Prices Drive Australians To Grey Market For Hardware and Software 280
An anonymous reader writes "The Australian government has been running an inquiry into why technology is so much more expensive to buy down under than in the U.S. In response to the price difference, many consumers are turning to the Internet to buy tech that is imported through unofficial channels at cheaper prices from the U.S. Not to miss out on sales, some retailers are starting to set up special websites that sell this way too. The so-called 'grey market' can save you cash, but could it cost you more in the long run? This article looks at some of the potential problems for people buying technology this way." A companion article examines some of the nitty-gritty of price differences between Australia and the U.S., including the observation that entry-level salaries skew higher in Australia.
Price fixing by camera makers push me there. (Score:5, Interesting)
I buy grey market Lenses from Canon. Because of the price fixing they do for the US market. I can save hundreds, and in some cases THOUSANDS by getting a grey market L series lens over the US market lens.
Re:Price fixing by camera makers push me there. (Score:5, Informative)
This is a major factor.
A few years back, I bought Canon's 24-70mm f/2.8 L lens from the US. Including shipping, customs charges (which included GST), and the like, it was around $AU1400. The local price? A mere $2000 or so (can't remember offhand, but I do know it was a significant saving.)
A similar story: I bought a box set of the first four series of Doctor Who from the UK (Ecclestone and Tennant's series, basically.) Cost: about $AU60. A single series in Australia costs $AU90 - so I got all four series for less than the price of buying one locally.
There's no doubt that Australia is being gouged. The only question is, what's a reasonable markup, given that we are a small, geographically spread nation? (Population: about 7.5% that of the USA. Land area: about that of the 48 contiguous states. You do the math.) That there almost has to be a markup is a given ... but I don't think that what we're currently paying is particularly reasonable, all things considered.
Re:Price fixing by camera makers push me there. (Score:5, Interesting)
There is no "reasonable" markup argument when they do region and country price fixing. I can buy any canon lens significantly cheaper from friends in Japan and pay for shipping than at any location in the USA. Canon is marking up HARD the lens prices for other countries.
I've been buying lenses at prices that many dealers would kill for. And the lens was bought at a retail camera stop in Japan and packed in a box and shipped to me here in the USA.
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Curious, to get an idea on what the savings would be...
What could you get the 70-200mm 2.8 IS II lens for over in Japan...what would shipping add onto that to get it into the states? I recently got a 5D3..and am jonesing really bad for this lens...it is about $2200 here on Amazon.com for the US.
Also, do you have someone in
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The other issue is warranties. I don't know Canon's take on this but Nikon will refuse to fix a grey market camera or lens. In fact, if you were Australian, purchased your camera from Nikon Australia and then moved to the US, dropped the camera and sent it to Nikon, they would not touch it.
So it gets even more annoying and more complex....
If you do this from Europe ... (Score:3)
Re:Price fixing by camera makers push me there. (Score:5, Interesting)
I'm not excusing Canon's pricing, but the higher prices outside Japan are not completely unwarranted. Being a Japanese company, Canon's budget projections and business decisions are based on Yen. Whenever they sell in a market which uses a different currency, they have to take into account the risk of currency fluctuation. That is, their pricing outside of Japan has to be based on their worst-case projection for what will happen to the local currency in the coming year. Otherwise they could end up in a situation where they're selling lenses for less than it cost them to make.
You OTOH are not looking at an annual operating budget. You're looking at a single snapshot of currency exchange rates on the day you buy. That considerably reduces the window of currency rate movement, and so Canon's markup outside of Japan seems enormous to you. You're only concerned with how much the USD could drop against the JPY in the day it takes your Japanese friend to buy and ship you the lens. Canon is concerned with how much the USD could drop in the year it takes them to sell their inventory, then convert that USD back to JPY.
I got burned by this a few years back. I took a cross-border job in Canada at near my then-current salary converted to CAD (about USD$0.97 at the time). The first few months were great - the CAD went up to USD$1.07, meaning I'd essentially gotten a 10% pay raise. But then a little over a year later it crashed, dropping to below USD$0.80. None of this affected my Canadian co-workers, since their living expenses were in CAD. But I had to convert my paycheck to USD to pay my bills, so it hit me hard. Any time you're conducting long-term business which involves currency exchange rates, you have to factor in potential movements in exchange rates. (I kept most of my pay in a Canadian bank until the CAD eventually went back up to around USD$1.00. But the money I had to transfer to pay bills at the time was "locked in" at ~USD$0.78. It's a loss I'm never getting back because I didn't consider the possibility of the currency value changing as much as it did during my employment.)
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I am very interested in this as well. I live in Norway and we always end up paying way more for everything, and I would really like to know why. Some things are obvious like food, because it is locally produced and there are high tariffs. However electronics, movies, toys etc has no import duties and yet often costs more. I think the pattern I have seen is that things which are quite expensive are reasonably priced here while small cheaps things are more expensive. Often by magnitudes. Perhaps they speculat
Re:Price fixing by camera makers push me there. (Score:5, Funny)
A similar story: I bought a box set of the first four series of Doctor Who from the UK (Ecclestone and Tennant's series, basically.)
