The All New Kindle - ripoff!

[Carol Haynes]

The all new Kindle:

US Price $79
http://www.amazon.com/Kindle-eReader-eBook-Reader-e-Reader-Special-Offers/dp/B0051QVESA

UK Price £89
http://www.amazon.co.uk/dp/B0051QVF7A

Yes now we don't even have pound for dollar number transfer!

£89 = $139

So the all new reduced price Kindle is nearly twice as expensive in the UK as the US!

[Renegade]

"market segmentation" = "rape your customers as fast/hard as possible"

It's nothing new.

I could barely believe the mass-rape here in Australia. It's nutty.

[nosh]

Atleast they're selling it there. I had to buy my iPad at a premium from the grey market - (sans warranty!) Thankfully, I haven't had a single problem with it.

troll

(because Steve Jobs is God and Apple makes magic.   )

[mahesh2k]

Here in this part of the world, we're ripped off no matter how and when you see it. Thanks to our government-price rape is beyond imagination.

Kindle Touch = 4900-RS+VAT+Import TAX+Delivery+LBT+Sellers Profit=10599/RS+*  =220$
Kindle Fire = 9744-RS+VAT+Import TAX+Delivery+LBT+Sellers Profit=19,208RS+*      =400$

+ Payment processor charges and other charges additional (Paypal is worst when it comes to currency conversion, we lose money here no matter how we do it). No fixed price for any electronic gadget.

ebay prices

ebay suckers.
http://orders.ebay.in/ws/eBayISAPI.dll?ImportHubViewItem&itemid=120787429002

[Renegade]

$220? $400? Oh my god...

[rgdot]

Cheaper to get someone to buy you one and ship it.

[Carol Haynes]

Oops - got this slightly wrong!

The US has two versions of the standard new Kindle. The $79 version is ad supported (good eh?).

If you want the equivalent of the UK version (ie. not ad supported) it is $109. Still $30 cheaper.

Someone pointed out to me that the UK version included taxes and Amazon US ads taxes at checkout - but even so the state with the highest sales tax is California at 8.25% so even at the most expensive in the US it costs $118, still $21 cheaper than the UK market (and over $100 cheaper than SA).

Strangely in Europe the Germans get it marginally cheaper than the UK (about £5 UK) but it isn't even sold in France - amazon.fr redirects to amazon.com.

You also have to be careful if you buy products in the wrong region - Amazon say some of the US models don't work outside the US - though they aren't specific!

[Renegade]

If you want the equivalent of the UK version (ie. not ad supported) it is $109. Still $30 cheaper.

Still, that's more than 20% more expensive. (22%) It does not cost 22% more on a hundred-dollar product to ship it from the US to the UK, or from wherever to the UK.

I would love to know the W5 on that 20%.

[Dormouse]

VAT=20%
Does that do most of it?

[40hz]

I don't think US sales taxes have any bearing on non-US prices. US prices are always quoted to domestic markets without any tax being factored in.

I think the Kindle is just more expensive outside the US. And I'd guess it's probably more because there's a buffer amount factored in for exchange rate fluctuation than for any other reason. Amazon has also probably built in some 'contingency' for "inventory shrinkage" (i.e. in-transit theft/damage and arbitrary 'customs' seizures). And possibly something additional for any potential legal hassles (i.e. local IP or patent lawsuits)

But if you're really getting skunked on price I'd first look at what import tariffs might be being added - and then at what the local major distributors may be doing to jack up the price tag.

***

Amazon US ads taxes at checkout

FTI:  In the US, there is no sales or VAT tax on the federal level. Sales taxes are strictly state taxes. The federal government does charge excise taxes on some products, but they're primarily luxury items. Electronics devices aren't considered luxury items.

Amazon also does not currently collect taxes on sales to every state it ships to:

Items sold by Amazon.com LLC, or its subsidiaries, and shipped to destinations in the states of Kansas, Kentucky, New York, North Dakota, or Washington are subject to tax.

That doesn't mean the customers aren't legally obligated to pay the sales tax. You're supposed to fill out a form and remit it to your local state revenue service. But enforcement is spotty to non-existent, so 99.9% of the public ignores it.

It's also a little more complicated in that many states also have local "sales & use" taxes which get lumped on top of state rates. New York is probably has the most complex tax structure. (NY State sales tax is 4%. But if you live in New York City, you'll pay 8.875%  (4% State + 4.5% City + 0.375% for Metropolitan Transit Authority services.)

