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Old Jul 14, 2012, 03:42 AM   #1
ComputersaysNo
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Price difference Euro's / Dollars

(This is not a thread about how Europeans get hosed about the pricedifference in general, i accept & understand that )

I am in the market for my first Mac, a mini. So out of curiosity i started comparing USA-prices with the Dutch'.

Why is there a difference in percentages between products, and isn't the percentage-difference across all products the same?

- I added an average salestax of 8% for the US-prices
- I converted Dollars to Euro's with 1.25 dollars per euro
- Dutch prices already include salestax (approx. 20%)
So: (USA-price + 8%) / 1.25 = euro

The only reason i could think of is that the people who would handle the products get payed differently in different countries? As for example, some products might be manufactured in Thailand, and others in Brazil? Or... some products are in different warehouses across the globe, the products being closer are cheaper than the ones the furthest away from me?

Edit* It also might be possible that portable musicplayers have an additional european tax for compensating those manufacturers/artists who are affected by piracy/copying. But i am not sure of this.
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Last edited by ComputersaysNo; Jul 14, 2012 at 03:48 AM.
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Old Jul 14, 2012, 08:28 AM   #2
Umbongo
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Because the prices aren't solely determined by the exchange rate. As there is no rate to price them on they set pricing neatly (49, 99) and for what they think the market will pay.
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Old Jul 14, 2012, 10:13 AM   #3
benwiggy
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There may be other taxes, like import duties. Shipping rates may also be different.

Most importantly, a company that operates globally like Apple will want to make sure that its prices don't fluctuate with the currency market. (Today an iMac is €1000, tomorrow €1500!!) Or that it doesn't lose money if the rate changes and the price is the same.

So they will trade currency Futures, buying currency which they will sell at an agreed price in the future.
Such deals are not without risk and cost, and that is factored into the retail price.

In short: there is a cost involved in providing stability to retail prices in another currency.
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Old Jul 14, 2012, 10:35 AM   #4
brentsg
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If your tax rate is 20% then there's an additional sum right there, that has nothing to do with Apple.

For comparison purposes you should compare both tax free.
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Old Jul 14, 2012, 10:46 AM   #5
Macky-Mac
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Quote:
Originally Posted by benwiggy View Post
There may be other taxes, like import duties. Shipping rates may also be different.....
and....pay scales & employee benefits, corporate business & income taxes, government regulations about warranties, the cost of complying with varying local & national business regulations......quite a number of things will make doing business in one local more or less expensive than in another
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Old Jul 14, 2012, 11:38 AM   #6
gnasher729
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Every three months we have discussions here about the differences in warranties between EU and USA, with better consumer protection in the EU. Someone has to pay for that.

And it seems daft to add sales tax and ask "why the price difference" when you know that the sales tax is 8% (average) in the USA, 20% (average) in EU countries; so the sales tax would be the biggest factor in price difference. Take US prices as advertised (without sales tax), remove the sales tax from EU prices, before you start comparing.
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Old Jul 14, 2012, 05:33 PM   #7
Dwee8le
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Quote:
Originally Posted by brentsg View Post
For comparison purposes you should compare both tax free.
They are right you know:

MBP 13" (2012 base model) without tax:
USA = $1199
Holland = $1285
(1249 minus 19% Dutch VAT = 1049, which is in todays exchange rate almost $1285)

So that little bit extra is just, like others have said: shipping, import taxes and some extra to smooth out difference in currencies.

I am not happy about it either, but that's the way it is... Imagine what it will be like when are government changes the VAT to 21% coming October
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Old Jul 14, 2012, 06:07 PM   #8
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Plus prices are set to what the market will bear. If Europeans have accepted paying more for American technology (hypothetically) then the price will be raised accordingly. International pricing is not priced at all on an currency exchange formula.... it's simply what Apple believes people will be willing to pay in that market, based on what they are used to paying on similar items.
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Old Feb 11, 2013, 03:25 AM   #9
ComputersaysNo
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Official questions about the pricedifference between countries are raised:
http://assets.sbnation.com/assets/21...ia_summons.pdf
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Old Feb 11, 2013, 04:34 AM   #10
gnasher729
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Quote:
Originally Posted by ComputersaysNo View Post
Official questions about the pricedifference between countries are raised:
http://assets.sbnation.com/assets/21...ia_summons.pdf
What are the bets that some Australian member of parliament is intelligent enough to figure out that US prices don't include sales tax? And what are the bets that they figure out that most of the prices they are complaining about (iTunes store) are not actually Apple products?


Quote:
Originally Posted by Dwee8le View Post
So that little bit extra is just, like others have said: shipping, import taxes and some extra to smooth out difference in currencies.
And some extra to pay for better consumer protection in Europe. That's probably the biggest part.

Last edited by gnasher729; Feb 11, 2013 at 04:41 AM.
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Old Feb 11, 2013, 05:38 AM   #11
Trinite
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Just be glad you don't live in Hungary. Here VAT is 27%
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