Well, that highlights the real dangers of buying grey market. Instead of the first four series (Hartnell and Troughton), they fobbed you off with some modern imitation with Billy Piper in it!
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If Australia is an island, so is America....
It's generally considered a continent. It may be remote from the US and Europe, but it is certainly closer to China and Japan where Most Things are made.
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Re:Price fixing by camera makers push me there. (Score:5, Interesting)
So why is downloaded software marked up by similar or greater amounts?
And how come I can get a camera from the US cheaper than a vendor who would presumably have access to cheaper shipping than individuals?
Re:Price fixing by camera makers push me there. (Score:4, Informative)
> So why is downloaded software marked up by similar or greater amounts?
My guess? Historically, AUD$1 == US$0.50, and quite a few people haven't realized yet that they're now more or less at parity. As a result, I suspect quite a few American companies are just doubling the nominal US price out of habit.
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The difference between en_AU and en_GB is quite small, less even than the difference between en_US and en_CA. And Australia is where a lot of UK anime DVDs are mastered, because they're both PAL regions.
-uso.
Re:Price fixing by camera makers push me there. (Score:5, Insightful)
Is there a reason that there 'almost has to be a markup'(beyond the costs of shipping)?
I don't know if this applies to Australia, but some products are more expensive in the EU because the legally mandated warranty for the product is longer than for the US. I can buy a TV here in the UK, and if it breaks within three years there's a good chance it's the place I bought it from's problem (there's some complication, depending how long it lasted). If a manufacturer makes shoddy products, they're either going to do some QA and try and send the better products to the EU, or increase prices to cover the increased costs.
(Similarly, a company might increase costs in the USA to pay for the higher cost of liability insurance.)
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Also, in Germany, 20% tax is included in the price. In the US, tax is added to the price.
So a $1,200 computer in Germany is actually the same price as a $1,000 computer in the USA, before tax.
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Also, in Germany, 20% tax is included in the price. In the US, tax is added to the price.
So a $1,200 computer in Germany is actually the same price as a $1,000 computer in the USA, before tax.
Since there's no place in the US that charges anywhere near 20% sales tax, that's small comfort. The price you pay at the register is still going to be less in the US as a result.
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Yep. 6-7% is typical sales tax of most of the US, though it varies from zero (in Delaware and New Hampshire) to over 11% (in parts of Arizona and until recently Illinois). And many people dodge the tax by buying online from a company that doesn't do business in their state; legally they're supposed to pay the tax themselves to their state, but it's a common one to dodge.
Re:Price fixing by camera makers push me there. (Score:5, Informative)
This does not explain why it's often 30-50% cheaper to buy from a foreign source and pay individual shipping from overseas. Even taking into account the 10% GST it's obvious Australians are being charged more becsause people think they can get away with it.
These same people are now kicking and screaming because the internet destroys their easy scam.
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Is there a reason that there 'almost has to be a markup'(beyond the costs of shipping)?
Australia's position relatively far from anywhere
It's closer to the heard of world manufacturing than Europe OR the USA, by a long margin.
Re:Price fixing by camera makers push me there. (Score:5, Informative)
Depends on the laws of the land, actually.
In Europe, for example, import duties (25%+) and VAT (20%+) are added on to the cost of a good you see. When the price tag says $700, you pay $700. Not like North America where it's $500+tax.
Of course, the other reason is local distributors are often the cause. You see, a manufacturer rarely if ever sells direct to the retailer. Instead, they sell to local distributors, who usually get exclusive distribution rights to a geographic region. Usually a country-sized portion, sometimes a continent, othertimes much smaller. Depends how big the manufacturer is, and how much product gets moved - the more popular, the smaller the regions tend to be.
That distributor is who determines the local price based on the MSRP and what they sell to retaliers at. And often times, that distributor enforces the distribution agreement for multinational retailers. Exceptions usually are the likes of Amazon (who may shift US inventory to other countries), or Walmart (who has their own huge logistical department who may receive goods from many distributors at a central warehouse in another region). Or have sufficient muscle to be able to shut out a local distributor if they try to gouge (e.g., Wal-mart).
In Canada, the retailers are often complaining that the Canadian distributors are the ones marking up the goods - they can't really move too much on prices because they're paying more.
And yes, I've seen many small businesses complain - they often will admit that a customer can buy the same product from Amazon.ca cheaper than what the store can get it from their distributor (which is why the store doesn't stock the product).
And there can be multiple layers of distributors as well. When some store claims to "cut out the middleman", they're lying. There's always a distributor somewhere along the line (and if there isn't, on of the existing distributors will offer it, if possible).
