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.

[Anonymous Coward]

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.

[fuzzyfuzzyfungus]

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.

[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.

[green1]

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.

Re:Price fixing by camera makers push me there.

[dosius]

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.

[xaxa]

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.)

Re:Price fixing by camera makers push me there.

[vlm]

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...

Canadians are not as fat, so on a mg of "whatever" vs Kg of body weight basis Canadian pharm should all be like 10 mg per tablet anytime you'd see 30 mg per tablet in the USA.

That said, if your doc tells you to take 30 mg of "whatever" per day, you're OK taking three Canadian "daily doses" of 10 mg each because 3 * 10 = the same 30 even though its "three daily doses per day".

Where this starts getting weird is OTC. I would theorize, and /. should research, that perhaps a Canadian "aspirin" tablet would be about half the size of a USA tablet because Canadian women are about half the size of US women for example so on thus providing a constant mg/Kg ratio.. Ditto vitamin pills and supplements.

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.

Re:Price fixing by camera makers push me there.

[Nursie]

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.

Re:Price fixing by camera makers push me there.

[Frankie70]

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.

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.

Re:Price fixing by camera makers push me there.

[Razgorov Prikazka]

I was about to ask if it is about the high prices, or because of lower income/less purchase power.
But with this simple example you just made that redundant. Actually, if any moderator would score this 'redundant' I won't be mad.
Honestly, I won't ;-)

Re:Price fixing by camera makers push me there.

[petermgreen]

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.

Re:Price fixing by camera makers push me there.

[jquirke]

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.

[girlintraining]

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.

Re:Price fixing by camera makers push me there.

[fotoflojoe]

Isn't the major differentiating factor (in the US) that camera gear is grey market because it doesn't come with a US warranty, but a so-called "international warranty"? That is, if your grey market L lens breaks, you can't just bring it back to the shop where you bought it, or even send it to an authorized US warranty repair center. In order to get it fixed under warranty, you'd need to ship it back to the factory - presumably in Japan or Southeast Asia. This would be an example of a manufacturer's US warranty network not having to support a piece of equipment. That represents a cost savings of a specific USD amount that's reflected in the equipment's price.

Re:Price fixing by camera makers push me there.

[schlachter]

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.

Re:Price fixing by camera makers push me there.

[Vireo]

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 the price) in the US is also popular.

Re:Price fixing by camera makers push me there.

[xaxa]

http://www.boots.com/en/Boots-Value-Health-Ibuprofen-200mg-Tablets-16_44701/

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/

100mg dose available for babies and children ("strawberry" flavoured).

Re:Price fixing by camera makers push me there.

[RDW]

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!

Re:Price fixing by camera makers push me there.

[dsvick]

Of course their tablets are skinny, if their half the size then ..... errrr ... nevermind

Re:Price fixing by camera makers push me there.

[general_re]

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.

Re:Price fixing by camera makers push me there.

[fa2k]

It's not because of the shipping. Entertainment (bits) costs more than 2x the US price in Scandinavia, because they think people will pay more for it. Is it fair? Don't know... Imagine if they used the US price in China, people would have to take up a mortgage for a CD.

Re:Price fixing by camera makers push me there.

[tlhIngan]

Is there a reason that there 'almost has to be a markup'(beyond the costs of shipping)?

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.

[cdrguru]

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 there is no single agency that can block the import or sale of a drug and force the manufacturer into a price deal. A significant problem is the drug company figures all of the costing based on US sales only and the rest of the world is pure profit. End result is the US pays for R&D and testing and the rest of the world rides for free. Because it is perceived that "we can afford it" and other such nonsense.

This is likely to change in two years. Most companies will be dropping health insurance and pushing the employees onto the government plan. This is single-payer through the back door without anyone voting on it, approving it or even being aware that it is going to happen. Expensive? Sure, for a while. You can bet the first thing to get knocked down will be drug prices. Hospital care will be the 2nd item on the list. The health care providers - doctors, nurses, PAs, etc. - get knocked down because the government reimbursement rate is today about 30% of the billed cost. Of course that means a lot of doctors will simply fold up because they can't take the 70% revenue hit, just like today a lot of doctors do not take Medicare or Medicaid patients because of this. Well, when they are all government-plan patients there aren't going to be any others.

Rough road coming, but ready-or-not here comes single payer in the US.

Re:Price fixing by camera makers push me there.

[HungWeiLo]

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 Portland).

Also - Blu-Rays. I can buy sets (Toy Story, Bourne, Spiderman, etc.) for significantly less from Amazon UK even after paying for one-week international shipping.

Re:Price fixing by camera makers push me there.

[Miamicanes]

> 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.

Re:Price fixing by camera makers push me there.

[cayenne8]

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.

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 Japan to buy and ship to you...or can you order online from Japan and get them to ship to you...? Links?

Re:Price fixing by camera makers push me there.

[madhi19]

Pretty much what happened with the Canadian dollar who was at around 60 cent US more than a decade ago but has been at parity or a bit higher for a while now. We had to make some bloody noise to get retailers to adjust their prices because the bastards were perfectly fine with ignoring reality and cashing in the difference!

Re:Price fixing by camera makers push me there.

[Mister Whirly]

Considering minimum wage in Australia is near $18 an hour, and most workers earn a higher average than similar US or European workers, is it a big shock that things are more expensive in Australia? I mean a six pack of beer or a pack of cigarettes is like $16. When you make 2-3 times more than workers in other countries, I would expect prices on items to be about 2-3 higher as well. Also, Australia is an island. Go to Hawaii sometime and compare prices of things to mainland US. Things are more expensive because most things are imported.

Re:Price fixing by camera makers push me there.

[jbmartin6]

Why do you say "there almost has to be a markup" when the experience you relate proves that this is not the case? If you can get it 'gray market' for a quarter of what local sellers would charge, this proves there that the markup isn't necessary.

Re:Price fixing by camera makers push me there.

[travisco_nabisco]

So True! However we still pay a fair bit more for the same items here in Canada vs the US.

Re:Price fixing by camera makers push me there.

[filthpickle]

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/

Re:Price fixing by camera makers push me there.

[Endlisnis]

My fridge costs $2400 in Canada. I got it in the US for $1000. I had to rent a truck and drive down to the US to pick it up and pay tax at the board and it was still $1000 (41.7%) cheaper in the US. And you can't even claim warranty issues, because it is the exact same warranty (even valid in Canada).

Re:Price fixing by camera makers push me there.

[quacking duck]

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.

Re:Price fixing by camera makers push me there.

[ColdWetDog]

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....

Re:Price fixing by camera makers push me there.

[ColdWetDog]

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.

Re:Price fixing by camera makers push me there.

[pthisis]

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.

[Mister Whirly]

America can hardly be considered an "island" seeing all of the outside borders are not ocean, and you can walk/drive/train to another country from it.

Re:Price fixing by camera makers push me there.

