Cheaper to fly to USA and pick up laptop than buy in Australia?

aswitcher · Jan 16, 2004

I have been doing a bit of analysis of Australian prices versus US given the current exchange rate. Its apparent that when you look at the high end Powerbooks 15" super or 17", there is approximately (given 1 Aussie dollar buys 0.74 US cents) a ~$1287 or ~$1347 difference between buying in Australia or the USA.

My friend noted of this that current flight specials available should allow a return flight from Sydney to LA or San Francisco for "less" than the difference! He said he saw some sub $1000 offers only this week. I did a quick look around and pulled this off one website for example.
Name: Air New Zealand - Super Sale to Los Angeles... Mar-Jun!!
Price: From $1099 Return plus taxes

So the question begs, why is Apple Australia charging so much for powerbooks that it's actually viable to fly to the USA and get one, and possibly break even on the deal (or even save a few hundred)?

Sure this analysis is simplistic and I am sure hotels and urge to be a tourist would make such a trip more expensive but it seems pretty rediculous...

Jason

oingoboingo · Jan 16, 2004

Re: Cheaper to fly to USA and pick up laptop than buy in Australia?

Originally posted by aswitcher

So the question begs, why is Apple Australia charging so much for powerbooks that it's actually viable to fly to the USA and get one, and possibly break even on the deal (or even save a few hundred)?

Sure this analysis is simplistic and I am sure hotels and urge to be a tourist would make such a trip more expensive but it seems pretty rediculous...

Jason

Obviously Apple Australia flys staff members to Cupertino on an individual basis to collect orders when they are complete. Once you factor in a return business class airfare, a few days hotel accommodation and spending money, that accounts for the price disparity.

Speaking of strange pricing differences, Apple Australia is asking AU$79 for iLife '04, and given the US version is US$49, this actually seems somewhat reasonable compared to their hardware price gouging (this is separate from whether you think you should have to pay for iLife '04 at all...I'm talking about pricing parity). However, I took a look at Apple Centre Taylor Square's pricing today, and they want AU$139 for iLife '04! What's the deal there? It wasn't April 1st today last time I checked...

Nuc · Jan 16, 2004

Ship it.

I don't know if you can do this but....

If you know someone in the states, why don't you send them the money to buy the computer and then have them ship it to you.... I don't think that shipping would be to much.

Nuc

kiwi_the_iwik · Jan 16, 2004

Geez - I've been looking into that prospect also, as I'm living in the UK....

With the current exchange rate, and the poor performance of the Greenback, now's an IDEAL time to nip across the pond, and pick up a steal - er, I mean - a DEAL.

Currently, the rate sits around £1(Stirling) = $1.82(USD)

As far as you're concerned, Nuc - it looks like the $(AUD) is very stable; its inflation rate being in line with the Stirling. Therefore, you'd certainly reap the benefits, too!

And as far as the Americans go - well, my condolences!

jxyama · Jan 16, 2004

a few observations... some of the reasons your analysis indeed may be too simplistic...

- how are PBs priced in comparison to other laptops in oz? i'd bet they are relatively similar to the u.s. market. even if they are not, perhaps there's some evidence of differences in the customer base in oz.

- you'd have to pay taxes in most places in the u.s. the price online does not include that.

- you need to pay import duty in oz. (you may get away with not paying for your personal purchase, but apple as a corporation certainly has to obey the law.)

- apple needs to ship those PBs to oz.

that said, if you have a vacation plan in the u.s., you might as well wait until then to purchase...

a lot of japanese travel to the u.s. and purchase loads of cosmetic goods simply because they are about 30 to 40% cheaper in the states - for no apparent reason.

Icekey · Jan 16, 2004

Well here is the situation. Both Japan and Australia have similiar prices when it comes to the powerbooks. My family lives in Japan, and I have a brother in NY. In the end I've decided to get my bro to buy the powerbook for me and ship it over, and hopefully I won't get taxed. By doing this, I save around AU$900 if not taxed, and around AU$250 if they do, but that's if he puts down the true value of the brand new powerbook, which I'll instruct him not to. Taking a bit of a risk, but I think I can trust the transport of stuff from the US to over here.

All the calculations I have done includes sales tax (5% Japan, 8.75% US). The prices down here include GST (Goods and Services Tax). So really, what exactly is the reason behind the price in the US being so much cheaper?

Price of a 17" powerbook here on educational discount is roughly
AU$5000 (US$3750 when AU$1 = 75 cents)

Price in Japan
360,810 + 18040 (5% sales tax) = 378850 yen
(US$3507 when US$1 = 108 yen)

Then in the US
$2699 plus 8.75% NY sales tax = $2935

As you can see, that's a savings of almost US$600 in Japan, and freaking US$815 for us over here!!!!