And yes, said distributor can often be a subsidiary of the company - e.g., Canon USA, Canon Canada, Apple Australia, etc. Or a separate company (e.g., Ingram Micro, Digikey). Sole distributorships are also possible (e.g., comic books and stuff are practically only available through Diamond).
And yes, they often do rather monopolistic things as well - like refusing to honor grey-market warranties - they'll suggest you send it back to the store you bought it from).
Re:Price fixing by camera makers push me there. (Score:5, Insightful)
If we want to talk US, the oh-so-terrifying-scourge of drugs-identical-to-their-us-counterparts-but-marked-'only for sale in Canada' is probably worth mentioning. Based on the amount of not-at-all-self-interested hysteria about the safety concerns surrounding these (much, much, cheaper) drugs, you'd think that Canadians were some kind of alien organism with a metabolism based on cryogenic sulfur compounds for which drugs had to be specially formulated...
Re:Price fixing by camera makers push me there. (Score:5, Informative)
You think that's bad... try being in Canada, our drug prices may be less, but our prices on almost everything else are significantly higher than in the USA. There was actually a news article here a while back about cars that were built at a plant in Canada, being $10,000-$20,000 cheaper in hawaii than they were at the dealership accross the street from the plant. I frequently buy other things online to avoid the ridiculous markup in Canadian stores too.
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Same thing here. Home theater stuff can generally be found at half the price in the US vs Canada. Same thing with kitchen and bathroom hardware. Also bizarrely I found some stuff that is "designed in Canada" and is distributed in the US but not in Canada. Using www.kinek.com and other border mail services, Canadians can benefit from free shipping (e.g. from Amazon.com) up to the border. Buying cars (typically a few $k less after taxes and duty and import regulations are taken care of) and tires (easily half
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The manufacturers are doing their damnest to make buying US cars for Canadian use as unattractive as possible.
That includes US dealers outright refusing to sell if they know you're Canadian, to Canadian dealerships not honouring the warranty on a Canadian-registered, US-bought vehicle.
Books (Score:3)
Books are a sore spot for me. Forever we have always had on the jacket 11.99USA/26.99CAN and it really pisses me off.
Sure in the past they could argue about there being a currancy differeance. However how long has the Canadian dollar been at par or better?
Sure they could argue a lag in distrabution, etc... but they still do this for magizines...
It really is silly.
The other thing is electronics? Why? Its not like they produce them... They are all shiped from Thailand, China, Taiwan, etc... Smaller market, di
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books get even more ridiculous once the internet is brought in to the picture. A friend of mine recently discovered that books for his ereader were double the price in Canada as in the US, from the same website (but as long as your credit card is canadian you can't get the american price). You want to claim shipping costs on an ebook that you download from the website?????
I've given up. when I buy anything that I don't need to touch first (like clothing I need to try on), or that can't go bad in transit (li
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Agreed.
Case in point, Chapters. Sure there are brick and morter type costs. However for years now you can look at what you pay online, with free delievry VS what you pay in the store, and it is considerably less. I do the same. I figure sooner or later these companies will wake up, but it has been a very long time, with little change. Too much of it I suspect are monolopies and corporate policies that basically say, "this is the price we are going to charge in this market, because we can force them to pay i
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You are also forgetting that not only are those ebooks have price differances than the US, but also that they are just as expensive or more so than normal books, and have DRM in them to limit how you can even use them. It baffles me how people can just go along with that. Anyway its a big issue with many sides...
Oh I'm not forgetting anything, I am well aware of the multiple different ways the companies are choosing to screw us over. We need fewer corporate protection laws, and more consumer protection ones. I should be able to shop around and buy from whoever wants to sell me the best product at the best price, and the corporations should not be allowed to artificially restrict what I can do with it once I've bought it. Unfortunately the current legal system is exactly the reverse.
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In Seattle, most car dealerships have a "Canadian Customers" website where they steer the import customers. I know that at one time, something pedestrian like a Subaru Outback could almost be double the US price when purchased in Canada.
Although the Louis Vuitton bag my wife got in Vancouver was at least $100 cheaper than in Seattle, even with BC's 12% sales tax and with the Canadian $$ at parity. (Yes, we could have bought it for even less in sales tax-free Oregon - but Vancouver's much more fun than Portl
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The drug pricing and import restrictions are pretty simple to explain. If you look around a little bit you find that the drug manufacturers cut a deal in non-US markets and they do not offer that deal in the US, under any circumstances.
So a pill may be $1 CDN in Canada and $10 USD across the border with the only difference being the labelling on the box. Sometimes the pills are made in the same factory. Part of the problem is the attitude that "people in the US can afford it" and part of the problem is t
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government reimbursement rate is today about 30% of the billed cost
I am nitpicking I guess...but that is a little low. When you say gov't payers I assume you are only talking about Medicaid, and there are only a few states that hover around or below 30% of what they would have been paid by a non-gov't payer for the same service. Most are well above 30%
I don't disagree with your point, just that 30% figure.