It also gets further complicated by states that break products and services into categories with differing sales tax rates.

This nonsense is one of the reasons (there are others) why the state governors haven't been successful in getting the US Legislature to enact federal laws that would require online merchants to collect taxes in states where they don't have a physical (i.e. brick & mortar) presence. But they've been persistent. And with the cutback in federal funds flowing back to the states (since we're currently paying for a huge overseas military deployment) it will probably only be a matter of time before that changes.

[Renegade]

VAT=20%
Does that do most of it?

If the price Carol quoted is VAT inclusive, then yes.

Carol? Was that price with VAT?

[Darwin]

In the UK prices quoted include ALL taxes. This makes shopping in the UK (or Korea or Europe generally for that matter) a pleasure because you look at the price, you count out your change, and that's what you pay at the til. In Canada (and the US) we have "open" taxation, which means that the labelled price is the "true" price before taxes and taxes are calculated and collected at the til. BS in my opinion. It makes shopping confusing more than anything, especially because, as 40hz points out, every state/province has their own tax structure.

[Darwin]

OK... shouldn't have said shopping in the UK is a "pleasure": alcohol and sweets are cheap, but darned near everything else induces profound sticker shock. I remember being in university in England in the mid-90's and again in the early 2000's with the exchange rate being around 2.5 Cdn. dollars to the pound and thinking "Wow! Stuff here is cheap!" until I realized that 4.50 pounds was more expensive than $5, whcih was almost invariably the case - you could swap out the pounds sign for a dollar sign and that was the way things were priced. I remember USED Levis jeans, which I used to buy for about $30 NEW in Canada, being close to 100 pounds in 1994. Crazy.

[Carol Haynes]

Someone pointed out to me that the UK version included taxes and Amazon US ads taxes at checkout - but even so the state with the highest sales tax is California at 8.25% so even at the most expensive in the US it costs $118, still $21 cheaper than the UK market (and over $100 cheaper than SA).

That was the point of my previous post - the UK VAT is included BUT even taking that into account AND adding Californian Sales Tax (which is near double most states, and quite a few are zero rated) the UK version is still $21 more than the US version.

I don't see how shipping or import/export duty would have much bearing - the devices are probably all made in the far east and shipped directly to the sales area. Even if it was shipped to the UK from the US the sort of bulk Amazon ship and the margins that they can acheive with shippers would not amount to $21 per unit. Plus if they are exporting product they will be able to recoup the import duties.

[mahesh2k]

Letter from Jeff Bezos on amazon front page.

Kindle Fire has a radical new web browser called Amazon Silk. When you use Silk – without thinking about it or doing anything explicit – you’re calling on the raw computational horsepower of Amazon EC2 to accelerate your web browsing.

I just connected this and this with the bolded quote.

[zridling]

Carol's anger is righteous. It's 2011 and the planet, countries, currency, and economies are more connected than ever in history. Virtually every gadget is made in China, so there's no good reason for it to cost more, not even £12 or £25. I order things from the UK all the time and I get the VAT removed at checkout. It's silly.

[Renegade]

Carol's anger is righteous. It's 2011 and the planet, countries, currency, and economies are more connected than ever in history. Virtually every gadget is made in China, so there's no good reason for it to cost more, not even £12 or £25. I order things from the UK all the time and I get the VAT removed at checkout. It's silly.

+1

I've got a few things to say on the topic coming up soon. I'll post in the Developer's Corner for that though.

[xtabber]

Amazon is being less than up-front about the new Kindles.  For example, the Kindle Touch has been widely touted as undercutting the Nook Touch at $99 vs. $139, but the $99 price is only for an ad-supported version, which you will only find out by actually going to the product page. The regular Kindle Touch is the same price as the Nook Touch at $139.

Contrary to what is widely reported in the tech press, none of the new products, including the Fire, are being sold at a loss with the aim of making it up in sales through Amazon's Kindle store.  The pricing is not even terribly aggressive, given what is available to knowledgeable tablet/e-reader shoppers. Of course, the tech press is not exactly knowledgeable when it comes to this kind of thing.

The biggest problem that I see with all of the new Kindles is that they are locked in to the Silk browser, which means that Amazon will be scanning ALL of a user's web browsing, not just purchases at Amazon,  for data mining purposes.

