Touch Global Glo Prices (are you being overcharged?)

[murg]

Seeing how we're being charged a 23% premium for the Glo in Australia, I was curious what Kobo was charging for the Glo around the world.

The base Canadian retail price is CA$130 at Indigo.ca

Kobo's Australian distributor, Collins, is pre-selling the Glo at AU$160.

The retail equivalent price FX calculation is: CA$130 x 0.979087 = AU$127.291 (AU$130)

Collins (in AU$): $160-$130 = $30 premium, or 23%

Note: for the sake of smoothing out the FX rates (and the comparision), we'll peg the local equivalent at AU$130, or parity with the Canadian retail price.

Of note is that Collins did have a one-day price reduction on their pre-orders to AU$127.50, which is the local equivalent retail price.

I'm using xe.com for the FX rates.

[murg]

And before someone brings up sales taxes and shipping costs...

If the distributor is paying out cash for the devices at the wholesale level, then any import duties are based on the distribution cost of the devices, which will be somewhere between a 30%-50% discount on the retail price.

Depending on where you buy the device in Canada, there is between 5% and 15% sales taxes (GST/PST/HST).

As such, this makes Australia's 10% GST roughly equivalent to Canada's sales taxes, so the AU GST cannot be blamed for any part of the premium. Or at least no more than 5% (which is the Canadian GST rate).

If the distributor is acting more as an agent for Kobo (paying the monies to Kobo when the devices are sold), then the distributor has no risk and shouldn't be charging a premium.

Shipping cost is another factor. The devices are being made in Taiwan/China. The shipping costs for a single device should be no more than $4, based on various postal rates and the basic lightness of the devices. This shipping rates drops when shipping a pallet or container of the devices.

While airfreight can get expensive, if the devices are being shipped by sea (as a rumoured November release date suggests), then the freight costs are very minimal. This is based on the fact that bottled water is being shipped from China and sold in Australia. If you can ship bottled water from China and sell it at competitive (or even cheaper) prices, when the costs associated with sea shipping the devices will be less than $1 per device.

[robko]

Originally Posted by murg

Depending on where you buy the device in Canada, there is between 5% and 15% sales taxes (GST/PST/HST).

As such, this makes Australia's 10% GST roughly equivalent to Canada's sales taxes, so the AU GST cannot be blamed for any part of the premium. Or at least no more than 5% (which is the Canadian GST rate).

Not sure how your GST works (from your post I'm gathering it's included in the sales price) but in Canada it is added on at the register -- so in Ontario my final price that will be charged to my credit card will be $130 + 13% or $146.90 CAD. So your GST could well account for 10% of the cost difference if it's included in the retail price.

[murg]

In Australia, the GST is included in the sale price.

Best Buy is preordering the Glo for US$130 in the US, which has no national sales tax.

[murg]

Here is the base calculation for Australia.

Based on a $130 Canadian retail price, 40% discount to the Distributor, 30% discount to the retailer, 10% GST, CAD/AUD exchange rate at parity:

There are three transactions: Distributor buying the devices from Kobo, the retailer buying the devices from the distributor and the customer buying the device from the retailer.

$160 Australian Retail Price:

Type  From    To      Amount  Kobo  Dist    Retail    Cust      Tax
----  ------  ------  ------  ----  ------  --------  --------  -------
Cost  Dist    Kobo     78.    78.   - 78.			
GST   Dist    Tax       7.8         -  7.8                         7.8
----  ------  ------  ------  ----  ------  --------  --------  -------
Cost  Retail  Dist     91.            91.   -  91.		
GST   Retail  Dist      9.1            9.1  -   9.1
GST   Dist    Tax       9.1         -  9.1                         9.1
GST   Tax     Retail    9.1                     9.1             -  9.1
----  ------  ------  ------  ----  ------  --------  --------  -------
Cost  Cust    Retail  145.45                  145.45  - 145.45	
GST   Cust    Retail   14.55                   14.55  -  14.55	
GST   Retail  Tax      14.55                -  14.55            - 14.55
----  ------  ------  ------  ----  ------  --------  --------  -------
                       Total  78.      5.2     54.45  - 160.      22.35
----  ------  ------  ------  ----  ------  --------  --------  -------
Type  From    To      Amount  Kobo  Dist    Retail    Cust      Tax

$143 Australian Retail Price ($130 ex GST):

Type  From    To      Amount  Kobo  Dist    Retail    Cust      Tax
----  ------  ------  ------  ----  ------  --------  --------  -------
                       Total  78.      5.2     39.    - 143.      20.08

Analysis to follow...