[AssholeMcGee]

You make a point with those numbers ""(Population: about 7.5% that of the USA. Land area: about that of the 48 contiguous states)"" I would guess even tho this would seem far fetched, because of those differences companies are switching there pricing. In the US you have 100 out of 1000 people that buy a electronic, software or technology items, that obviously generates in more revenue in a short time, where in Aus, only 20 out of 1000 buy the same items, taking longer to make there projected revenues (bad example with the numbers to display what I am talking about) but you get the idea. Then again it more then likely companies are overcharge and taking advantage of AUS buyers based in part to there income, and the AUS government is allowing to occur..

Re:Price fixing by camera makers push me there.

[Frekja]

Surely there doesn't need to be a markup if you're buying your stuff from a much more geographically spread planet. If shipping costs + import duties are so low, it just sounds like price gouging.

Re:Price fixing by camera makers push me there.

[godel_56]

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 because people think they can get away with it.

These same people are now kicking and screaming because the internet destroys their easy scam.

Exactly, and it definitely doesn't explain why the SAME downloaded software should be more expensive for an Australian than for an American. In one case I got a 33% discount simply by selecting payment in US dollars instead of AUD, on the same web page.

BTW, for Aussies buying downloadable software from the US, a proxy is your friend. I use the free Hotspot Shield for my occasional forays, and disable it with Autoruns when I don't need it. It's not just electronics and software; a recent TV piece on IKEA showed some prices double the rest of the world, for items made in Indonesia just north of Australia.

Re:Price fixing by camera makers push me there.

[metrix007]

That hasn't been true for at least a decade

Re:Price fixing by camera makers push me there.

[metrix007]

No other continent is as small as Australia. Besides, it being a continent means nothing. New Zealand is also a continent.

Re:Price fixing by camera makers push me there.

[Master Moose]

As most of our distributers and many of our big chain stores are Australian, We have the same problem here over the ditch in New Zealand.

I buy almost all of my media (dvd, Blu ray and Video games) from the U.K for a fraction of the price it is availble for locally.

Re:Price fixing by camera makers push me there.

[metrix007]

I couldn't really tell Portland apart from Vancouver. The whole northwest is crazy misinformed hippies and/or students. Crazy protests, beliefs and good coffee. Oh, and homeopathy.

Re:Price fixing by camera makers push me there.

[cayenne8]

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.

Well, I'm guessing they would repair said dropped camera...but just not for free under a warranty.

Heck, I don't think either company is going to do a warranty repair on a dropped camera for that matter...grey market or not...

:)

Re:Price fixing by camera makers push me there.

[wed128]

This may be blasphemy, but I like post-2005 Doctor Who more then the pre-1996 series. Tennant was my favorite Doctor, with Baker as a close second. I'm sure I'm not alone.

Re:Price fixing by camera makers push me there.

[Rich0]

Well, it probably is 30% of the cost, but not 30% of what other insurers would pay.

The only people who pay full retail are those who are insured and how don't bother to ask for a deal. Those who ask for a deal probably pay 50% of cost and think they're getting a good deal. The insurance companies pay about 20% of retail (with the patient paying 2% of retail).

Pricing in healthcare is one big scam. Among other reforms one of the first things I'd do is require advertising of prices, and everybody pays the same.

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.)

Re:Price fixing by camera makers push me there.

[Solandri]

Currency exchange rates. Sony is a Japanese company and operates using JPY. If something costs them 10000 JPY to make and they have a 20% markup, they can't just look at today's exchange rate (USD$0.0126 per JPY) and set the price at 10000*1.2*0.0126 = $151.20. They have to ask themselves, "How much could the USD go down in the time it takes us to ship this inventory there, sell it, then convert it back to JPY?" Usually that's a timespan of 3 months to a year. So the USD price is set based on their worst-case projection for what'll happen to the USD-JPY exchange rate.

When you buy a grey market lens and have it shipped overseas, or you buy software from an overseas retailer and download it, you're only looking at the exchange rate on the single day of the sale. So there's considerably less uncertainty, and the worst case projection is nowhere near as bad.

Re:Price fixing by camera makers push me there.

[Solandri]

I'd just add that the distributors are not all evil. They're the ones who estimate how much of a product a region will need. They're the ones who pay to have that many of that product shipped to that region. If they overestimate demand, they're the ones who eat the extra cost of shipping stuff back. If they ship too few, they're the ones who have to pay for expedited shipping of stock from other regions to the region where it's sold out.

They relieve the manufacturer and local retailers from having to do this sort of market analysis, demand prediction, and cross-country distribution. The exceptions you mention (Amazon, Walmart) are large enough to do all this themselves. But a mom & pop retail shop or a small local manufacturer would be completely lost trying to do this sort of market analysis and distribution on their own. Yes distributors can and do gouge, but they also add legitimate value to the supply chain.

With Internet shopping and individual-level access to freight services (UPS, Fedex), this is slowly changing. But the distributor will always have an advantage because shipping a pallet of 1000 XBoxes cross-country to for local distribution is cheaper than shipping 1000 individual XBoxes cross-country to individual buyers.

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.

Do note that this isn't because North America is backwards when it comes to honest price advertising. It's because of the different tax structures. In Europe, taxes are mostly national. A nationwide retailer can advertise something for 700 Euros (including tax) and that's the price you'll pay out the door at any of their stores. In the U.S., the taxes are mostly local. Each state has their own sales tax, and many counties and cities add their own sales tax on top of it.

Staples cannot advertise something for $540 here (tax included) because my local Staples has to charge 7.75% sales tax, while the Staples 10 minutes away has to charge 8.5% sales tax. The only way to make it work is to advertise $500+tax. (Well, I suppose all Staples could charge everyone the 8.5% rate and the stores in a 7.75% tax zone could pocket the extra 0.75%. But I think I prefer seeing the ad for $500+tax and keeping the extra 0.75% for myself.)

Re:Price fixing by camera makers push me there.

[JazzLad]

How many continents are there again?

Re:Price fixing by camera makers push me there.

[davidfromoz]

Not to mention the Yodobashi camera store (more of a complex really) in Shinkjuko will blow your mind.

Re:Price fixing by camera makers push me there.

[arglebargle_xiv]

instead of just getting lenses, I could actually go to Japan, pick them up, and do some shooting/tourism without spending an additional cent.

Back in the 1980s, the markup on Apple Macs in the country I live in was so outrageous that the cheapest way to get one was to buy a return air ticket to the US and buy one over there. Even with the added cost of the air ticket it was still cheaper than buying one locally.

Re:Price fixing by camera makers push me there.

[Yoda222]

Which borders of America are not oceans (or any other water stuff) ?

Re:Price fixing by camera makers push me there.

[davidfromoz]

Shinjuku

Re:Price fixing by camera makers push me there.

[xSacha]

Probably sarcasm but no one ever dubs in to Australian.

And software that says 'en_AU' is actually just en_GB' renamed because any Australian specific words are unlikely to be used in software.