One reason I use several different browsers is to keep one free of all cookies, so that when I go to a site like Amazon and search for something , I don't get steered to what the vendor thinks it can sell me. Amazon and most other big online vendors always do this, although, in Amazon's defense, I will say that they at least don't switch prices You'd be surprised how many sites display different prices on the same item when they know who you are vs. when they don't.

[Carol Haynes]

which means that Amazon will be scanning ALL of a user's web browsing, not just purchases at Amazon,  for data mining purposes.

That's one of the things that would definitely put me off using Silk - everything you browse goes through and is cached on their system. Not only do that have the opportunity to monitor browsing habits even more effectively than they do now but they can tie every single page you visit to you personally. That isn't providing any kind of service - it is called stalking!

I'm sure it is illegal to do this sort of thing in the UK (even with a user agreement). Maybe that's why Fire isn't being sold here. France is even more neurotic about privacy - hey guess what they don't sell Kindle in France at all!

I'd say wait for the law suits (and probably huge class action suits at that) to start rolling in! Amazon's customers aren't religious like Apple's which is presumably why Apple hasn't had huge class action yet over the huge amount of data mining on iPhones, iPads and now even iPods.

[xtabber]

It seems that with the new Kindle, you can buy the cheaper "Special Offers" version for $79 and then, at a later date, pay the additional $30 cost to remove the special offer advertising. That brings the cost up to $109, which is exactly the same as buying the reader without advertising. Don't know if this will also be the case for the Kindle Touch and Fire when they come out.

That's certainly a smart way to get people to try the Kindle for cheap, then pony up for the full price once they are hooked.  But it also suggests that there is more to the Kindle/Silk symbiosis than first meets the eye.

[nosh]

kindle is the best e-book reader and wonderful investment for avid readers (holds up to 3500 books), The device is small and light. With kindle we can read many book only with one device. regularry, kindle have three choise, ie kindle wifi, kindle wifi + 3g and kindle DX.

Does it have a backlight? I hate to have a light on for my night reading sessions.

[steeladept]

I find it funny all this outrage at U. S. companies doing this (not saying it's not wrong, just read on).  Meanwhile it happens to U. S. companies and people just as frequently, if not moreso.  The key here is the U. S. computer market provides much of the innovation and many of the largest companies are here.  However, in the electronic entertainment industry (consoles, TV's, Stereo's, etc.), Japan is probably the single biggest player with the likes of Sony, Onkyo, et. al.  These are all almost double the price in the U. S. over Europe despite the VAT taxes etc.  Note, that is EUROPE, not Japan!  Likewise, East Asian auto manufacturers trounce American auto manufacturers because they can produce them so much cheaper (for a ton of reasons).  Do they lower the prices in the U. S. because of this?  Well, yes, to just below their American competition.  They don't price it based on a percentage profit, they price it based on what they can get in that area.  I understand the outrage, but lets direct it all all industries and countries practicing this, not just the U. S. computer industry.

[Renegade]

I find it funny all this outrage at U. S. companies doing this (not saying it's not wrong, just read on).  Meanwhile it happens to U. S. companies and people just as frequently, if not moreso.  The key here is the U. S. computer market provides much of the innovation and many of the largest companies are here.  However, in the electronic entertainment industry (consoles, TV's, Stereo's, etc.), Japan is probably the single biggest player with the likes of Sony, Onkyo, et. al.  These are all almost double the price in the U. S. over Europe despite the VAT taxes etc.  Note, that is EUROPE, not Japan!  Likewise, East Asian auto manufacturers trounce American auto manufacturers because they can produce them so much cheaper (for a ton of reasons).  Do they lower the prices in the U. S. because of this?  Well, yes, to just below their American competition.  They don't price it based on a percentage profit, they price it based on what they can get in that area.  I understand the outrage, but lets direct it all all industries and countries practicing this, not just the U. S. computer industry.

Good point.

We don't talk much about consoles or cars here, so that's probably why they go unnoticed.

[mahesh2k]

I don't think this is because of manufacturers pricing, but more of custom tax and other taxes applicable in respective country, for which US or any other manufacturing countries are not responsible for the price hike.

[tranglos]

in Amazon's defense, I will say that they at least don't switch prices You'd be surprised how many sites display different prices on the same item when they know who you are vs. when they don't.

Amazon did try this some years ago, got called on it and backed down fast. At least they can learn!