More info here http://www.forbes.com/sites/gracemarieturner/2012/08/21/the-real-tragedy-of-obamacare-has-yet-to-be-felt-by-the-poor/ [forbes.com]
Re:Price fixing by camera makers push me there. (Score:5, Funny)
I checked with a skinny canadian friend of mine. He said that he usually just looks at photographs of American 200 mg Advil. That keeps him going for 2-3 days.
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I checked with a skinny canadian friend of mine. He said that he usually just looks at photographs of American 200 mg Advil. That keeps him going for 2-3 days.
We need that much Advil because of the severity of headaches that come from seeing what our politicians are doing with our tax dollars. It has nothing to do with our weight.
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I'll go first. I am in USA and I'm holding in my hand a box of advil ibuprofen tablets 200 mg per tablet. Now its getting late in the morning so if a canadian out there could put down his second molsen breakfast beer for a moment and shovel the snow to make a path to his or her medicine cabinet and report the size of a canadian advil / ibuprofen tablet I'd appreciate it. My hypothesis is that skinny canadian advil tablets are a mere 100 mg per tablet or maybe only 75 mg as opposed to the fatty american 200 mg tablets.
Dunno about canada but here in the UK you can buy 200 mg ibuprogen tablets off the shelf and 400 mg ones over the counter. Smaller dose ibuprofen tablets don't seem to exist in the adult medicine range (I haven't tried looking in the kids medicine range recently). IIRC larger dose tablets exist but are prescription only.
Adult vs child's doses (Score:3)
I looked at the dosage chart on my children's ibuprofen syrup recently and found that the recommended dose for a 12-yr-old [stlouischildrens.org] was the same as the extra-strength pills for an adult (400mg every 6-8 hrs). For my kids old enough to swallow pills I'll just figure out the dose they need and give it to them in tablets.
For what it's worth, I've never seen the point in buying prescription-strength pills for ibuprofen. I've been on 800mg doses of ibuprofen before, and it was much cheaper to just take 4x 200mg tablets
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I'm also curious why the dosage-by-weight tables seem to assume that everyone over 100lbs needs the same dose.
KISS. You can get away with this with a few drugs who have large 'therapeutic windows' - concentrations in the blood where the drug is both safe and effective. Fortunately our bodies tend to be smarter than the rest of us.
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http://www.boots.com/en/Boots-Value-Health-Ibuprofen-200mg-Tablets-16_44701/ [boots.com]
200mg in the UK, and 40p for 16 tablets.
http://www.boots.com/en/Boots-Pharmaceuticals-Ibuprofen-3-Months-Plus-100mg-5ml-Suspension-Strawberry-Flavour-100ml-_1225226/ [boots.com]
100mg dose available for babies and children ("strawberry" flavoured).
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FUD all the way down (Score:2, Funny)
Read the 'article'. Was not impressed. Sounds like a press release from the 'white market' sellers telling Aussies that the 'grey market' is risky at best and could cost them twice as much.
This is so with any product purchased any where from anyone no matter which color they choose to paint their store.
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This.
The price differential is SO large in some cases you can buy a complete spare for less than one in Australia.
The warranty issue on a lot of the higher markup stuff, like media and software is basically zero.
I'd feel a LOT more exposed buying a $500 washing machine from an Australian online company for $50 less than retail than I would buying it for $200 less from Singapore.
As to the wage theory; the large American companies that have pushed hard for "globalisation", and removal of tariffs on trade, the
Ah, the sweet smell of free trade... (Score:5, Insightful)
Worldwide scrounging for the cheapest labor, juciest tax breaks, and laxest regulations for them, region coding and 'grey market' for you.
Low friction international capital markets for them, border and immigrations controls for you.
See, 'free trade' is awesome!
Re:Ah, the sweet smell of free trade... (Score:5, Insightful)
Yeah; I'm waiting for the day they abolish prices altogether and just list the cost of everything as a percentage of your income. That's the pricing model everything is moving towards anyway -- not what something is worth, but what they can get away with charging you. And if any of you asshats stand up and make an "invisible hand" argument, you're waking up tomorrow with a horse head next to you. This is not the result of free trade, but the restriction of free trade. Those corporations are shoving region coding down your throats, signing exclusive contracts and manipulating distribution channels to artificially alter the prices, and buying off government officials to make it all legal. That is not capitalism. It is not free trade. It is exploitative, and should be stopped.
Re:Ah, the sweet smell of free trade... (Score:4, Interesting)
just list the cost of everything as a percentage of your income.
Isn't this pretty much how housing has traditionally been priced for a century or so? Your mortgage payment will be 1/4 your income, the only thing that varies is how much money you rent from the bank = what price the house sells for, depends on the current interest rate and level of financial "innovation" at the time of sale?
And the price of a average mens business suit has always been "about" a average weeks pay? (now at the higher end a fancy suit has been 1 ounce of gold for more than a century, but thats a cultural difference between income and wealth)
Just saying its not new.
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Just saying its not new.
And you're right. I'm concerned about it becoming a mainstream practice, not that it happens in niche markets.
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I'm concerned about it becoming a mainstream practice, not that it happens in niche markets.
It already is mainstream - the international import and export of clothing is restricted. In the UK, Tesco famously lost the court case [telegraph.co.uk] over grey importing of Levi jeans, which they were selling at half the retail price of the officially imported jeans. And so now the only jeans you will in the UK (and the rest of the EU) are officially imported ones. The same thing happens with clothing, motor vehicles, basically everything where there are official distribution channels.
Allowing grey importing would ulti
Re:Ah, the sweet smell of free trade... (Score:5, Insightful)
What that counter-argument does is justify institutionalized usury. Usury is inequity in a transaction when there is not an equal exchange of value. That leads to concentration of wealth. Before the Industrial Age, gross concentration of wealth wasn't as commonplace, but the Industrial Age and mass production has made it possible to concentrate wealth in a fashion never seen before that: rather than ripping off just a few people for a lot, it's now possible to rip off a lot of people for just a little and still get just as filthy rich. The people who control the means of mass production can get filthy rich without ever having to worry about villagers wielding pitchforks; the usury is spread so thin that individual villagers just don't notice the tiny knife being inserted and twisted. Multiply that by hundreds of mass producers, though, and the villagers notice but can't figure out where to march with their pitchforks. That's why the Occupy movements are so disjointed right now; they really don't know who to blame because they have so many tiny little knives in their backs rather than one big one. I miss the good old days when you knew who the Really Bad Guy was. Now there's hundreds of Slightly Bad Guys.
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This is made far worse, BTW, by consumer ignorance of the true cost of manufacture of the things they buy. Products are becoming so complex and involve technologies that the average consumer can't even name much less understand them. They can't themselves determine a reasonable approximation of true value, and so they rely on the mass producers themselves to TELL THEM what products are worth. Consumers simply don't have enough information to even argue the matter. That's a recipe for an economy that no
Oh, for the love of History and Economics (Score:3)
Please, before ever posting on this again, learn about the following:
-Royalty
-The Feudal System
-The Catholic Church ca 1520 especially The Vatican Bank and Indulgence Selling
-International Banking (Niall Ferguson has a great book, The Ascent of Money. You desperately need to read this.)
And the essential problem that Occupy has is that they don't understand that organized whining isn't any more effective than disorganized whining. You have to work to change things - and therein lies the seeds of their fail
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Why is income-based pricing a boogeyman now? Wouldn't that result in the rich paying more, aka a fairer share of sales tax? And I'm not sure why you bring up overly broad concepts like capitalism and free trade, since they're not essentially relevant to this topic. The relevant concept here would be that of the "market", since income based pricing would be the market economy carried down to the individual level -- it would basically be haggling without the time consuming act of haggling. The more left-leani
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do americans *enjoy
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Worldwide scrounging for the cheapest labor, juciest tax breaks, and laxest regulations for them, region coding and 'grey market' for you.
Low friction international capital markets for them, border and immigrations controls for you.
The vast majority if this isn't free trade. There are taxes, levies, and other things that have been applied. NAFTA, isn't free trade either. Trade pacts between Canada/US and Asian countries again, aren't free trade. Those are all fair trade.
In general, the only places where we see free trade, are between states and provinces in Canada and the US, and between several countries in the EU. Or within various provinces inside countries in the EU. And there's a huge difference between free trade, and fai
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I'm curious as to how that works. If you order a tablet from Hong Kong, do they open all incoming mail, try to figure out what you paid, and assess a fee on the buyer before you can pick up your package? That sounds pretty expensive and manpower heavy to implement.
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Most countries require a customs declaration on the outside of the package so they don't have to open it. Also, a lot of times the exporter has to put the recipient's tax number on the customs declaration.
Of course lying on the customs declaration can mean a long, long prison term for the guy picking the item up.
We ship a lot of stuff to different countries and get to follow a different set of rules for almost every shipment. China requires a recipient id number, for example, which is utterly unique to Ch
because of the extra staff needed (Score:5, Funny)
Companies like Newegg and Amazon must employ extra staff to invert the contents of all the packages to be sent to the Australian market. It's hard to have robots do this because of the sheer variety of size and contents. Most electronics are made in the northern hemisphere also to be sold there, so are naturally constructed rightside-up for that market. Employing so many people to flip the products over costs money, which is naturally passed on to customers in that market.
It sucks for our AU friends, but it's the natural cost of being in such a small niche market.
Re:because of the extra staff needed (Score:5, Funny)
Not to mention the fact that discs spin in the opposite direction down in Australia.
