Markup
Posted on January 08, 2004 @ 10:30 in General
Say, you covet a certain product that is manufactured somewhere and sold worldwide. Simplifying matters somewhat, the price of such a product is determined by the cost of materials, manufacturing, shipping, plus a markup that is the manufacturer's profit. So why are we paying so much more for electronics that come from Asia here in Europe, compared to the US? Some examples:
The 40 GB iPod sells in the Dutch Apple Store for €548,99, while the American Apple Store lists a price of $499. Now, if €1 would be worth just as much as $1, it might be different taxes, or something like that. However, something that costs $499, should sell for €397, effectively a price markup of €150. To put it differently, €548,99 is $703. Would Americans cough up 700-plus dollars for a 40GB iPod? Few would I recon...
Another example: the Canon Ixus 400 (which I recently bought). Amazon lists it for $400, prices in Dutch stores range from €440 to €580. However, $400 would have to mean a price of €318; and conversely, €440 would have to mean a price of $564.
Apart from other issues such as different voltages and power plugs, Apple won't ship stuff from their American store to Europe and neither will Amazon ship electronics across the Atlantic. Sigh... it's not fair.
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so buy them from a smaller retailer. you can probably get them to ship it brown cardboard box style anywhere in the world.
Posted by jeremy hunsinger on January 08, 2004 @ 14:13
The US dollar is now at it weakest *ever* against the Euro, and has been dropping steadily for months. When manufacturer "recommended" prices for those items were set maybe six months ago, the Euro/US price difference would have been a lot less. (Also, the European Central Bank seems to thinks that the dollar slide might still continue for another six months: http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1073280851189&p=1012571727085)
It's a bummer that US companies make it difficult for us Europeans to take advantage of these favourable exchange rates. I'm sure they would do a lot of business if they did allow exports! But the reason they won't export certain items (they are usually happy enough to ship books) is because they have agreements in place with global companies like Apple and Canon. It's in Apple's best financial interests for Europeans to buy our iPods in Europe. And because Amazon wants to keep stocking iPods, it's in their best interests to keep Apple happy...hence the agreement not to ship overseas.
The trick is to cultivate your contacts in the US. Get Amazon to ship to them, and get them to send it on to you! :-) (My mother-in-law will be coming to visit us in March. If there is anything you really want, I can see if she'd be willing to bring it across the Atlantic, and then I could send it to you from here.)
Posted by Martin on January 08, 2004 @ 14:19
Sorry about the broken URL in my last comment...it shouldn't have a closing bracket at the end of it.
Posted by Martin on January 08, 2004 @ 14:21
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Comments and trackbacks have been closed on this site. My apologies.
Since MT-Blacklist inexplicably stopped working I had no other recourse than close comments and trackbacks to stop the spam. I've been meaning to correct this for quite a while, but life got in the way... in a good way I should add.