50% Higher Prices for Brand Names?

Taiwan Living in Taiwan
1

I wasn’t sure which forum was best for this question because it’s specialized to music equipment, but maybe it’s of more general interest. I went to the large, well-known ATB music store near XiHu MRT to look at keyboards, and found that Roland and Yamaha equipment is 50% more expensive here than in the U.S. It wasn’t a bargaining thing: the sales person and I negotiated for a while and then sat down together to look at well known U.S. internet stores where, for example, a USD $1000 keyboard cost NTD $44,000 and not NTD $30,000. This price difference was across the board for all Roland, Yamaha, and Casio equipment, and the sales person said there was no way they could go any lower, and she let me leave the store.

I’m very curious as to the cause of this bizarre pricing. Nothing seems logical:

  1. the store wasn’t strongarming me into a higher price. It just wasn’t like that, and they let me leave
  2. Taiwan average income is less than U.S., so they’re not simply elevating the price because people can afford and are happy to pay it.
  3. It doesn’t appear to be a supply/demand thing where they have so few pieces they only need a few purchasers to clear their inventory. I mean, the supply is standardly plentiful because you can always special order these popular brands.
  4. Protectionism doesn’t make sense. Taiwan manufacturers don’t make competing equipment.
  5. State “corruption”–where there’s an elevated customs fee so that the government can collect a bigger cut–doesn’t make sense because the elevated price level just reduces the pool of potential purchasers.
  6. Transportation costs don’t account for the price difference from the U.S., right? These companies’ stuff ships from Japan, so it can’t be more expensive to deliver the goods to Taiwan.
  7. Can it be a volume thing? Taiwan’s smaller market can’t move as many pieces, so they don’t have the U.S.'s volume purchasing power? That still doesn’t make sense to me in this case.

I thought maybe a clue as to what’s going on in this specialized case would shed interesting light on other economic issues that I don’t understand about Taiwan. In this case, if a Taiwan resident is purchasing a USD $2000 or higher piece of music equipment (which I’m not, let alone pay $3000 for a $2000 item) it becomes cost effect to buy a round trip ticket to the U.S., purchase it there, and get a free trip out of the deal. I’m mystified.

2

The US benefits from economy of scale. The size of shipments made to Taiwan are so small that basically each shipment costs a bundle to arrange.

There are also quite hefty customs duties on many electronics goods… sometimes as high as 20%.

3

This is a common situation for any electronic equipment. You won’t get much for near the price you could get in the US.

4

Yup, I’ve experienced this in the past with many things. The US has a bigger market, which means they can offer lower prices. It’s funny when I hear friends back home saying how it must be great living in Taiwan where EVERYTHING is CHEAP! Yeah, right…

5

Imported cars in Taiwan are almost double what they cost in their home countries ! In Taiwan imported has always meant more expensive.

6

I think it’s economy of scale and the US seems to have lower import taxes. As most people in business know it’s easier to negotiate a discount when you purchase a bigger volume.

7

That isn’t a general rule. Generally they can be around 20% more expensive if form Europe, not including some sports and executive saloon models. It’s true that some used cars can be more expensive, but that is dictated by condition and availability.

8

The golf gti is a couple of grand cheaper over here than it is in the uk, we are talking like £3000ish saving… pretty good deal.
Its not the only car either, the Porsche cayenne diesel is also a couple of grand cheaper here too.

9

Thats news to me. In 2005 I got the 1.8T A4 quattro , it was 35,000 over here while my cousin bought the same car but front wheel drive in taiwan for nearly double.

I nearly fell over. It certainly is not worth 70k USD.

Glad to hear prices have become more reasonable. Still doesnt mean “affordable” necessarily but moving in the right direction.

10

I’ve found that almost all electronics are cheaper in the US. Sometimes even cheaper in Singapore or Hong Kong. So I buy them there unless too large to carry… like the Yamaha PSR-S910 keyboard I bought recently for approximately NT$50000/US$1700 and have seen it priced in the US from $1550 to $2300.

It’s all about volume, economy of sale, turnover…

11

[quote=“tommy525”]Thats news to me. In 2005 I got the 1.8T A4 quattro , it was 35,000 over here while my cousin bought the same car but front wheel drive in taiwan for nearly double.

I nearly fell over. It certainly is not worth 70k USD.

Glad to hear prices have become more reasonable. Still doesnt mean “affordable” necessarily but moving in the right direction.[/quote]

No not all, audis, bmws are still insanely overpriced.
Even the base golfs are overpriced, its just that the GTI and cayenne diesel happen to be of a higher spec over here which works out a few K cheaper.

But not compared to america, the states is really cheap compared to almost everywhere in the world, im comparing to the uk and europe here.