I work in a gear store in Australia and to be honest I am constantly amazed at the price of gear on US sites like Backcountry. A Theta AR from there costs US$500, which is our wholesale price. Some might think that a 100% mark up is egregious (I don't know what US stores do) but it is typical of the outdoor industry. In fact, as more and more shops are becoming vertically integrated, the mark-ups are only increasing.
The average mark-up in my store is 100%, that's standard for everything from sleeping bags to jackets to stoves to socks. The reason it costs us $500 dollars to buy a Theta AR is that the supplier for Arcteryx in Australia, Sea to Summit, imports the jacket, thereby incurring shipping and import taxes and then tacks their own profit margin on it, at least 20-30% as someone already mentioned. In the US the retailer mark-ups may only be around 20-30%, but they get the gear more or less directly from Arcteryx. So if we could buy directly from Sea to Summit we would get jackets at more or less the same price as Americans, but in order to run a shopfront here in Aus costs a lot more than in the States, as has already been hinted at. This doesn't necessarily mean that a 100% mark-up is not excessive, but at least you can see it's not simply retailer "greed" that is the issue.
But take a store like Kathmandu, Australia's largest outdoor retailer by far. They make almost all the gear they sell and they still charge around 900 dollars for their "top of the line" Pro Shell jacket. Or at least, that's the RRP. Now keep in mind this jacket is not made in Canada, it is not nearly as good as the Theta, and the cost to Kathmandu of producing and sending that jacket from its factories in China to the shopfront in Sydney or Melbourne is certainly a lot less than it costs Arcteryx to produce a Theta and send it to a retailer in, say, New York. So what's the deal with this pricing? If you thought Paddy Pallin's 100% mark up was excessive what do you think about Kathmandu selling an inferior, more cheaply produced jacket at a similar price, with a mark-up of somewhere between 500 and 1000%?
Of course you might argue that Kathmandu is shooting themselves in the foot with this extortion because surely no-one is going to buy a Kathmandu inferior Pro Shell jacket when they could have a Theta AR for the same money. But the RRP is only half the story. Kathmandu hardly EVER sell an expensive item of clothing for anything close to its retail price. Instead, they jack up the RRP to make the jacket or whatever seem to the average buyer to be on a par with a Theta AR from down the street at Paddy's. I mean, it has the same "Gore-Tex Pro Shell" tag, right? Then, after the jacket has been sitting up there for a few weeks Kathmandu has a HUGE sale. And I mean HUGE. Like 50% or more off everything in the store. So suddenly this 900 dollar Pro Shell jacket is 450 dollars and people buy it thinking they are getting an awesome deal, when in fact they are still paying at least 100% more than it cost Kathmandu to put the jacket in its shelves.
Now I'm not saying that people should not buy Kathmandu jackets at 450 dollars rather than Theta ARs for 1000 dollars. What I'm saying is that this sort of price fixing is rife in the Australian outdoor industry. It's a bizarre business model that I think reflects the market here. Stores like Macpac, Mountain Designs and Snowgum are slowly adopting the Kathmandu business strategy: vertically integrate as much as possible so that you avoid getting hit with middle man costs, and then mark up your products to match the competition so that your gear becomes bestowed with the appearance of quality, then have several massive sales a year and sell your products at "50% off" but still at 200% more than what it cost you to get them onto your floor.
I personally think it is absurd that Kathmandu and the like are able to advertise a jacket or sleeping bag at 500% plus of wholesale cost, and then have what seems like more sales than non-sales in order to move previously overpriced gear, but Australian consumer law seems to allow it and Kathmandu is doing amazingly well. Meanwhile stores that import what most would agree to be far superior products from the US are struggling to sell things are 100% mark up. I'm not saying that Paddy's or the independent gear stores are necessarily competing in the correct way, but if things continue the way they are, and if there is no other way to compete with Kathmandu other than adopt its business model, that will be the end of US brands in Australia... at least until companies like Arcteryx start allowing their products to be sold online to foreign markets.
And even then, will consumers be willing to buy packs, pants, shoes and jackets before having tried them on? Especially given how much it costs to ship things back and forth between the US and Australia (like 30-50 bucks for a pair of shoes, each way). I guess it's the difference between being able to walk into a store and try stuff on (albeit, minus the hassle of talking to salespeople and parking in the city) and buying stuff online that you think looks and sounds good, you think is the right size, at the risk of having to send it back and incur $100+ more in shipping costs.