The great Australian ripoff

Exchange rates not the only factor

James Murdoch, owner of Principal Computers in Hobart, believes prices overall are going down but a range of other factors complicate the issue.

"However, what we are seeing right now is an increase in the US dollar price of many computer goods as a result of reduced production of many products," he said.

"Good examples of this are DVD burners and RAM which have both doubled in price over the last few months because the manufacturers have cut back on supply due to the global financial crisis.

"So many things are coming down, such as laptops, software, CPUs, LCD screens, and pretty much everything that has a stable US dollar price.

"But some of the more commoditised products are more greatly affected by [supply and demand factors] than the swinging currency. For example, in the last two weeks, the wholesale price of 500 gigabyte and 1 terabyte hard drives has shot up about $20 due to a shortage."

Best to shop around

In the consumer space, online shopping has made it more difficult for Australian companies to hide behind exchange rates and other excuses.

As overseas e-tailers have aggressively targeted offshore customers, Australian consumers are increasingly spending with online stores in the US, Britain and elsewhere.

"It always pays consumers to shop around and that is certainly the case in the current environment when the Aussie dollar is favourable for purchasing imported goods and has risen markedly in a relatively short space of time," James said.

"Domestic vendors may be holding back on cutting prices while the stronger dollar is giving consumers purchasing power in foreign markets. But it is important to consider the full prices - taxes plus shipping - and make sure you are buying from reputable sites."

Figures provided by eBay Australia show how effective this can be, even when taking into account the additional shipping costs. For example, an Apple MacBook Pro is available for almost 28 percent less on eBay's British site than it is on eBay Australia, even with shipping costs factored in.

"We know a lot of people are looking for better value as a result of the global financial crisis, so we see them spending more time comparing prices, and that includes our US and UK sites," said an eBay spokesman.

"If you're getting a $400 discount buying it from the US or the UK, spending $30 on a local power supply isn't a big deal."

Support a bigger concern for business buyers

While shopping overseas might help save money for small items that can be used anywhere, larger business-related purchases such as networking equipment or servers are more difficult.

"Bigger items are a bit harder because the shipping costs start to become prohibitive and in some cases there are different standards overseas," said eBay's spokesman.

And while local businesses might be getting their cameras or smartphones overseas, there's little evidence they're importing larger, more serious equipment on the sly.

"No one's ever threatened to buy from overseas if we didn't drop the price," Gluckman said.

"Most people buy locally. It's all very well buying overseas but they're very aware of support.

"There's plenty of grey-market stuff - switches and things like that - you can get them cheaper than the list price, but then they're worried about support."

Technology analysts often point out that the upfront cost of the hardware or software is a small proportion of the total cost of owning a system. Most technology buyers are reluctant to acquire unsupported equipment, even if it saves money, said Gluckman.

But because the support is provided locally, the costs are not subject to currency fluctuations, he said: "The vendors won't change their prices on support contracts at all. They normally discount the hardware upfront but not the support."

A final factor to consider is timing.

"Bargain hunters are very aware of the vendors' quarterly and financial year end," Gluckman said. "The vendors are always under pressure to present their numbers end of the quarter or year, so now is a good time to get good deals.

"You can get a good 5-10 percent discount just by buying at the right time.

"A lot of customers are taking the opportunity now to do upgrades. We have definitely noticed a lot of them bringing projects forward."

Can you get it cheaper overseas?

Data compiled using Terapeak; date range 25 Aug-22 Nov 2009