Very true (Score:5, Insightful)
Traveled there for work over the years and checked out the computer stores while I was down there. Everything was more expensive by a fair margin, enough to put me in shock. Not just computers either, food, clothes, household goods etc.
Talking to the locals they got in the habit of buying from the US and hoping the warranty wasn't needed. Massive problem and I'm surprised they are finally doing something about it.
I still want a Ute though. Was very disappointed when Pontiac got axed right before they were going to import 500 of them....
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Did you check the wages as well? Prices for lots of things are higher in Canada than the US, for example, because for the longest time our dollar was only 85% of the $US, and our wages were higher.
I mean, it's not like someone somewhere just said "Hey! Let's charge more here than in the US!" and the world colluded on the prices. It's more complicated than just looking at the $US to your currency exchange rate.
1960s Terminology in Y2K Marketplace (Score:5, Insightful)
"Grey Market" used to mean refurbished product, especially the warranty-return product which either worked to begin with (brought back to retailer out of "buyers remorse") or was simply repaired or upgraded. As sales became more global, Corporations negotiated different warranty expectations on new products in different countries, so goods sold in a country with lower consumer warranty guarantees were cheaper, and might find themselves transported to where they were covered by stricter warranty (increasing risk to the manufacturer if the product was faulty).
Today, few of the products sold are actually made by the Corporation whose name is on the warranty. Factories like Taiwanese-owned Han Hoi (Foxconn) churn out product not just for Apple, but for defunct brand names like "Polaroid". The term "grey market" today is applied (by groups like Anti Gray Market Alliance) to patent claim products and plain old "used" sales. The term "grey market" as used in the article is so general that it is really meaningless. Even the product you buy from a "factory direct" website may be the exact same good as the one you buy with another corporation's name on it, entirely. How "grey" is that?
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The term "grey market" as used in the article is so general that it is really meaningless
Not so at all. In fact your use of the terms "Grey Market" is the one that is vague and meaningless. These days Grey Market is quite clearly a distinct term that means in the LEGAL GREY LAND between normal Consumer Market and the BLACK MARKET. So it is clear to all that products bought in this manner are not exactly a forthright business deal, but not illegal either.
On the other behind, your examples are clearly refurbished, pre-owned or privately labelled -- Which have nothing to do with market legality, s
Re:1960s Terminology in Y2K Marketplace (Score:4, Informative)
You can also extend the definition to include used/remanufactured goods that cross borders as well.
(I notice the British/Australian(?) spelling of "grey" is displacing the American "gray".)
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(I notice the British/Australian(?) spelling of "grey" is displacing the American "gray".)
I've always preferred spelling it "grey"; I suspect that it's related to my heavy reading of Tolkein in my youth. Given the proportion of nerds here on Slashdot, I'd not be surprised if others were doing the same.
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I have a brochure from the 1980s talking about the "dangers" of buying grey-market Yamaha pianos. So the term was appropriated for this use quite some time ago.
Its not just technology (Score:5, Interesting)
I have rellies from Oz who when they visit the US stock up on hand and construction tools. Last time they were here they loaded up a suitcase with (among other things) a nail gun and as many of the brads as they could carry. They were really helped out by the fact that their 5 year old son was entitled to the full luggage allowance when flying. You don't do things like that unless it is worth your while.
So what's the downside? (Score:2)
No way man! (Score:5, Insightful)
I'm shocked.
Many factors involved (Score:3)
1. Tax differences - Aussie GST is 10%. No US state has a sales tax that high. Aussie prices are quoted with tax included. US prices are not.
2. Labor costs- US retail workers are paid less
3. Size of the market - Costs in the US can be spread over a much larger customer base than in Australia.
4. Shipping costs - Shipping to Australia is more expensive than to a US address, even from Asia!
5. Import duties differences
6. Copyright and patent licensing fees differences
There may be others.
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In many cities in California, the sales taxes (state, city, etc.) add up to 9.75%. The real difference is the second statement you make (sales taxes not included in prices).
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3. Unless the product is different in Australia, the cost should be the same. Not a factor.
4. That will be similar for regular store vs. grey market. Not a factor.
5. They should be the same regardless of source. Not a factor.
6. They should be the same. Not a factor.
That leaves 2. as the only difference and that's not enough to explain the price difference.
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I was not addressing the gray market, I was pointing out why Aussie prices are expected to be higher than US prices.
Most companies require their country divisions to factor in the costs of doing business in that country to the prices they charge in that country. They don't spread their costs over all their customers worldwide. They do it by maket. It costs more to do business in Australia than the US simply because of the size of the market.
Ea
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1. Tax differences - Aussie GST is 10%. No US state has a sales tax that high. Aussie prices are quoted with tax included. US prices are not.
