Prices Drive Australians To Grey Market For Hardware and Software

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.

Comments

Price fixing by camera makers push me there.

[Lumpy]

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.

[Lumpy]

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.

Re:Price fixing by camera makers push me there.

[Anonymous Coward]

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 speculate that we would not import from abroad pencil sharpners and post-it notes because the hassle is not worth it given the absolute amount saved.

Re:Price fixing by camera makers push me there.

[ozmanjusri]

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.

[Solandri]

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'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.)

Its not just technology

[OzPeter]

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.

Re:Ah, the sweet smell of free trade...

[vlm]

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.