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-   -   WHY do Macs cost far less to buy in the USA ? (http://www.mac-forums.com/forums/apple-desktops/237687-why-do-macs-cost-far-less-buy-usa.html)

pedropete 05-08-2011 01:47 AM

WHY do Macs cost far less to buy in the USA ?
 
OK - starting a new thread here, as suggested (!)...
As I'm a relatively Newbie here, I don't know the frequency of such a discussion hitherto, but I have picked up in various posts the underlying assumption that 'Macs are expensive Stateside'..
OK - we are all aware that Macs have a certain cache and desirability which may or may not be connected to the pricing structure - but to those I know, the attitude is either - 'Bloody Apples - over-priced but nice !' - or - 'Macs - the Rolls Royce of Computers !'. Some have even cited the earlier advertising thrust for Stella Artois, a popular,strong European lager made in Belgium - Stella Artois, whose slogan is-still-I think - " Reassuringly Expensive'...
What concerns me on a personal level is that here in Europe, we have ALWAYS had to pay a significant Premium for most electronic goods - compared to the U.S.A.

WHY is that ?

I cite the recently launched iMac 27" - the i5 model - which is currently priced at Amazon.com at $1,697.00.

The SAME machine on Amazon.co.uk is priced at GBP 1,649.00 !

Factor in the current $ to GBP Exchange rate of 1.64 - and I don't need to tell you the math !?

I actually tried to order this Mac from Amazon.com - BUT I received a message when I proceeded to CheckOut - 'This item cannot be delivered to the address you selected'. I even changed the delivery address to my ex-wife and children's in the UK, to see if this made any difference - but it didn't. IF they had shipped to England - it would STILL have been cheaper for me to ask my ex-wife to re-send the large box by international carrier to me out here in Spain !
A few minutes ago, I tried to buy a new Mac Book Pro - priced similarly to the iMacs - with the identical result !
BUT - Amazon will deliver a new white unlocked iPhone 4 !

I DON'T UNDERSTAND !
I thought we lived in a 'Free Trade World' naively...?

So - when I hear you Americans, bleating on here about 'Macs are so expensive' etc
Spare a thought for your European brothers - please !?

Will be interested to hear what discussions this thread generates.....:Smirk:

baggss 05-08-2011 01:57 AM

Does the UK price listed above include VAT? If so deduct the VAT % and see what you get.

As far as ordering, I think you might have to shop from whatever the Spanish or EU version of Amazon would be, not the .UK site. I suspect this has to due with VAT for the rest of Europe too.

Kevriano 05-08-2011 02:13 AM

Yes those prices include VAT at 20%. That's one reason for the difference BTW, our high VAT rate.
If you could import from the US (which a lot of companies - Apple, Roland for example) don't allow, you would still have to pay import duty (7% I think) and then VAT on top, so the difference would not be so large.
Welcome to the UK!

pedropete 05-08-2011 02:16 AM

Yes - it includes the VAT - which as you may know, increased in the UK from 17.5% to 20% in January !
There is NO 'Amazon.es' - but the Apple Online Store in Spain has the identical model priced at 1,649.00 Euros - and the current Euro to GBP exchange rate is 1.13...
I am pleased to reveal that I was able to negotiate a considerable discount on the above new iMac 27" i5 2.7GHz model, since I bought the iMac 21.5 i3 a month ago from them, outside of Amazon.co.uk - but that is Another story !:Smirk:

pedropete 05-08-2011 02:19 AM

Quote:

Originally Posted by Kevriano (Post 1231397)
Yes those prices include VAT at 20%. That's one reason for the difference BTW, our high VAT rate.
If you could import from the US (which a lot of companies - Apple, Roland for example) don't allow, you would still have to pay import duty (7% I think) and then VAT on top, so the difference would not be so large.
Welcome to the UK!

I know that the States in the USA all have different sales taxes etc
How does that affect say Amazon.com - when they agree to deliver a product outside the USA ?
Do they include export / import duty at source ?

Kevriano 05-08-2011 02:45 AM

Quote:

Originally Posted by pedropete (Post 1231399)
I know that the States in the USA all have different sales taxes etc
How does that affect say Amazon.com - when they agree to deliver a product outside the USA ?
Do they include export / import duty at source ?

Kind of. There are very few things that they will, and generally they are VAT exempt and smaller items, so the sales tax for the US is included.

thurstmw 05-08-2011 03:39 AM

If you want to order it and get it sent to my house I will make sure you get it :-).

