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April 2008 editorial

Your Personal Globalisation

Writer: Hartmut Quaschik - TNT Germany

Big companies operating in international business are those we think of when the question arises who can benefit from globalisation.

In my view, it is also the individual who can take advantage of the benefits of globalisation. Since the internet has opened the streets of the global village, you and I can buy and sell goods all over the world. In 1998 I became an e-bay member, and I immediately bought interesting stuff from USA and Canada.

US products imported to Europe are about twice as expensive as in their country of origin. The reasons for this huge price difference are manifold: first the producers sell directly to the dealers in the USA, but when these goods are sold in Europe, they are first sold to the European importers, who themselves sell to the dealers. At each stage a profit margin is set. The importers have to pay import duties, as well as Value Added Tax varying from country to country. European VAT is a lot higher than US sales tax.

I quickly realized that the prices for used goods are considerably lower on US markets than on European markets. There seems to be a much higher depreciation of consumer goods in the USA. When a used Hifi item is worth about 50% of its original retail value after two years in Europe, it will be worth only 40% of its original value in the USA. So it makes sense to buy used US goods on the US second hand markets.. Of course, the risks of buying from abroad are to be considered, too.

The same might be true for used cars. A friend of mine seriously intended to buy a used Mercedes car from the USA. He explained his calculation like this:

I did the comparison myself: I searched the prices for a 2003 Mercedes SL 500 with less than 50,000 miles. German prices are about 45,000 EUR, while US prices are about 40,000 USD. One must add national transport and sea shipping – this is 1600 to 2000 USD depending on West coast or East cost -, import duties and VAT to that equation, and this adds up to 33,000 EUR in total at current exchange rate. I think, this is about 12’000 EUR profit, which may or may not cover the risks involved in this transaction, depending on how much daredevil you are. When I am talking about risks, I think of total loss of money. BTW, this research took me only 10 minutes, and the websites which helped were mobile.de, ebay.com and oanda.com. I took this car type just for comparison, because there are lots of offers available on the internet. In fact, my friend considered buying a 2002 Merc CL 55 AMG for 20,000 EUR in total.

The US is the homeland of Altec, VPI, Klipsch, JBL components. If you want to buy some of the cultish items those companies produced, it is worth having a sharp look at audiogon.com, ebay.com, and on the like. Last but not least, you can buy US books and LPs cheaper in US than in Europe, too. I am thinking of Impulse Jazz records especially. I remember that in Paris/France s/h record shops standard Impulse albums were around 50 DEM (25 EUR) in the mid 90ies, and those even not were US originals. Today, you can buy US Impulse albums on ebay.com from about 10 USD for rather common albums and reissues, prices rising up to more than 100 USD for some rare 70ies originals.

One of my latest international bargains was a DVD “21st Century Vinyl - Michael Fremer's Practical Guide”, which costs 17.95 USD plus 10 USD international shipping on US-Ebay. This sums up to 18 EUR in total, as there is no VAT or import duty on goods costing less than 22 EUR for commercial parcels resp. 45 EUR for private parcels. