It is no secret that same products have different prices in various countries. So, I went out to the big web wide world and examined the issue myself across 5 international markets.
And indeed, when the Sony Playstation, iPad 3 and the Samsung Galaxy S3 prices were compared across the globe, significant differences were shown. When totalled, the cost of products in the cheapest country(US) was nearly $500 less than the most expensive one (Brazil). So why is that?
Taxes and import charges
Value Added Tax (VAT) varies from country to country and plays an intricate part in the final pricing of the product. Yet another fee is sales tax, which whether the product is imported, is taxed on its full price. If however, the product is exported, only VAT is charged. So when importing goods from a country that has VAT into a county which does, charges of both VAT and sales tax apply.
Import charges is another issue, Brazil for example has a 60% import fee, which explains the high costs of their products. The reasoning behind this is so consumers will purchase home manufactured products and contribute to the country’s economy.
Another reason for the mark up is more to do with how well is the brand considered in that country and less about the actual cost of producing the product. A product which is considered by its consumers to be of high value can be sold at a higher price.
Furthermore, certain variable costs such as conducting business, services and hiring staff can also influence the final price of the product.
So if the product prices are different, what does it say about the cost of travelling to those countries? When comparing the stay per night in a 4 star hotel in each country, the difference between the lowest and highest available in one of the major cities was also evident.
However, if you are price sensitive, hotel charges and shopping expenses are only part of the equation. A flight with American Airlines in an off peak season from a US city such as New York would be as following:
Therefore, if your going for more than 2 weeks you might want to consider vacationing to China as it will be a similar price if not cheaper. However, when you finalize your holiday budget don’t forget to include exchange rate charges since these could have have a serious impact on your expenses. Do your research to get the best possible rates.