[soulfuldog]

The value of the Canadian and Australian dollar seem pretty similar, so if the full price you pay is $150 CAD in Canada and $160 AUD in Australia, it's not a huge difference is it?

Here in the UK the Glo will sell for £100 GBP, which is $155 AUD, so that's only $5 less than the price you are paying.

So you are clearly not being charged a 23% premium.

If you want to compare it with the base price in the US, that's your choice, but you are ignoring the fact that there is normally a state tax to be added to that price, and it's pretty much a fact of life that you can buy things a bit cheaper in the US.

[murg]

The price in Canada is $130.

I'm still trying to work out the various scenarios in the various countries.

[soulfuldog]

Didn't robko just post an explanation that the price he will actually pay in Canada is $150 (once the sale tax that is added)?!?

[ltr]

Originally Posted by robko

Not sure how your GST works (from your post I'm gathering it's included in the sales price) but in Canada it is added on at the register -- so in Ontario my final price that will be charged to my credit card will be $130 + 15% or $149.50 CAD. So your GST could well account for 10% of the cost difference if it's included in the retail price.

Why are you adding 15%, when the sales tax in Ontario is 13% ?

That's $130 +13% = $146.90 CAD

ltr

[lkodk]

In Denmark they are starting to show up as preorders in different webshop.
Here the price is around dkk 1200,- incl. 25% VAT.

That's around USD 209 / CAD 203 / AUD 199

I really hope that this will go down once the device actually hits the shops around here.

[Mrs_Often]

Originally Posted by lkodk

In Denmark they are starting to show up as preorders in different webshop.
Here the price is around dkk 1200,- incl. 25% VAT.

That's around USD 209 / CAD 203 / AUD 199

I really hope that this will go down once the device actually hits the shops around here.

Man! You're almost better off buying the Glo from the Netherlands for €130 and paying €14.50 postage (easereader.nl will post to Denmark, they don't have preorder (yet) though)...

€144.50; 1077ddk; 188 USD; 183 CAD; 180 AUD

[lkodk]

Thanks Mrs_Often. I have actually looked at easereader.nl previously (before the danish stores announced prices) because I've read somewhere they deliver internationally.
But as their store is dutch only, I pretty much gave up on it.

But if these prices in Denmark stick, then I will definitely look towards the Netherlands again. :-)

But I hope the prices are just "placeholders" because they don't know the exact price yet, or that they will be adjusted once the device is released (start november?!?) and they realize they don't sell any devices :-)

[Solicitous]

Originally Posted by murg

The price in Canada is $130.

I'm still trying to work out the various scenarios in the various countries.

In Canada (and the US I believe) prices can be advertised without sales tax. Here in Australia it is law the advertise the final sale price of an item, which means the price + any taxes.

So here in Australia the Kobo Glo is advertised at $159.99. If they were to advertise it ex-GST it would be $145.45.

So the price difference (ignoring any minor exchange rate differences) is roughly $15 more here in Australia. What you need to take into consideration is;

a) Shipping costs to Australia.
b) Shipping costs within Australia (buying from Collins is free shipping to your door).
c) Lack of local competition.
d) Australian consumer law that comes into play when you buy from an Australian store (we are really protected).

[murg]

Does anyone know what the import duty percentage for importing into Canada is?

[cesarx4s]

Kobo just started to be sold here in portugal this week by Fnac. It seems that they only have kobo touch and they cost 119.90€. No new kobos on sight.

"Way to go!!!"

The way I see it portuguese buyers are being fooled into buying outdated hardware, for new.
Well done Fnac!! Well done Kobo!!