Re:Price fixing by camera makers push me there.

[Miamicanes]

Are you *sure* it was that low? I don't remember it *ever* being below 75 or 80 Canadian cents per US dollar in the 30 or so years I've been old enough to know or care.

Re:Price fixing by camera makers push me there.

[twright0]

And yet, I'd be willing to bet that if the ratio changed to make it worse, like AUD$1 == US$.25, they'd have jacked up the Australian prices to reflect that. It's greed, not sloth or ignorance.

Re:Price fixing by camera makers push me there.

[tsotha]

I've been asking that software question for years. Why in the world does it cost Aussies so much money to download a game? I can only think it's some kind of tax thing, but nobody seems to be able to give me a straight answer. I'm in the US, so it's academic to me, but still... what gives?

Re:Price fixing by camera makers push me there.

[tsotha]

The US is still the largest manufacturer in the world, depending on how you measure it.

Re:Price fixing by camera makers push me there.

[tsotha]

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.

How much of that is taxes, though?

Re:Price fixing by camera makers push me there.

[green1]

Tax on a car in Canada is 5% sales tax. and the prices listed don't include that. We're talking MSRP. the excuses given cover the gamut from "shipping costs" (which as I just pointed out make no sense whatsoever) to "redesigning the car for a smaller Canadian market" (how hard is it to put a speedometer with KM on the car? (I know there are technically other differences too, but not to the price they charge, and being that I can import a car from the USA, pay duty and the tax at the border (plus an air conditioning fee) make all the changes to bring the car up to Canadian standards myself, and still come out $10,000 or more cheaper tells me that it's just plain price gouging.)

Re:Price fixing by camera makers push me there.

[tsotha]

That's pretty bad.

Re:Price fixing by camera makers push me there.

[damiangerous]

Yes. In fact, exactly a decade ago the exchange rate was $1 CDN = $0.64 USD. The late 90's to early 00's were a great time for Americans to visit Canada.

Re:Price fixing by camera makers push me there.

[green1]

It gets worse. many vehicles that are almost identical in Canada and the US mysteriously appear as ineligible for import "impossible to comply to safety standards" or some have a requirement that only the dealership be allowed to upgrade it to Canadian standards (and then they refuse to do so)
And who makes these rules you ask? surely it's some government safety watchdog, right? nope, The manufacturers themselves get to decide which of their models can or can not be made to meet Canadian standards, And they get to decide exactly what needs to be done, and can even restrict who is allowed to do it.

Of course that's still better than trying to import a vehicle from the rest of the world, in which case the government doesn't even care about the safety standards, you simply can't import it unless it is at least 15 years old. There have been cases of vehicles sold originally at dealerships in Canada, being exported, and then being denied re-entry in to Canada because they aren't 15 years old yet. The auto industry in Canada has a very effective lobby.

Re:Price fixing by camera makers push me there.

[kingturkey]

They can and would do this, but all accounting for reporting is done on an accruals basis rather than a cash basis, which means they record everything whether it's been translated into an actual cash gain or loss yet or not. If they have to report their profit in JPY then they would convert the value of their foreign holdings for accounting purposes, that doesn't necessarily mean that they actually make the exchanges in cash.

Re:Price fixing by camera makers push me there.

[mathew42]

There is a simple fix for this - hedging the currency. It is standard practice in import / export businesses.

If you are not prepared to take the risk of the currency fluctuations, then it is simple to lock in the exchange rate for 12 months. Of course if the AU$ rises (as it is currently) then you've made the problem of grey imports worse ... but you don't run the risk of it falling and loosing money.

Re:Price fixing by camera makers push me there.

[thegarbz]

just doubling the nominal US price out of habit.

I have never heard such a load of crap.

There have been MANY news articles about "record Australian dollar" prices. There have been stories of doom and gloom for the entire Australian export economy. The struggling local tourism market and the struggling local manufacturing market are constantly in the news blamed on the Australian dollar. There have been MAJOR manufacturing plants closed including multiple refineries, and massive job cuts announced in the car manufacturing industry blamed on the Australian dollar. The effect on local farmers and industry has been actively debated in the parliament and in the opinion sections and talkback radio of media around the country.

There isn't a cave dwelling Neanderthal that could claim "doubling out of habit" as an excuse for the ludicrous prices of equipment here locally. It's simply an excuse for price gouging. The dollar crept up and because people didn't notice when it got to 70c they left it, then people didn't notice at 80c, then 90c, and now it's $1 we still bend down to get raped in the wallet while smiling and saying "Thanks have a nice day mate" on the way out the store.

Re:Price fixing by camera makers push me there.

[thegarbz]

I may have bought that as a reason if it weren't for the fact that prices here have remained steady despite the Australian dollar doubling in value over the last few years.

Re:Price fixing by camera makers push me there.

[Compaqt]

They charge an aircon fee? In some parts of Canada, I'd guess you can do without A/C.

Re:Price fixing by camera makers push me there.

[zoloto]

Yes it absolutely was. I remember traveling to Toronto from NY and spending about 2-3k on clothes, electronics and other goodies back in 99 and LOVED the difference my CC bill had.

Re:Price fixing by camera makers push me there.

[zoloto]

Not after using up all that petrol to get there and back :P

Re:Price fixing by camera makers push me there.

[Yvanhoe]

International companies lobby to bring down border restriction to international trade and then try to enforce their own. Having the cake, eating it and charging you premiums for it is not going to work for very long...

Re:Price fixing by camera makers push me there.

[lsatenstein]

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.

I was at a popular Electronic Retail Store. where 6 foot HDMI cables was listed at $40.00 I went to the local Dollarama (dollar store) and they had the 6 foot cables for $2.00. Batteries, lightbulbs etc. at big box stores are triple the price of the internet or local dollar stores (for the same product).

Technically, on a 6 foot length, with no real megahertz frequencies traversing the cable, there is perceptable difference in TV output or even my HDMI monitor output. The $40.00 cables had gold colored connector shells.

Re:Price fixing by camera makers push me there.

[Lumpy]

I got one for $1400 shipped.

And no I am not going to give you my friend email address, you find your own friend in Japan to do favors for you. I pay him back with free room and board when he comes here.

Re:Price fixing by camera makers push me there.

[metrix007]

It depends.

FUD all the way down

[Anonymous Coward]

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.

Re:FUD all the way down

[Zaelath]

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, then shop for the cheapest workers in Asia, and then whine that Australians can afford to pay more than Americans can toss my salad. Seriously.

Ah, the sweet smell of free trade...

[fuzzyfuzzyfungus]

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...

[girlintraining]

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...

[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.

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

[girlintraining]

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.

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

[mjr167]

That's how things were priced back prior to the 19th century.