Aptmunich 05-08-2011 06:19 AM

Here's the deal:
- As has been stated, US prices do not include sales tax
- Sales tax is on average much lower in the US, compared to the UK's VAT
- Currency fluctuations aren't immediately corrected
- VAT is high in the UK, but you get things like free healthcare because of it


Having said that, if you remove sales tax from the equation, the MacBook Pro 13" is still about 60 more expensive in the UK - but that's not unheard of IMO.

pedropete 05-08-2011 06:45 AM

Quote:

Originally Posted by Aptmunich (Post 1231453)
Here's the deal:
- As has been stated, US prices do not include sales tax
- Sales tax is on average much lower in the US, compared to the UK's VAT
- Currency fluctuations aren't immediately corrected
- VAT is high in the UK, but you get things like free healthcare because of it


Having said that, if you remove sales tax from the equation, the MacBook Pro 13" is still about 60 more expensive in the UK - but that's not unheard of IMO.

So - let me get this right...
When you buy from Amazon.com - they don't charge any extra sales tax - because they're not 'State' ?!
Doesn't sound right !

DON'T think that GB's much-lauded and rightly so - N.H.Service....
Has any relevance to the ridiculously over-inflated cost of Macs in that country - with Respect !!
Unless - the prices cause stress-related illness.....:P

Have to say - I'm still YET TO HEAR ANY DECENT ARGUMENT TO EXPLAIN THIS CRAZY ANOMALY......

OK - I was holding this back - part Devil's Advocate - mind thee....
Americans just would NOT PAY the sort of prices inflicted on the Euro Consumers ?
And - their Gov.t have favourable trading deals with other countries by dint of their World Dominance as an economic Giant....
So - it follows that they get / 'influence' massive discounts...
Which they pass-on to their customers...
While still making a very healthy mark-up and Profit !?

How does that scenario sound ??:Smirk:

P.S. Can't see where you get your Mac Book Pro calculations from !
It's way-more expensive than this.
I should know I bought this model - about 20 months back - from Apple Educational Store UK
Even with my educational discount, I stil had to pay a Fortune...
Although - they did give me upgrades to hard drive and RAM
Which made it even cheaper than what Amazon.co.uk were asking..
And - a half-price new iPod Touch 32gb
And - a discount wifi printer
BUT - they still wouldn't deliver to me in Spain !
Had to post to my family's UK Home
And my eldest Son brought out all the stuff incl. the quite bulky printer
When he came for the summer !

pigoo3 05-08-2011 06:53 AM

Quote:

Originally Posted by pedropete (Post 1231391)

I DON'T UNDERSTAND !
I thought we lived in a 'Free Trade World' naively...?

See here's one main issue that is over-looked. We DO NOT live in a "Free Trade World"!!!

Various countries have:

- import fees/taxes
- export fees/taxes
- VAT (like in the UK)

* Some countries tax imported goods as a way to "protect" domestic industries...this is called a "protectionist economic policy". If this wasn't done (in some countries)...whole domestic industries would fail...and 10's of thousands of people would be out of work.

* Some countries "manipulate" their currency...so that favorable exchange rates can be attained...or that import/export trade balances for an individual country are "politically correct. An example of this is China. China has been accused by the United States of manipulating their currency...which effects:

- monetary exchange rates
- financial market valuations for stocks, bonds, etc.
- import/export trade balances

The bottom line is...we DO NOT live in a "Free Trade World". We have NEVER lived in a "Free Trade World"...and at least for the predictable future...we never will!

Now more specifically to Apple computers. If an iMac 27" (i5 model) sells for $1697 in the United States...what we don't know is...what does Apple charge each country (before any import taxes/import fees/VAT). There are probably fees/taxes (in some countries) that may be specifically targeted towards electronic goods that may not even be known by the general public.

So the question would be...If a Macintosh computer costs more in other countries (compared to the US)...how much of that higher cost is due to:

- Apple charging higher prices
- each individual country adding fees/taxes/VAT that increases the price to what is seen at each countries Apple Store

...maybe it's a combination of both.

Here's an article regarding international pricing of iPad 2's:

iPad Gets Backlash Over International Pricing | PCWorld

Here's a quote from the article...where Steve Jobs responds to complaints about international pricing:

"Steve Jobs Replies:

With angry customers e-mailing him over the U.S.-international price differences, Apple CEO Steve Jobs has once again taken to his iPhone to respond to complaints. Jobs reportedly said in an e-mail to an obfuscated U.K. customer that he needs to educate himself, explaining that U.K. prices must by law include VAT (17.5 percent), while U.S. price do not include tax -- hence the difference.

In another case, in Germany, where users discovered that iPad prices are higher than in other European countries, Jobs reportedly told a disgruntled customer to blame his government, as Germany just added a new copyright levy for computers. Jobs later revealed in an e-mail that the German iPad won't be more expensive than in France or Italy, after he found out the tablet is not subject to the German copyright tax."