Clearly you've never been to Chicago (yes I know its not a state but more people live here than in many other states). Ok, fine, so its not 10.25% general sales tax anymore after the county lowered rates a bit--now its just 9.5% unless you are buying prepared food near the center of the city in which case its back up to 10.5%.
I always wonder why the Apple store on Michigan Ave does so much business...You could order the same thing from amazon (and have it tomorrow with Prime) and save an extra $100-200 i
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"I always wonder why the Apple store on Michigan Ave does so much business...You could order the same thing from amazon (and have it tomorrow with Prime) and save an extra $100-200 in taxes. "
The kind of people who would line up for 30 minutes in front of the Apple store and deal with crowds when they could just buy the same thing from a nearby Target with 10 of them in stock probably don't have the mental capacity to plan that far ahead and skip out on their instant gratification.
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Steam charges ~50% more for many games if you access from Ausralia, however:
1. They don't charge GST and hence don't quote it.
2. They don't employ any retail workers in Australia.
3. There are no additional costs to spread.
4. There is no shipping, it's a download.
5. There are no import duties paid.
6. There are no additional copyright or patent licensing fees. There would be fees for having the product rated but since there's no Australian presence that's not their problem.
What there really is is:
1. You charg
Same in Mexico... (Score:2)
A lot of electronics in Mexico are 20-50% more expensive compared to the USA. The Apple MBP is 500 USD more expensive, for example. And then there is the warranty bullshit. Yesterday I bought a SHDC memory card with, according to the packaging, 5 years of (limited) warranty. Upon opening one finds a small paper that "replaces all warranties" and gives only 90 days. I am not sure about the legality of this, and if it actually "replaces" the warranty. When I asked around a bit, Western Digital claimed that if
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Fry's Electronics advertises things like TVs or washing machines sometimes while omitting the brand and model. I've heard rumors from an employee friend there that these are most likely the Latin American market lines, and they're made to a lower spec. Same with some appliances sold at Walmart and Costco - a fridge may have a skinnier seal or a smaller motor or something like that.
Anybody have any anecdotal data on this alleged practice?
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Yes, I have heard of Fry's and Walmart carrying items that are below the standard specs for those items, but I have never heard of it being because of products meant for a different market.
It is usually the case that if Walmart advertises a name brand TV for much less than you can get elsewhere that it has less options than ones found elsewhere and therefor you can't do price matching since they are not the same item.
Sweden has similar issues (Score:5, Informative)
Here in Sweden it's not just a matter of pricing but also with delayed releases since manufacturers want to sell localized products.
What this means is that even if I'm fine with an English-language version of a product (or in many cases, Swedish-language version with a quickstart pamphlet in English) no one is selling the product because they hold off on introducing it to the Swedish market until the initial rush for the product in English-language markets is over.
Case in point, the Nexus 7 tablet. No company in the US will sell it directly to Swedish customers, Asus has announced they're going to start selling it in october(!) and the only way to get one right now is through some grey import channel (have it shipped via some address in the US/UK or from some small fly-by-night company that caters to early adopters).
It used to be that even software suffered from this, many older Swedish gamers will remember having to wait for months while games were translated to German, French and Spanish before being released to the Swedish market (with most Swedish gamers playing games with the language set to English with a handful using Swedish if its available).
I'm all in favor telling corporations they can have their precious "free" trade only if the same freedoms are given to everyone, no "We own the trademark so you can't import our product from a market we give a fuck about and sell it on a market we don't care about" crap, if you're selling it anywhere then anyone should be free to ship it to somewhere else and sell it there as well.
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I can understand the reasoning with media that would need to be translated in that if the majority of the market buys the english version then there will not be enough of a market to support a swedish version.
But it makes absolutely no sense for things that don't need translation.
Worse for uncommon items (Score:2)
Although there is an unjustifiable disparity for the common items they examined, it's even worse for specialist equipment.
E.g. I would like to purchase a large format printer to be able to print and sell my photographs. The price difference between the US and Australia is over 100% !
B and H - $1,575.00 [bhphotovideo.com]
computeronline.com.au - $3645.00 inc GST [computeronline.com.au]
camerapro.net.au - $3,156.00 [Includes GST] [camerapro.net.au]
Although Australia is a smaller market than the US, and so there are higher stock costs and lower turnover, having something c
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A little over a year ago, I worked briefly for a start-up here in Denver run by an Aussie. The model revolved around high-end/niche designer clothes made here in the US. A majority of these boutique shops had little to no overseas distribution, let alone distribution to AU.
The pricing structure did kind of blow me away. Since I was building their Magento site, I saw all the numbers. Take a blouse for example. The typical US price would be, let's say $200. They would then convert that price to $AU, add bit
Here in CH (Score:2)
Buying games in San Francisco vs Sydney (Score:2)
Dude in San Francisco buy 50$ game, with amazon shop credits, and pay 20$.
Dude in Sydney pay 150$ for the game.
Dude in Sydney get the exact same version, binary exact version.