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

[chrb]

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 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 ultimately lead to convergence on a single global price for everything. I think that would be interesting, but let's play devil's advocate - some publisher release a movie. Americans and Europeans are willing to pay perhaps $10 to download. Indians and Chinese are willing to pay perhaps $0.50 to download. But in a single, free market, there can be only one fixed price - so what should it be? If you price it closer to the Western price, then the product is inaccessible to Chinese and Indian people. But if you price it closer to the lower salaries, then your profit margins will be much lower, so you aren't going to do that. You can't please everyone when there is such huge wage disparity in the world. So, you conclude that the practical pricing model is the one that restricts distribution to only Westerners and wealthy people from elsewhere. So there is a counter-argument that dividing the world up and practising price discrimination actually helps the consumer, by enabling them to access the product they want at a price that they are able to pay. Now, I'm not saying that I agree with that point of view, but that's the counter-argument. Price discrimination is an important concept in business; having a range of similar items at varying price points allows your customer to pay a price point that they are comfortable with, rather than forcing them to choose between simply buying or not buying. See, for example, Starbucks coffee.

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

[fnj]

We pay 100% taxes on any imported goods, be it wine, shoes or Intel processors, except for books. If you think it's hard in Australia try to make it in Brazil.

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.

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

[poity]

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-leaning Slashdotter should be embracing this, since its result would essentially be "from each according to his wealth, to each according to his needs."

With regard to the story, we should be discussing the efficiency of the markets. Are US prices lower because of hidden subsidies, or are Australian prices higher because of hidden taxes? Do Americans enjoying lower prices because they have a larger population and market, which empowers US distributors to negotiate better wholesale prices from their Asian suppliers?

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

[poity]

do americans *enjoy

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

[cdrguru]

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 China. Germany has a space for the tax id of the recipient but it isn't required.

Basically, it is a hugely manpower intensive task but it also relies on the fear of prosecution if the exporter lies on the customs documents.

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

[macraig]

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.

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

[macraig]

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 Libertarian would like.

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

[Mashiki]

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 fair trade. Free trade as a whole, would make the world a better place.

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

[SillyHamster]

.. -- 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.

How do you separate the worth of something from the price someone is willing to pay for it?

Outside of coercion ("Would hate to see your house burn down if you don't buy at price X"), if you voluntary give $100 for a Widget, is the Widget not worth more than $100 to you? If the Widget is not worth $100 to you, and no one is forcing you to do anything, don't you simply not buy the widget for $100?

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

[godel_56]

With regard to the story, we should be discussing the efficiency of the markets. Are US prices lower because of hidden subsidies, or are Australian prices higher because of hidden taxes? Do Americans enjoying lower prices because they have a larger population and market, which empowers US distributors to negotiate better wholesale prices from their Asian suppliers?

With downloaded software there is no tax, and higher local prices are often just about screwing over the locals, because they can.

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

[mirix]

This is pretty common, here in Canada at least. On parcels over $30-40 or so, but it depends... about 3/4 of the time they will tax you. Not sure if it depends what day, or what agent you get, but some they don't bother taxing, or miss your parcel. This is usually based on the information based on the customs slip.
They also add a generous $5 'tax handling' fee... They are doing you a favour, collecting the tax, obviously. If duty is applicable they will apply it as well.

Occasionally they will open the parcels to determine if the information is falsified or not, or perhaps determine country of origin for duty purposes... something like this. Surely it takes a lot of manpower, which is why they charge the $5 fee.

On one occasion they held a package I had - some old tube radio parts someone gifted me, worthless old junk. Guy made the mistake of claiming $0 instead of say.. $5. So they held the package, and sent me a letter stating that this stuff obviously has value if someone is shipping it, and to tell them the true value.
I wrote a reply saying it's worthless old electronics; I couldn't see anyone paying more than $5 for it, etc. A week or two later the parcel showed up, and they decided it was worth a hundred bucks. Awesome. Thanks guys.

Now, if you get packages through the couriers it's even worse. UPS has the following rates for customs clearance (express is exempt, but they charge enough for that to make up for it generally).

Value fee
$20 $7
>$40 $20
>$100 $30
>$200 $45
(rate has reasonably lower increases after this)

Now, this is in addition to the actual tax and duty. So If I buy a $41 widget from the US, and spend say.. $10 to ship it UPS ground - I get hit with:

$41 (item) + $10 shipping + $20 (brokerage) + $4.10 (sales tax) + (duty if applicable - we'll assume this is a duty free item), for a grand total of $75. By the time you add in paypal dicking you on exchange rate, your $40 item from the US is now $80.

So - never send anything via courier to a Canadian unless you hate them, or (in the case of UPS at least) you pay for express, which waives the fees.

Sorry for the rant

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

[Compaqt]

>Why is income-based pricing a boogeyman now?

The reason, of course, is people are always ready to "soak the rich" when it's someone else getting wet. When the "rich" include them, then they suddenly think everyone should pay equally.

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

[lsatenstein]

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.

Are you proposing communism?

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

[Magius_AR]

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?

It's funny, I was making a similar argument to my wife awhile ago that women entering en masse into the workforce resulted in one of the biggest downgrades in societal comfort. My exact argument was that the housing market just absorbed the added second income as "the new norm". Whereas a family used to be able to own a house with someone full time at home, they now both have to work to afford the same house, and all the single people have been priced out of the market.

Can't really blame corporations

[longhunt]

Companies set a suggested retail price in each market to maximize profit. (It depends on thngs like elasticity, incomes, availability of substitutes, etc.). You can't blame them for trying to make money. If you really want to save money you can always find a better deal on something, from so called grey markets, etc. But there is nearly always a trade off in your time, or lack of warranty, or some other factor. It reminds me of when I used to buy "international editions" of textbooks from Singapore. They were much cheaper than the books in our college bookstore, but I had to spend time finding them online and sometimes the homework problems would be different and I'd get screwed. Everyone--retailers, wholesalers, and consumers--is just finding their own trade-off to try to maximize their own utility. Basic Economics.

Re:Can't really blame corporations

[alen]

so people in Australia make 2 to 3 times what people in the USA make?

Re:Can't really blame corporations

[longhunt]

It's not necessarily a linear relationship. Elasticities of demand are usually differential equations in the real world.

Re:Can't really blame corporations

[bug1]

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.

Re:Can't really blame corporations

[deimtee]

At the bottom end, probably so.
Minimum wage is $15.95/hour http://www.fairwork.gov.au/pay/national-minimum-wage/pages/default.aspx/
At the higher end they probably make less.

Re:Can't really blame corporations

[xSacha]

Yes but for every day goods that everyone is going to buy (electronics, books, etc), the minimum wage is what matters.
Even though USA has the highest average wage.

because of the extra staff needed

[Anonymous Coward]

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

[crazyjj]

Not to mention the fact that discs spin in the opposite direction down in Australia.

Re:because of the extra staff needed

[Jimbookis]

It's sort of true. I used to see boxes for high end CRTs, like the old SUN monitors, marked as Southern Hemisphere.

