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It is cheaper to fly to US than buy Adobe software in Australia

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Re: It is cheaper to fly to US than buy Adobe software in Australia

#111
As an Australian (now an NYC resident), I am no stranger to the price gouging that Australians have had to suffer although I must say that how it is now is much, much better than it was 10-20 years ago.

First, it's worth noting that US prices don't include sales tax. Australian prices include a 10% GST.

Second, international companies will end up doing their accounting in one currency. For tech companies unsurprisingly this is US dollars. Transactions in foreign currencies get converted to USD. Companies hedge themselves against FX risk by locking in exchange rates and giving themselves a buffer so they don't need to change prices every day. Ergo, things in foreign currencies will always cost a little bit more.

So if a Macbook Air costs US$999 and A$1099 (hypothetical, the Apple store is down so I can't check what the actual price is) then that's about right (given A$1 = ~US$1.04).

That all being said, high prices in Australia largely come from it being a small market and, more importantly, consumers putting up with it.

Books are the worst example of this. UK companies get the distribution rights for Australia. Australian copyright law largely protects them from imports (although this was relaxed by the previous Howard government in a 1am Senate vote). Yet what costs $10 in the US will cost $25 in Australia.

The Dell E6x00 laptops routinely cost The "waterbed effect" seems to play a part too. The US is a large single market so has a lot of purchasing power compared to pretty much any other market. I've thought that cameras are cheaper in the US (than Europe or Australia) for this reason more than anything else.

To give an Australian corollary to this: Dan Murphy, the largest alcohol retailer owned by one of the two supermarket conglomerates (Woolworths), is killing smaller competitors because their purchasing power is so large they can often sell things (at a profit) for less than non-chain stores can buy them wholesale.

For software in the era of digital distribution there's no justification for Adobe's prices here. It's the same software in the same language. Perhaps they needed different TOS/EULAs for Australia (or at least have them reviewed to make sure they are compliant with Australian law). That's about it.

One thing to be thankful for is the ACCC in Australia actually has teeth and through the Trade Practices Act and Corporations Act has a lot of power. The FTC in comparison seems to be a partisan paper tiger in comparison.

Re: It is cheaper to fly to US than buy Adobe software in Australia

#113
post #111

As an Australian (now an NYC resident), I am no stranger to the price gouging that Australians have had to suffer although I must say that how it is now is much, much better than it was 10-20 years ago. First, it's worth noting that US prices don't include sales tax. Australian prices include a 10% GST. Second, international companies will end up doing their accounting in one currency. For tech companies unsurprising…

Thanks for bringing up the currency risk - while certainly not responsible for the entire price difference, the cost for hedging risk against foreign currency in Australia has increased quite a bit according to the Australian central bank (from 5-10 basis points to 30-40 - http://www.rba.gov.au/publications/fsr/2010/mar/html/box-b.h...) which will definitely put a dent in your profit margin if you start accepting Aussie dollars.

Re: It is cheaper to fly to US than buy Adobe software in Australia

#114
post #7

The same thing happens in the UK. Napster for example charges more than 50% more for a download service in the UK, than in the USA. Completely ridiculous for an internet based download service. I was going to subscribe until I learned this. Can't support business's gouging their clients.

Is it possible that the royalties Napster has to pay in the UK to PRS, PPL, etc. are higher then what they have to pay in the US to ASCAP, BMI, etc.?

VAT also adds 20% to the price.

Re: It is cheaper to fly to US than buy Adobe software in Australia

#115
post #65

Earlier quoted context omitted.

Then again, even books sometimes have a 'mass market edition' for countries like India, that costs about a fifth than the US paperback. I'm not sure it makes sense to sell at the same price all over the world. What does it even mean 'to sell at the same price', who defines the exchange rate? The exchange rate of some currency often reflects market forces and speculation, and the purchasing power parity exchange rate…

I buy the Mass Market Edition books in India. They're printed in much cheaper paper, many times in greyscale. Not the same.

True, but are they worth so much less? Do you think that any publisher would sell their textbooks as ebooks for the same price to US students and to Indian students?

Re: It is cheaper to fly to US than buy Adobe software in Australia

#116
Some price comparison site should set up a how-much-it-would-cost-you-in-America feature for Aussies. You search for a product, see a few local prices, and the US price alongside.

Local vendors would scream at this sale-killing feature, and the PR win would be something amazing. It might even lower local prices.

Re: It is cheaper to fly to US than buy Adobe software in Australia

#117
post #52

I'm surprised no one mentioned the exorbitant prices of electronics in Brazil compared to the US. For example, the top of the line Macbook 15" retina in the Brazilian Apple store costs R$12599 which is around $6395USD, while the same in the US is $2799. A Brazil/Miami return flight is also around $1000 depending on the time of year. So theoretically it's cheaper for Brazilians to go to Miami, have a nice weeklong vac…

> The problem is the government/customs knows that and thus catches and taxes a lot of people who try to bring over $500USD worth of products. Does this mean the difference in the price of the Macbook is entirely taxes? Or, after paying an import duty at the airport, would the overall cost still be lower than buying the hardware domestically?

My friends in São Paulo just did that with an iMac - bought it in Arizona during their Christmas trip to the US, declared it at Guarulhos airport, paid the import imposts and still came in with a huge discount to the local retail price.

Re: It is cheaper to fly to US than buy Adobe software in Australia

#118
post #111

As an Australian (now an NYC resident), I am no stranger to the price gouging that Australians have had to suffer although I must say that how it is now is much, much better than it was 10-20 years ago. First, it's worth noting that US prices don't include sales tax. Australian prices include a 10% GST. Second, international companies will end up doing their accounting in one currency. For tech companies unsurprising…

> That all being said, high prices in Australia largely come from it being a small market

That doesn't explain why goods are cheaper in New Zealand[1].

If you have ever bought a pair of Levi's you would find that because they come from the same distributor the price for NZ and the price for AU are on the same tag, and the NZ price is consistently cheaper. You find the same on a lot of goods [2]

It is much more nuanced, Australia is specifically getting screwed. A combination of taking advantage of an early adopting wealthy market with heavy regulation, little local competition and our nieve willingness to play along.

[1] http://www.numbeo.com/cost-of-living/compare_countries_resul...

[2] http://www.2ue.com.au/blogs/2ue-blog/are-we-being-ripped-off... (This story mentions that Vegemite, an Australian product, is cheaper to purchase in the UK than in Australia).

Re: It is cheaper to fly to US than buy Adobe software in Australia

#119

There is no excuse why downloadable content should cost more -- economies of scale, shipping costs, and differences in taxes and exchange rates are all irrelevant. Even in the case of physical goods, the disparity is often drastically more than can be accounted for by the above reasons. This comment sums it up quite well: http://news.cnet.com/8618-1001_3-57568633.html?assetTypeId=1... There is a parliamentary committ…

There is no excuse why a movie ticket for a 7:00 PM showing should cost more than a movie ticket for the first showing of the day. If anything it should cost less because there are more people in attendance making the cost per attendee lower. Outrage! Let's get the United Nations, Interpol, and the Parliament to intervene!

Re: It is cheaper to fly to US than buy Adobe software in Australia

#120

There is no excuse why downloadable content should cost more -- economies of scale, shipping costs, and differences in taxes and exchange rates are all irrelevant. Even in the case of physical goods, the disparity is often drastically more than can be accounted for by the above reasons. This comment sums it up quite well: http://news.cnet.com/8618-1001_3-57568633.html?assetTypeId=1... There is a parliamentary committ…

I couldn't agree more!
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