Fuck regional pricing, fuck them in the ass!.
My own example ... (Score:4, Insightful)
An example that has been pissing me off for weeks. A Dell M4700, with a 2.6GHz i7-3720QM, 8Gb RAM, 500 Gb HDD, IPS 1920x1080 display, 3 yr warranty.
From www.dell.com.au: AUD$3600.
From www.dell.com: $1550.
Surely they can't be serious. That's 230% more for the same thing.
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so people in Australia make 2 to 3 times what people in the USA make?
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Minimum wage is $15.95/hour http://www.fairwork.gov.au/pay/national-minimum-wage/pages/default.aspx/ [fairwork.gov.au]
At the higher end they probably make less.
Re:Can't really blame corporations (Score:4, Insightful)
Companies set a suggested retail price in each market to maximize profit.
Yea, usually its not the companies fault that capitalism has failed to create a competitive marketplace, well unless they have taken steps to manipulate the market to reduce competition, like region coding, price fixing, cartels, mergers and buyout etc.
Its probably the governments fault for not regulating the market and making corporations understand they trade at the pleasure of countries in which they operate, they cant do whatever they like.
Well, unless the government doesnt even have any control over what buisness can and cant do in the country they are supposed to be governing, because of WTO rules, free trade agreements, international cartels etc.
So yea, dont blame the corporations.
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Densely populated areas are clustered most often far away from each other, meaning it costs more to get products to a dense consumer bases
Then why does it cost much less for a gray marketeer to send 1000 separate parcels via your postal service than a local retailer to send one pallet? If the cost were transportation dominated then gray market should be immensely more expensive due to the individual handling costs and packing inefficiency. Yet evidence is its the other way around.
I've noticed this when buying technical things from China on ebay. Why is it cheaper to buy a single endmill shipped individually in a hand addressed box airmaile
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I've noticed similar things when buying from DealExtreme. I can often buy things from them (which they ship free from Asia) and the total price is less than it would cost me to ship the same item to a neighboring state. How they manage to sell these things for less than anyone local *and* ship it from Asia...I have no idea.
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Not in my experience. The stuff I get from China on ebay arrive in a small packet via post which has clearly been sent direct from China. And the shipping is almost always _free_. A similar product purchased by mail from a US supplier is 3 to 5x the cost _AND_ the US
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One must also consider the price of not selling all 1000 widgets.
Mostly it's distribution channel lock (Score:5, Insightful)
The exchange rate is part of it but locked down distribution channels are the larger part.
A while ago, one US dollar was worth 1.7 Australian dollars. So something worth US$50 in a US store would be put on shelves here for AU$85. And then the exchange rate changed. One US dollar was worth one AU dollar. But things don't sell for their cost, they sell for as much as the seller can get and that's the pricing Australian consumers were used to. So that US$50 item would still be sold for AU$85 and someone would pocket the AU$35 difference.
The second part of this is distribution channel lockdown. Companies producing goods make deals with their US distributors to force those distributors to refuse to sell to Australian buyers. That leaves Australians and Australian retailers forced to buy from the designated Australian distributor at inflated prices.
What the grey market does is break that distribution lock. That's all. Some US citizen buys goods in the US from the US distribution channel, pays the US price, ships them over and sells them in Australia for far less than the authorised Australian distributor charges Australian retailers. If it wasn't for the locked down distribution, Australian retailers would skip the authorised Australian distributor and buy from a US distributor at US prices.
Another reason Australians are complaining is, with Internet sales, people nowdays can *see* the prices being charged elsewhere. 15 years ago, you'd have no idea what something sold for in another country. Now, we see Skyrim appear on Steam for US$50 for US gamers and US$90 for Australian gamers.
Yes, we get charged US dollars on Steam. 90 of them instead of 50, because the US Steam site sees I have an Australian IP address. And you have to send the packets much harder to make sure they get all the way across the ocean, you know? There's sites where you can order a game and they'll go to their local retailer, buy the game, open the box and then email you the Steam key. You can type it in your Steam client and download the game. Absolutely ridiculous.
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That's only a 78% increase, and as you mentioned there's the tax difference plus it's a physical product and the EU tends to have more expensive compliance rules for things like dealing with returns and handling disposal.
So here's one without all of that:
A 60% increase but it's a software download. There is no tax in either, there are no compliance rules for returns and disposals. There's no presence in the non-US country even - heck the foreign price is in USD so the buyer pays all the currency costs (the
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CSEs list online pricing. Most of the really cheap AU 'online' shops are really just fronts for Asian based warehouses. You order something from the 'Australian' site and it comes shipped in a package postmarked in Hong Kong. Or if nothing else, it'll come via a grey market channel that originated somewhere in Asia and is then reshipped to you locally from a local clearinghouse.
What's also annoying is that shipping on Ebay items from the USA is double the shipping cost of the same item mailed or couriered o