Re:because of the extra staff needed

[nukenerd]

In fact the barrels of firearms intended for the Southern hemisphere are rifled the opposite way. It is to do with compensating the Coriolis acceleration due to moving over a spinning globe.

The reason in the Boer War that the Boers seems so much better shots than the British, initially put down to the Boers being country folk brought up with hunting rifles while the Tommies were townies, was because the Boers had their rifles and artillery made for the Southern hemisphere, while the British guns were designed for a Northern hemisphere war, it being more likely for them.

Very true

[onyxruby]

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....

Re:Very true

[Pope]

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

[retroworks]

"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?

Re:1960s Terminology in Y2K Marketplace

[l0ungeb0y]

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, since the legality of those items is never in question and the terms "pre-owned", "refurbished" and "privately labelled" are all that is needed to convey the status and origin of the equipment.

So maybe no one uses the term as it was used in the '60s (if indeed it ever was commonly used) because it's use in that manner was way off since it brought to mind a comparison to the Black Market.

Re:1960s Terminology in Y2K Marketplace

[Relayman]

I can be more specific: Grey market goods are new, authentic goods bought through a distribution channel not approved by the manufacturer. Grey market goods do not have to cross borders; I can buy Cisco routers on the grey market in the U.S.

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".)

Re:1960s Terminology in Y2K Marketplace

[uglyduckling]

It's really simple: black market - illegal; "white" market (although no-one uses that phrase) - legal, and approved by the manufacturer; Grey Market - legal, not approved by the manufacturer. It's not a fabrication, and it's been a well-known term for many decades.

Re:1960s Terminology in Y2K Marketplace

[chrb]

In the video game world, the term "grey market" has been used to represent non-authorized international sales channels for at least two decades. And I'm pretty sure the term was used before that for VHS video tape imports.

Re:1960s Terminology in Y2K Marketplace

[HungWeiLo]

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.

Re:1960s Terminology in Y2K Marketplace

[gknoy]

(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.

Re:1960s Terminology in Y2K Marketplace

[cdrguru]

Well, no...

Grey market refers to any unauthorized distribution channel. This ranges from bypassing normal distribution channels to import a product to selling one off the back of a truck. Most manufacturers disclaim any warranty responsibility for grey market goods, meaning that if it is not purchased through a legitimate and authorized distribution channel they aren't going to take any responsibility for it.

Since grey market includes both legal and illegal distribution it gets pretty messy if you want to get into a warranty fight. Yes, the manufacturer probably does have some responsibility, but it may be up to the person making the claim to thoroughly prove the item was not stolen at some point. That can range from being hard to impossible.

I do not believe grey market has ever referred to used goods. If some group is trying to stretch it out that far, that is interesting and novel. And is probably stretching things a bit too far.

As far as rebadged items go - meaning the piece is the same as something else but simply being sold under different names - it happens all the time and you may find it is cheaper with a less prestigious name on it. Meaning something that says Realistic on it may be identical to something sold by Hammacher Schlemmer under a different name but the price at Radio Shack may be a lot less. I don't see how this relates to grey market distribution at all.

Re:1960s Terminology in Y2K Marketplace

[oldmac31310]

Did you mean Tolkien? I think it is fair to point out this error since you are discussing spelling!

Re:1960s Terminology in Y2K Marketplace

[retroworks]

Perhaps the corporate organization "Anti-Gray-Market-Alliance" confused me. http://www.agmaglobal.org/cms/ It is pretty clear how many things they are "anti". Also, the international translation of the term, especially in China, is extremely broad.

Re:1960s Terminology in Y2K Marketplace

[robsku]

Yes, and in Finland we have a chain of shops named "musta pörssi", which translates to "black market" - it's literal black market.

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:Its not just technology

[Razgorov Prikazka]

Pro-Tip!

1 - Contact a ship owner (that is a commercial entity)
2 - Have him make a 'contract' that makes you the contractor to do some work for him off-shore (US in this case) make him a nice deal :-)
3 - Mention your new status to the airline company and tell them that you need to carry around more KG of luggage on your return-flight (due to equipment and spare parts) and show them your contract with a stamp on it, as a maritime/off-shore contractor.
4 - Get an extra allowance for free! (depending on the airline company, KLM and SwissAir have that I believe)

Reason that they do this 'little extra' is because people in the maritime/off-shore sector fly a lot, so they will pay it back after all, and usually their equipment is slightly heavier than a laptop. Bitching about some KG more or less would make you lose that customer.

      - - - Disclaimer... I am out of the off-shore business for a couple of years now, but I think this might still be an option - - -

Logistics

[neurosine]

Three aspects of Australia that make everything more expensive: Thing 1: Densely populated areas are clustered most often far away from each other, meaning it costs more to get products to a dense consumer bases. Thing 2: We do not have a source of cheap labor in Australia. Trade workers will hardly roll out of bed for less than a grand a day. Thing 3: Large global interests take advantage of this real economic situation to create a false economy, reasoning that..."Hey, everything else is more expensive...we're just keeping up with traffic." Microsoft does this. A Volume license key costing 175.00 US will cost over 350.00 AU....for no reason other than tangible items are also more expensive and people expect to pay marginally more. These organizations are not helping our situation. Nevermind how you color the market. People will pay the least amount possible for any given product as long as the consumer surplus remains the same. speak wit yo wallet

Re:Logistics

[vlm]

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 airmailed from China than to buy it locally from a corp that imported a whole shipping container of them? The mind boggles.

Re:Logistics

[ottothecow]

I don't know either...

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.

Re:Logistics

[fnj]

Probably because the company doing the shipping of the 1000 separate parcels doesn't treat them as such (until the end). They are shipped much of the way with a much larger volume of goods. bringing the transport costs down to the pallet load.

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 supplier tacks on a criminally excessive shipping charge more than the cost of the item itself.

Re:Logistics

[Jeng]

One must also consider the price of not selling all 1000 widgets.

Re:Logistics

[NJRoadfan]

A similar situation exists here in the US. Just about everyone from China seems to ship items here cheaply or free. It would cost me more to mail it back then the original purchase price! If the item arrives broken, they usually just refund your money and tell you to keep it. I suspect China subsidizes parcel shipments overseas.

Re:Logistics

[vlm]

One must also consider the price of not selling all 1000 widgets.

Excellent point, I didn't think of those costs, also warehousing costs, property tax costs while it sits there... they probably negotiated net30 terms with the Chinese mfgr, maybe better, but if it takes more than a month to sell a whole pallet worth, they're in big trouble WRT the money they invested in inventory...

Hmm so now its cheaper to outsource both mfgr AND warehousing to China. That is an interesting concept.

So what's the downside?

[kaizendojo]

I can't get someone to step me through a bunch of useless processes, only to tell me that they can't help me and that whatever part I need isn't covered?

No way man!

[JustAnotherIdiot]

You mean when you artificially jack up prices, people will try to find a way around it?
I'm shocked.

Many factors involved

[markdj]

There a number of factors that lead to price differentials between countries.

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.