One last final example...regarding the pricing of goods & services in various countries. Oil. The price of crude oil (a commodity) is a world wide price. If all country's in the world "theoretically" can pay the same price for a barrel of crude oil...why do prices for gasoline vary so much from country to country???

Some of the price differences are due to:

- Volume purchased. The more barrels of oil you buy...you get a small volume discount.
- Cost to ship the oil to various countries. If a country is located close/far to an oil producing country...there may be lower/higher transportation costs.
- an oil purchasing country may not have oil refining capabilities...so they pay a higher price for gasoline because someone else (another country) needs to refine the oil into gasoline for them/

But the MAJOR reason gasoline costs are so different in various countries is...each country has different ways that they tax a gallon or liter of gasoline. Some countries more...some countries less.

The same thing applies to Apple computers. It's possible that Apple charges most or all countries around the world about the same price for an iMac, a MacBook, or a Mac Pro. Where the major differences occur...may be due to the taxes/fee's that each country adds to these imports...which makes them much more expensive than in the United States.

Sorry for the extremely long post!,

- Nick

Aptmunich 05-08-2011 07:40 AM

Quote:

Originally Posted by pedropete (Post 1231460)
So - let me get this right...
When you buy from Amazon.com - they don't charge any extra sales tax - because they're not 'State' ?!
Doesn't sound right !

It isn't. US online store prices show you the price WITHOUT the sales tax. But you may be charged sales tax during checkout, depending on which state you are in. The law seems to be that you only pay sales tax if the company you're purchasing from has a presence in your state, which amazon often doesn't.

But generally speaking you can add 1-12% sales tax onto the price quoted on US websites.

Quote:

Originally Posted by pedropete (Post 1231460)
DON'T think that GB's much-lauded and rightly so - N.H.Service....
Has any relevance to the ridiculously over-inflated cost of Macs in that country - with Respect !!

Absolutely it does. We pay much higher tax on every purchase in Europe. A large portion of those taxes goes to maintaining the wellfare state. Where do you think the money comes from? Largely from income tax and VAT.

Quote:

Originally Posted by pedropete (Post 1231460)
P.S. Can't see where you get your Mac Book Pro calculations from !

From Apple's US and UK online stores. Check it yourself if you don't believe me. But unless you take the VAT out of the equation, you can't accurately compare prices.

pedropete 05-08-2011 11:16 AM

Quote:

Originally Posted by pigoo3 (Post 1231464)
See here's one main issue that is over-looked. We DO NOT live in a "Free Trade World"!!!

Various countries have:

- import fees/taxes
- export fees/taxes
- VAT (like in the UK)

* Some countries tax imported goods as a way to "protect" domestic industries...this is called a "protectionist economic policy". If this wasn't done (in some countries)...whole domestic industries would fail...and 10's of thousands of people would be out of work.

* Some countries "manipulate" their currency...so that favorable exchange rates can be attained...or that import/export trade balances for an individual country are "politically correct. An example of this is China. China has been accused by the United States of manipulating their currency...which effects:

- monetary exchange rates
- financial market valuations for stocks, bonds, etc.
- import/export trade balances

The bottom line is...we DO NOT live in a "Free Trade World". We have NEVER lived in a "Free Trade World"...and at least for the predictable future...we never will!

Now more specifically to Apple computers. If an iMac 27" (i5 model) sells for $1697 in the United States...what we don't know is...what does Apple charge each country (before any import taxes/import fees/VAT). There are probably fees/taxes (in some countries) that may be specifically targeted towards electronic goods that may not even be known by the general public.

So the question would be...If a Macintosh computer costs more in other countries (compared to the US)...how much of that higher cost is due to:

- Apple charging higher prices
- each individual country adding fees/taxes/VAT that increases the price to what is seen at each countries Apple Store

...maybe it's a combination of both.

Here's an article regarding international pricing of iPad 2's:

iPad Gets Backlash Over International Pricing | PCWorld

Here's a quote from the article...where Steve Jobs responds to complaints about international pricing:

"Steve Jobs Replies:

With angry customers e-mailing him over the U.S.-international price differences, Apple CEO Steve Jobs has once again taken to his iPhone to respond to complaints. Jobs reportedly said in an e-mail to an obfuscated U.K. customer that he needs to educate himself, explaining that U.K. prices must by law include VAT (17.5 percent), while U.S. price do not include tax -- hence the difference.