And if you guys factor in the so called shipping, it should actually be cheaper. We don't get fedex. We get crappy old Star Track Express. Plus, Taiwan is closer to Japan and Australia then us so what's the deal here!!!

jxyama · Jan 16, 2004

market and economy.

if things are just generally more expensive in one place, then it just is... if 15" laptops are around $2000 in country A (but, say, $1500 in country B), there's no reason for any company to price their laptops at $1500 in A. if everyone else is selling at $2000, why take a hit? (of course, if they can sell so much more to make up for the $500, then they will sell at $1500.)

in japan, the distribution system within the country is such that a lot of things simply has to go through many more middlemen than in the u.s. that will add cost.

there are many reasons for the price disparity. it's not as simple as the exchange rate. exchange rate is simply the reflection of demand/supply of the particular currency - it's not a gauge to compensate for the market/economy structure differences.

on a small scale, people can take advantage of the apparent disparity and make/save money. importing foreign goods and selling them at other places on a personally suppliable level happens all the time. (ex. one guy i know would take a periodic trip to japan and buy a lot of anime stuff he can put into his luggage. then sell them at quite a markup in the states...) however, my guess is that when you try to do this at an enterprise level, it fails due to various reasons - import duties, distribution systems, tariffs, etc., etc.

maclamb · Jan 16, 2004

Well, Gasoline prices are 30 cents cheaper (at least) in New York City rthan San Francisco and I see no reason - there are ports and oil-gasoline plants not 25 miles from SF...

I think it is a case of charge what the market will bear - I mean - what are people living on an island going to do?

Kwyjibo · Jan 16, 2004

figure this too, if you end up at cupertino or any where in CA you probably can schedule yourself a nice vacation and a few good trips to different apple stores if you so desire.

Are you looking at a machine with stock parts ... if not that will make it a bit more complicated won't it ?

etoiles · Jan 16, 2004

Aren't there any Tour operators in Australia willing to exploit this ? Organize a charter flight to San Francisco, visit Cupertino, the Apple store in Palo Alto, come home with some GREAT souvenirs...all for US$999

Btw, the dollar is expected to drop another 20% by the end of the year. Thanks 500 billions deficit...

virividox · Jan 16, 2004

i experienced the same thing, cept not from australia. somehow i think if it comes out a little cheaper like 200-300 usd then make the trip but if its just 100 then i think its not enogh

Grimace · Jan 16, 2004

Have your brother buy it and ship it. If it's a gift or charitable donation - the taxes can be much lower, if any.

aswitcher · Jan 16, 2004

One fix up on those figures...17" PB diff is $1447 not $1347...

I think this is viable even though it sounds pretty crazed at first.

For example, Applecare is global, so no problems there.

All the other bits and pieces like software and accessories are all likely to be cheaper and hence more savings.

If, like many, you have frequent flyer points, but can't do a real holiday because of mortgage, kids etc, then this is a perfect way to put those points to work and save over a thousand aussie dollars. Oh, and all foreign purchases have their points doubled

You take the PB back in hand luggage and through the rest of stuff like papers etc in your suitcase which only has a change of clothes and toiletries in

Jason

Icekey · Jan 16, 2004

The funny thing about the prices here are that the iPods now reflect that price in the US. Apple is a very US centred organisation. Everything they do must come from the US, and all profits are measured in US dollars, and probably all revenues are transferred to the US. So you would wonder why they can't provide a more "equal" pricing that might reflect the transparent costs that are involved in the pricing over here. What I mean by transparent is that things like shipping, gst, duty are all known amounts.... well shipping can be taken out of the equation cause every country requires shipping anyway. With that in mind, i know that Apple Australia needs to take out some money for marketing so at that point, I really think that they could do a lot better with their pricing department.

aswitcher · Jan 16, 2004

Originally posted by Icekey
The funny thing about the prices here are that the iPods now reflect that price in the US. Apple is a very US centred organisation. Everything they do must come from the US, and all profits are measured in US dollars, and probably all revenues are transferred to the US. So you would wonder why they can't provide a more "equal" pricing that might reflect the transparent costs that are involved in the pricing over here. What I mean by transparent is that things like shipping, gst, duty are all known amounts.... well shipping can be taken out of the equation cause every country requires shipping anyway. With that in mind, i know that Apple Australia needs to take out some money for marketing so at that point, I really think that they could do a lot better with their pricing department.

On the iPods, the same analysis reflects, like you say, almost eactly US exchange rate plus 10% (Not 30-38% as desktops and laptops are)

15 Gig and 20 Gig 11% up on US.
40 Gig 18.5% (weird why this is more given weight etc is identical to the 20Gig?)

Given this Mini at ~12% will be $379 AUD.

Jason

mj_1903 · Jan 16, 2004

Of course, when you come through Australian immigration, you will have to pay import duties on the PowerBook.

Import duties for my PowerBook 15" were around ~$400 from memory, but of course that was still $1000 cheaper than buying it here.

I would advise you get a friend to buy it and ship it over. Shipping is around $70.

Icekey · Jan 16, 2004

Do you know of any ways of avoiding the duty and tax? Heard it's like a luck of the draw thing.

Finiksa · Jan 16, 2004

Originally posted by Icekey
Do you know of any ways of avoiding the duty and tax? Heard it's like a luck of the draw thing.

If you're bringing into the country personally make sure it looks used, not still in unopened packaging. You'll probably get away with it. Ditch the packaging or put it in someone else's suitcase and you'll almost certainly avoid customs.