Re:Many factors involved

[whoever57]

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.

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).

Re:Many factors involved

[Relayman]

1. was discussed in the article. When you import, you still pay the GST. Not a factor.
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.

Re:Many factors involved

[timothy]

http://taxfoundation.org/article/sales-tax-rates-major-us-cities -- and with those other taxes in mind, it does hit 10pct in at least a few places. (Not sure how up to date this chart is, though.)

Re:Many factors involved

[ottothecow]

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 in taxes. You could even order it online from Apple (or drive to an Apple store across the county line) and only pay the 6.5% state tax which still saves you a decent amount on a $2000 MBP.

Re:Many factors involved

[markdj]

I guess you don't understand International Business 101.

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.

Each country charges different import duties (when they apply).

By international treaties, different countries can charge different copyright and patent fees.

All these and others factor into the costs companies must recoup in the price they charge.

There are other factors including warranty costs. Different countries have different minimum warranties a company is required to provide.

Now do the price differentials also have some gouge factor built in when the "expectation" is that prices in a particular country are expected to be higher than in the country of origin? Probably.

Re:Many factors involved

[HungWeiLo]

"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.

Re:Many factors involved

[nedlohs]

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 charge what the market will bear. Sure those Austrlaians whine and complain, but they keep on buying so why would you lower the price?

Re:Many factors involved

[Relayman]

The gouge factor covers everything. Just charge what you can get away with. They would do that in the U.S. except for the competition.

Re:Many factors involved

[GumphMaster]

When you import, you still pay the GST. Not a factor.

Strictly speaking GST and import duties are owed on all imports. However, when an individual imports an item the GST/duty is not collected unless the customs value of the item exceeds $1000 (or is alcohol/tobacco, http://customs.gov.au/site/page5549.asp). This limit makes the sure tax is not consumed by the costs of collecting the tax. The Customs and Tax departments do look for repeat deliveries and do get wise to commercial entities importing this way. Once you are on their radar you are taxed on everything and have more paperwork to do.

The oft-quoted assertion by "white" importers that their prices must be at least 10% higher to cover the GST is a convenient distortion. The total GST remitted on the item once sold by the importer is the 1/11 of the difference between the import value and the sale value (i.e. sale value/11 - import value/11). True, they cover the total import GST until the item is sold, but ultimately the GST is a levy on the value added by the transaction. If they do not sell the imported item on then they are the end user and pay the full import GST; most commercial importers do not consume their own imports though. I am fairly sure that import duties cannot be similarly offset, so these could be legitimate costs that are be passed on.

Re:global market

[fredprado]

Still prices for these lens are still cheaper in Japan, strong yen or not.

Same in Mexico...

[John Bokma]

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 I buy an external disk with 3 years of warranty I have 3 years of warranty, no matter what additional paper, added by the importer states. Moreover, warranty here often seems to be split in 3 parts: first period with the shop that sold the goods, next period with the importer, and finally one has to turn to the manufacturer. Sounds all nice, but when recently my 2 month old router kept losing its connection I wanted it replaced. The sales person and a manager did their utmost best to try to send me away and insisted that I contact Cisco so they could check the issue remotely, via the Internet. After 40 minutes I stated that I wanted a new router within 5 minutes or else the police would be called. And that did finally the trick.

On one hand I can understand the price difference; the market is smaller and stock sells very slow. If something has to be ordered it's not uncommon to have to pay 50% ahead, and no money back when it's not what one wants (one gets "electronic money" or a raincheck which has to be used within the same shop within a short amount of time). But on the other hand it is painful to have and to pay 50-60% more for a Nikon camera lens (for example) and have only 1 year of warranty (in the USA one gets 3+ years or so on the same lens).

And then there is the "made for Latin America" thing.... I really have the feeling that some electronics are made with way less quality compared to similar products in the USA just because the manufacturers can get away with it. And while there is a kind of consumer protection organization in Mexico (PROFECO) in my experience it's a bit of a hit and miss besides that it eats up a lot of time (most people here probably don't even bother).

Re:Same in Mexico...

[HungWeiLo]

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?

Re:Same in Mexico...

[Jeng]

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.

Mostly it's distribution channel lock

[Zuriel]

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.

Re:Mostly it's distribution channel lock

[lsatenstein]

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.

I may be naive, but does Austrailia have currency controls. I deal with Latin America, and one of the countries limits an individual transfer of money out of the country to $3500.00 after which there is a tax. Tourists and individuals are not impacted if they take less than that amount out of the country. Your grey market purchase would fall into the less-than "currency controlled" amount, if that is imposed.

Just one example

[jeti]

Here's an extreme example:
Samsung Galaxy Note 10.1 (16GB, Deep Grey)

Amazon US: $499.99

Amazon DE: EUR 716,77 ($890.87)
Note that the German price include VAT.

Re:Just one example

[nedlohs]

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 foreign currency transaction fee on the credit card in this case).

$79.95 if you happen to be in Australia*, $49.99 if you happen to be in the US.

* Or more accurately if you haven't got yourself a credit/debit card with a US billing address.

Sweden has similar issues

[mikael_j]

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.

Re:Sweden has similar issues

[Jeng]

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

[dackroyd]

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

computeronline.com.au - $3645.00 inc GST

camerapro.net.au - $3,156.00 [Includes GST]

Although Australia is a smaller market than the US, and so there are higher stock costs and lower turnover, having something cost more than twice as much here as it does in the US is just ridiculous.

Re:Worse for uncommon items

[pspahn]

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 of fluff to it, and then mark it back down to a price still much higher than the original US price but cheaper than the $AU price.

I'll also mention that the site had a .com.au address.

So this blouse would normally cost $200 US, be artificially marked up to $400 US, and then be marked at 40% OFF!!!! with a final price of $240 US.

I didn't stick around much longer after the site was launched, as I was offered a better (more secure) job. I'm not sure if they are doing well or not, but I would wager that my admin login to the backend of the store is still active.

Re:Worse for uncommon items

[CAIMLAS]

There's no need to justify these things, IMO.

My father is a 'grey market' buyer and dealer. He buys high-priced used specialized/professional equipment here in the US which is not available overseas at a significant markup. Some of it is 'discontinued' and no longer available new; some of it is simply not and has not been distributed in various countries.

I don't really see this kind of thing as being any different than hawking things on the corner or running a pawn shop. Nobody realistically thinks that $200 TV at the pawn shop is worth the money, but people buy them anyway.

Here in CH

[SpaghettiPattern]

Here in CH we have a similar or perhaps even worse situation. Anything we buy comes at a premium price for no apparent reason. Sure, we get the best products available -as most developed countries do- but service can be quite rough. As procedures are in place and mostly high end products are sold, there are very few defects and/or dissatisfied customers. When something breaks then the CH business are either inexperienced in dealing with such cases or only see their side of the coin and complain about loosing money. No kidding.