In another case, in Germany, where users discovered that iPad prices are higher than in other European countries, Jobs reportedly told a disgruntled customer to blame his government, as Germany just added a new copyright levy for computers. Jobs later revealed in an e-mail that the German iPad won't be more expensive than in France or Italy, after he found out the tablet is not subject to the German copyright tax."


One last final example...regarding the pricing of goods & services in various countries. Oil. The price of crude oil (a commodity) is a world wide price. If all country's in the world "theoretically" can pay the same price for a barrel of crude oil...why do prices for gasoline vary so much from country to country???

Some of the price differences are due to:

- Volume purchased. The more barrels of oil you buy...you get a small volume discount.
- Cost to ship the oil to various countries. If a country is located close/far to an oil producing country...there may be lower/higher transportation costs.
- an oil purchasing country may not have oil refining capabilities...so they pay a higher price for gasoline because someone else (another country) needs to refine the oil into gasoline for them/

But the MAJOR reason gasoline costs are so different in various countries is...each country has different ways that they tax a gallon or liter of gasoline. Some countries more...some countries less.

The same thing applies to Apple computers. It's possible that Apple charges most or all countries around the world about the same price for an iMac, a MacBook, or a Mac Pro. Where the major differences occur...may be due to the taxes/fee's that each country adds to these imports...which makes them much more expensive than in the United States.

Sorry for the extremely long post!,

- Nick

OK Nick - I think this is the kind of answer I was hoping for all along...

Unpalatable or not - I think it probably goes a long way to explaining what has often appeared an annoying anomaly to we Europeans !!
We often find it hard why in - 'the Richest and most Prosperous Country - Economy in the World ' - things are apparently - so much cheaper than elsewhere !
An example closer to home here - I can buy superb bottles of Rioja red wine in Spain for about 5 Euro's - yet the Exact Same Brand of wine would cost about 12-15 GBP in the UK....
Because the UK Gov.t' impose a criminally high Duty on Alcohol...:|

It's been said that for any 5 Pounds retail bottle of wine in the UK - once you deduct out the duty etc - the wine inside is worth about 40pence !!
Which isn't the Highest quality you will get..
Same goes for Petrol re Duty etc
And - tobacco products....:Angry:

Thanks !

pedropete 05-08-2011 11:25 AM

OK - so continuing this logically re the 'No Free Trade' concept / reality - are Amazon.com UNABLE to deliver the iMac 27" because of the U.S.A.'s trade policies ?
And - that they would be breaking the Law - if they shipped it out to me in Europe ?

vansmith 05-08-2011 11:32 AM

Quote:

Originally Posted by pedropete (Post 1231391)
I cite the recently launched iMac 27" - the i5 model - which is currently priced at Amazon.com at $1,697.00.

The SAME machine on Amazon.co.uk is priced at GBP 1,649.00 !

Factor in the current $ to GBP Exchange rate of 1.64 - and I don't need to tell you the math !?

You're going to find price disparities anywhere given the constant fluctuations in currency values beyond the differences in taxes and import costs already mentioned. The low-end MBP is $1200 USD while it's $1249 CAD which, when currency values are accounted for, I end up paying the equivalent of $1291 USD. It used to be worse than that but that's not the point. The point here is that those price "gaps" you see are universal and are by no means limited to Europe. Every country outside of the origin (the US here) is going to be subject to those same three factors - currency values, tax differences and import/export costs.

Quote:

Originally Posted by pedropete (Post 1231391)
I DON'T UNDERSTAND !
I thought we lived in a 'Free Trade World' naively...?

So - when I hear you Americans, bleating on here about 'Macs are so expensive' etc
Spare a thought for your European brothers - please !?

Free trade exists between states and is not universal. Simple as that. As for having sympathy for the Europeans, it's hard to considering that not only are they still expensive in the US but buying European goods in NA is quite expensive. It's a two way street.

pedropete 05-08-2011 11:38 AM

Ironically - History ( my Degree subject as a former teacher of 20 years until 1999) reveals that it was the U.S.A. who practised rigid Protectionist Trade Policies in the period after the First World war - post 1918 - when the major European economies had fought themseves to a stand-still - bankrupting themselves in the process, and eager to regain their leading trading / commercial positions etc
Only to find that the U.S.A. had taken over most of their former trading areas etc
And - guarded their domestic industries by high import tariffs etc
So - you had defeated Germany, struggling to get itself back on its feet, while at the same time, being forced to pay punitive 'Reparations' or War Damages of 6,600 Billion Pounds equivalent...
Impossible.
Hence - the succession of weak minority govt.'s - and the rise of the Nazi Party under A. Hitler - and all that entailed for the 1930's etc
Brief History lesson - over.


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