If you ship via Australia Post the value has to be below AU$1000 to avoid customs. For a courier service the limit is AU$250.

aswitcher · Jan 16, 2004

Originally posted by mj_1903
Of course, when you come through Australian immigration, you will have to pay import duties on the PowerBook.

Import duties for my PowerBook 15" were around ~$400 from memory, but of course that was still $1000 cheaper than buying it here.

I would advise you get a friend to buy it and ship it over. Shipping is around $70.

I take it you coped GST at 10%?

You also would have avoid local atxes I guess?

I heard Apple USA won't ship here so I guess go toa reseller. Any advice?

Also was $70 including insurance for full value etc, airfrieght...

Jason

mj_1903 · Jan 16, 2004

Originally posted by Finiksa
If you're bringing into the country personally make sure it looks used, not still in unopened packaging. You'll probably get away with it. Ditch the packaging or put it in someone else's suitcase and you'll almost certainly avoid customs.

If you ship via Australia Post the value has to be below AU$1000 to avoid customs. For a courier service the limit is AU$250.

Good suggestion. This worked previously for a TiBook, I just didn't want to make a 15" Albook look grubby, because you have to make it grubby!

I take it you coped GST at 10%?

You also would have avoid local atxes I guess?

I heard Apple USA won't ship here so I guess go toa reseller. Any advice?

Also was $70 including insurance for full value etc, airfrieght...

The freight costs were from me sending it to a friend and yes it did include insurance costs (he sent it to me at a cost of $70). I assume the import duty is something related to GST, but I don't really know.

As said above, it is possible to bring something into the country without paying duties, just make sure you don't have the original box and that you pack it in your carry on luggage rather inconspicously (sp).

Mat

Cuckoo · Jan 17, 2004

Originally posted by Icekey
Well here is the situation. Both Japan and Australia have similiar prices when it comes to the powerbooks. My family lives in Japan, and I have a brother in NY. In the end I've decided to get my bro to buy the powerbook for me and ship it over, and hopefully I won't get taxed. By doing this, I save around AU$900 if not taxed, and around AU$250 if they do, but that's if he puts down the true value of the brand new powerbook, which I'll instruct him not to. Taking a bit of a risk, but I think I can trust the transport of stuff from the US to over here.

Maybe it's an idea to let your brother unpack the PB, and pack it again (so it's opened and not 'new') and have him send it to you as a gift. That way, if accepted by customs as a gift, you don't have to pay taxes. That's what i usually do.

Cuckoo

Icekey · Jan 17, 2004

Here is my plan

Bro goes to Apple Store Soho, gets me a 15" powerbook. Goes home, opens it, plays with it, maybe attach some bumper stickers, a bit of smudge with some oily fingers etc. I then ask him to write a note saying "Your laptop's been finally fixed, and you forgot your shirt", and thus with the shirt and powerbook he ships it through USPS. Now the tricky part is the insurance. Can I really trust it coming to me if he places a value of $0??? Is insurance seperate to the value? Like, can you purchase an insurance for the actual value (US$2500) but place a value of $0 on the actual box?

$usu$ki · Jan 17, 2004

Ignoring most of the thread (too little time):
It will be actually better for laptops to be priced cheaper, for maximum revenue, as demand for then is relatively price elastic, i.e. a small change in price causes a large change in demand (economists...) Therefore, if the price is cut, much more people will buy lets say 20% increase in demand for a 5% price cut, as most people will see it as a bargin. This is also true in the inverse, 20% decrease in demand for a 5% price increase, i.e. overall revenue decreased by a large amount.
Also, there is the income effect, but that is not that related with pricing, as price is thought to be constant.

maradong · Jan 17, 2004

Well i just did the maths as this was somewhat frustrating for me. ( the difference in price

)
well, i got to pay 4666 for the same 17'' pb for which i would have to pay 4099$. Note that the is about 1.25 $ at the moment... doing the math: 4666 for the machine, is like 5832.5$. Somewhat a difference, right ?
I really cant understand apple. I mean they definetly don't have to adjust prices as soon as the money exchange rates are fluctuating, but at least they could ask the same amount of as $.

and hey. no flame war please ;-)

aswitcher · Jan 17, 2004

USA sells 17" for 4099 - In Europe 4666 is $5832.5 US and $7881 Oz - OMG

Originally posted by maradong
Well i just did the maths as this was somewhat frustrating for me. ( the difference in price )
well, i got to pay 4666 for the same 17'' pb for which i would have to pay 4099$. Note that the is about 1.25 $ at the moment... doing the math: 4666 for the machine, is like 5832.5$. Somewhat a difference, right ?
I really cant understand apple. I mean they definetly don't have to adjust prices as soon as the money exchange rates are fluctuating, but at least they could ask the same amount of as $.

and hey. no flame war please ;-)

Wow the 17" here is 5499 AUD and you pay more than that in US dollars and works out at 7881 AUD - OMG. I would think a flight would make it easily cheaper as crazy as it sounds - even a flight to Australia!

Jason

Cheaper to fly to USA and pick up laptop than buy in Australia?

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