I accept 10 to 15% higher prices for luxury goods in CH. Anything above that triggers an order in DE, UK or US with me or a visit to DE.

The Swiss then tend to wine about Swiss business lost. Sure, the boys from the import cartels that mainly scratch their bottoms and push boxes will not get my money that easily.

Get an ABN, buy from distributors

[YankDownUnder]

...is that hard? Nah. Not hard at all. Been doing it for years. On top of that, show up at a Sydney computer wholesaler (like at Capitol), tell 'em you're buying via ABN, and voila: you've got cheap. Is that hard?

Paid for by taxes

[CodeInspired]

The conservative argument against universal health care is pretty simple. If it's paid for by taxes, the middle to upper class pay significantly more than everyone else for the same service. And those people don't like doing that.

Personally, i'm on the fence about the issue. I definitely see the benefits of a simple, efficient, single payer system. And I also feel it's important that everyone has access to affordable health care. However, I do find it annoying that a huge percentage of the population pays little to no taxes but expect more and more free services from the government. I think health care is a personal responsibility that everyone needs to budget for. Similar to buying groceries or paying rent (extreme poverty cases aside), everyone has to pay. I see far too many poor people buying iPhones and $100 data plans, yet claim they cannot afford health insurance.

Re:Paid for by taxes

[CodeInspired]

crap.. logged in to post and posted to wrong article.

Re:Paid for by taxes

[cdrguru]

Single payer would be great, if there was actually a vote on this and it was implemented if it passed.

The problem for the US right now is a minority wants single payer right now whereas the majority isn't so sure. Especially considering the costs. And plenty of people are worried when the government is trying to cut costs in a big way what that might mean for a single payer plan - Canada tried that a while back in the 1980s I think and it was a disaster.

What we have lined up is all employer health care pretty much ends 1 Jan 2014 - the only approved plans will be dictated in Washington and they will just have to include the kitchen sink - acupuncture, homeopathy, chanting care, etc. So costs will be very, very high for everyone except the government. So what every business that I have had contact is planning is to pull the plug in 2014 and just pay the fine. It is a very, very small fine compared to the costs of insurance even today.

Well then, we will have single payer then, now won't we? Except who voted for this? Who explained what the costs would be. Not today with employers picking up a good part of the tab but in 2015 when it is all on the government? Nobody voted for this, nobody knows what the costs are going to be other than very, very high. And we will likely be in that government cost cutting mode. Not a good combination for starting a single payer system, now is it?

Not only that, but today the government is paying Medicaid and Medicare charges at about 30% of what is billed. This is why it can be a challange to find a doctor that will take a new Medicaid patient. What do you think will happen when everyone is a Medicaid patient in terms of what fees the doctors and hospitals get paid? No more cost shifting from the Medicare patients over to the privately insured.

Re:Paid for by taxes

[CodeInspired]

Thanks for the reply. I actually posted this by mistake in the wrong article. There was another story on /. about Mexico an its health care policy that I was intending to post to.

I'm not exactly sure what your position is on universal health care, but I do appreciate your perspective on how such things get implemented and the corrsponding consequences. You're most interesting point was "Except, who voted for this?". I hadn't thought of that really. But it does kind of lead me to my original point. Say it was put to a vote and it passed. Then the question becomes, "passed by who?". It's really easy for an enormous chunk of the population to vote in a nationwide benefit when it has little to no financial impact on them. If the only result is that it benefits you without consequence, why wouldn't you vote for it? Why not vote for free food and lodging for everyone, but at the expense of the middle to upper class?

Books

[DarthVain]

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, distrabution centers, maybe but still I don't see it.

Re:Books

[green1]

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 (like food), I buy online. I can buy small electronics from hong kong with shipping for cheaper than it would cost me to mail them accross town and significantly cheaper than any store. I bought my latest bike accessories from isreal, with shipping still half the price of the local stores, I bought my last car from Japan, headache due to protectionist import rules, but a better vehicle than you can find around here and for much much cheaper.

I hear people screaming "buy local" but I refuse to pay double just because the store is local. My paycheque has to compete on the world stage, so do the people selling the products I want to buy. Of course there's a lot of pressure to make "free trade" agreements that prevent individuals from buying out of their own country, while still making sure corporations can source anything they want, anywhere they want.

Re:Books

[DarthVain]

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 it". I will subvert that in anyway I can, and hopefully they will change their practices. However all you have to do is look at certain industries, like Books, Software, Music, Movies, etc... and they all assoications, and groups, that decide this stuff (and individual corporations should they have enough market share), along with the lobby they create to influance governments to make it illegal to circiumvent their commercial pollicies.

Anyway it is a larger fight between corporate intrerests VS the interests of the individual and isn't going anywhere fast.

There was an interesting example of this story on here awhile back about a group that was essientially smuggling cheaper cancer drugs. On one side they are providing a service for individuals who cannot possibly afford the crazy prices some of these drugs fetch, and while illegal were potentially saving lives. However argued against that of course is the company that say it needs those profits for R&D to create the drugs in the first place and if you get rid of those profits many less drugs will be created... Same story really about software, movies, music, etc...

The bottom line is companies will charge "what the market will support". So, Canada gets a certain price, Au a different one, UK a different one, USA a different one, Thailand a different one, China a different one, etc... Hence all the crazy international trade deals that basically say you do as we say or else. They come up with technological fixes in the past, but we are reaching these stage that normal individuals can bypass them without much difficulty, Region setting for DVD's for example. Now they have go the next step to basically say, OK that didn't work, now we will just make it illegal for you to do so and use your own governments to enforce our rules for us. Canada just passed into law the whole Digital Locks BS this year.

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...

Re:Books

[green1]

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.

Re:Books

[green1]

One spelling mistake in the post (accidentally adding a second "c" to across.) Hardly an example of the worst spelling on Slashdot. (I suppose I also missed capitalizing the first letter of a few country names, but that's not technically "spelling.")

Re:Books

[tsotha]

For physical things turnover matters a lot. A distributor with access to a larger market will always be able to sell goods more cheaply because the ratio of sales to the money he has tied up in inventory is smaller. I used to work for a logistics company, and for our customers this was the key to making money - in their dream world at the beginning of every day the warehouse is packed to capacity and completely bare by the time the last truck rolls.

This matters the most for things that are expensive and have a relatively short shelf life. Like, say, electronics.

Not always so expensive in AU

[suprem1ty]

While the big name retail stores in Australia are nearly always really expensive, when you shop around a bit you can normally find pretty cheap places. My local computer store for example got $2333AU all up for the software category on the article, where their US shop got $2120 and their AU shop got $3183 - and thats with me including the price of Project 2010 standard from Microsoft's AU site rather than my shop, because they only provided 2010 Pro there. So while it's definately more expensive when you go to retail stores and the like, you can nearly always find good prices shopping around a bit.

Re:Not always so expensive in AU

[suprem1ty]

Mind you in saying that the only sites I've found which sell cheap games in Australia import from the UK or US.

