason for this parity is economic where economic pain in the US has lead to lowered imports into the US and the war has lead to higher imports into the EU from the US (to make up for lost supply from Russia and Ukraine). Currency is weird but I think this is contributing the feeling of unfairness from European people.

 

The taxes issue is something LTT has no control over, the EU is painful when it comes to importing and the difference between Britain pre and post Brexit shows you that exactly. Many seem to think the solution is simply having more local options but the simple fact is LTT doesn't have the scale to deal with the EU and shouldn't run their product section at a severe loss to accommodate those who simply "want it" but clearly aren't wanting it enough to jump the hurdle of a mark-up.

 

Its expensive, that's a fact and on top of that there is a specific set of circumstances that we have occurring to make things generally harder to buy. This combined means some people won't be able to afford this and it won't be worth it for a good amount of people, here in Australia it costs around 20 minimum wage hours including shipping. If I get a windfall of cash I may consider it but in my normal day to day finances I won't buy it. That is my response, I am going to just accept that the product is NA focused. That is normal for Australian buyers because we are used to it, EU buyers may be less used to this reality

 

The other factor to acknowledge here is the very real impact interest rates increasing may have on business. Not only is demand lowered so it becomes even harder for scale to reach long distances but for the company to invest in a logistics solution for the area would take a significant amount of money and taking on a loan for that in this climate is an uncertain decision at best. 

 

This is also, you have to remember, a Linus bag, he speaks about how he basically makes stuff for himself at a larger scale as Merch. This is very unique and sets out a basic idea about the business and how it operates. He as an end user doesn't look for cheap and quick solutions he specifically goes out of his way to pay more for products so they are "right" the first time.


I as an Australian understand the pain of Europeans but fundamentally LTT is operating in a world of uncertainty and as such it is going to prioritise maintaining its scope to a healthy size so its still profitable. This isn't a Linus decides how much money he does or doesn't get this merch goes into supporting the people LTT employs, assists the projects they create and thereby becomes a part of the content you watch.

 

TLDR:
Taxes, Interest Rates, Inflation, Currency Conversion and Economic Realities conspired together to take the backpack off the back of European Nerds. Business profitability must be prioritised otherwise Linus products don't get made ever.

 

Thank you for the analysis and presenting it in a very digestable way. I would be very eager to hear Linus or Nick's thoughts and how they plan to tackle this.

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1 hour ago, inveretd_fullback said:

Thank you for the analysis and presenting it in a very digestable way. I would be very eager to hear Linus or Nick's thoughts and how they plan to tackle this.

 

It seems like if you actually read what OP said, you'd see there is really nothing they can "tackle." 

Your "PC master race" thing is cringe. 

 

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11 hours ago, NunoLava1998 said:

Keep in mind that over in Australia, the minimum wage is about 15$ an hour, and that it easily covers the cost of living; I live in Portugal, where our circumstances are much worse, and this is at the price where it's the sort of thing you'd spend money on maybe once or twice a year (about 65 minimum wage hours, with a very high cost of living). It's definitely an extremely high price for a backpack, for us at least, as our purchasing power is about 2-5x worse.

Oh heh our minimum wage doesn't cover cost of living due to a bunch of factors but basically its getting tight, I did the estimate number of hours as a good way to convert the buying power. The thing about my analysis is that the product is in a bit of a hard spot generally for anyone in the EU, my best advice if you really want to be able to purchase this is either seek to talk to local representatives or create the demand to justify the bag being brought over to Europe, like if there is thousands of buyers from Europe willing to get over that price then clearly its a viable business method. Anyhow its a product and merch at that so getting mad at it is less productive than just getting something else. 

 

Tbh if you should be mad at anyone its Russia's government for making everyone's lives worse

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