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.
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.
Do not look at laser with remaining good eye.
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.
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!
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.
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....
"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?
Gently reply
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.
I am Slashdot. Are you Slashdot as well?
You mean when you artificially jack up prices, people will try to find a way around it?
I'm shocked.
What do I know, I'm just an idiot, right?
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.
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.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
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.
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.
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.
Greylisting is to SMTP as NAT is to IPv4
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.
I'm guessing that wasn't on their radar screen...
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.
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...
"Space Exploration is not endless circles in low earth orbit." -Buzz Aldrin
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.
.. 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 love my job, but I hate talking to people like you" (Freddie Mercury)
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.
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.
US $70 AU $210 for an email with 20 characters in it