Adult vs child's doses

[Zinho]

I looked at the dosage chart on my children's ibuprofen syrup recently and found that the recommended dose for a 12-yr-old 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 each dose rather than paying for the 800mg tablets. I'm also curious why the dosage-by-weight tables seem to assume that everyone over 100lbs needs the same dose. I doubt that my 100lb daughter, my 150lb wife, and my 300lb neighbor would get the same benefit from 400mg...

Re:Adult vs child's doses

[ColdWetDog]

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.

Re:Adult vs child's doses

[robsku]

In Finland the prescription 600 & 800mg pills are cheaper than 200 or 400mg OTC pills...

Buying games in San Francisco vs Sydney

[Tei]

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!.

Good Game's Feature Story: IT Pricing in Australia

[antdude]

http://www.abc.net.au/tv/goodgame/episodes/date_2012_Tuesday21August2012.htm (today's episode) on gaming.

Oh, for the love of History and Economics

[daemonenwind]

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 failure.

Re:Oh, for the love of History and Economics

[macraig]

I can guess which statement you believed you refuted, even though you were playing coy and didn't say, but you didn't refute it.

I'd also like to know what you think constitutes "work" in this context of getting unethical people to behave ethically. The tip of a sword at Black Hat's carotid?

If you do this from Europe ...

[Lazy Jones]

.. you will run into problems with customs because they consider original equipment e.g. from Nikon Japan a "grey import" and trademark violation and confiscate it and fine you. Trademarks for Asia/Japan are often held by a different company than the same trademark for Europe. This may not necessarily hold up in court (esp. ECJ), but that doesn't stop customs from fucking people over and fining them.

I don't think they used CSEs

[Lazy Jones]

(comparison shopping engines) I've looked at a few products now and they seem generally much cheaper in Australia than in the EU, so the article is probably just based on sloppy research.

Re:I don't think they used CSEs

[pipedwho]

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 out of the UK. And the distance to the UK is further than the USA. In the last few years, the cost of shipping from the USA to Australia has grown by a factor of 2 to 3.

VMware are also overcharging Australians

[slincolne]

I bought a copy of VMware Workstation last year via their online store.

On their site you could choose what currenty to pay in - the conversion to Australian $ added around 40% to the price. What stung was at the time the Australian dollar was stronger than the US$, so in theory the price should have dropped.

I actually phoned up and queried why - the lady at the other end told me that it was due to the exchange rates when they set the price and not the rate at that point in time. However that would only have been the case if they had set the price several years previously.

Now they have fixed the problem by not letting you chose the currency - they force you to pay their inflated Australian prices, even though all you are buying is a license key.

It sure makes those US hosted proxy services look attractive.

Re:VMware are also overcharging Australians

[mathew42]

I did this exactly last week. I needed a Network Edition license for Zimbra. US$399, Australian price $475. VmWare tried to prevent orders direct through the US site, but I used a proxy service. Having a friend in the US to provide a freight forwarding service is useful, otherwise there are freight forwarding companies that will do it for you.

My own example ...

[ras]

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.

Re:My own example ...

[lpq]

That's when you buy from the US and deliver in Australia.

They can make a case for charging more on shipping, but for the
actual unit? Does Australia slap high import taxes on imported goods?

I.e. maybe at the port, the AUS govn says, you want to deliver that, it will be $1000 and you have to pay --- not the customer -- so what do sellers do? They raise the prices in advance.

Re:My own example ...

[ras]

Australia has no tariffs on most things. The only tax is a 10% GST. They are built in Malaysia, and shipped complete from there.

Re:My own example ...

[lpq]

Thanks.

Seems like corporate rape approaching discrimination based on
national origin. Does Australia's constitution have protections against such? If it does, that might be used to lock out discriminatory price offers while still allowing direct, from-overseas, shipment.

Has Australia been conquered recently that corporations think it's ok to pillage it? ;-/

Import it yourself.

[anubi]

Following is a link to a major Chinese internet shopping mall run very similar to Amazon in America. I have been buying all sorts of electronic goodies here. Caveat: there is usually NO documentation shipped with the product. Be able to determine from the vendors web page if this is the item you want before you buy. Do not expect any technical support. Once in a while I do get a disappointment, so buy a sample or two first.

Import it yourself!

If you make lots of prototypes, as I do, you will find all sorts of subassemblies of other stuff here you can adapt to what you want. At a fraction of industrial catalog price. Arduino lovers take note.

Fer cryin' out loud, don't pay a big markup to someone else to visit this site for you.

Windows Anytime upgrade

[spud1955]

US $70 AU $210 for an email with 20 characters in it

Re:How much is from taxes, though?

[Zaelath]

For anything under $1000 shipped internationally? 0%

All this bullshit above about taxes and local this and bricks and mortar that are just that; bullshit.

You can fly from Australia to the US, walk into a retail outlet in the US and buy Visual Studio, fly back to Australia, and it's still cheaper than downloading it online.

Even things that are physical objects, you can often have a single item boxed and shipped by *air* direct to your door, cheaper than you can buy it from the official channel.

Those that are making the "Australians make more money" argument are the only valid argument, however they can still get stuffed. I grey market everything I can and only buy things from the channel where the warranty is a concern, and there's precious little of that when you look at how good most warranties actually are.

No such thing

[Gonoff]

We should all refuse to recognise the concept ot the "Grey Market".

We should just ask the following questions...

Did you buy it or steal it?
Was it legally bought all through the supply chain or was it stolen?
Has it been misused or damaged?
If it is away from where you bought it, did you know that you have to pay shipping for warranty actions?

If it has been stolen, this is a police matter. Otherwise, it is legal. This is black and white...

How can anyone be confused as to the reason

[wolja]

The multinationals have artificially increased the price of goods coming to Australia for years by;

      1. Enforcing rights management and getting monopolies which allow them to overcharge.
      2. Lately DRM has been a sledgehammer to try and maintain this cosy overcharge. Any attempts at parallel imports are fought tooth and nail with the same fallacious arguments as the drug companies & cigarette companies use. No warranty, no standards,
      3. Governments don't care. Almost guarantee this inquiry will get no-where.
      4. Local retailers add to the issue by taking the overpriced imports from wholesalers / manufacturers and adding an overly large markup especially in on line retailing, the 10% GST is a minor component but they try and justify the same price as at bricks & mortar stores by claiming GST cost. Blaming the customer is easier than fighting the monopolies.

How Amazon can ship a book from the US to Australia , single unit not bulk so shipping cost higher , and sell it for half the cheapest on line book sourced here and 70% cheaper than the cheapest bookstore is beyond me. Likewise electronics etc.

Yes economies of scale make it cheaper to make & sell in the US etc but not that much. Most local manufacturing of these items have been outsourced to China years ago so the economy of scale isn't as significant as they claim.

Basically until the US government realise the real pirates are the multinational companies clamoring for DRM nothing will change. That won't happen in my lifetime.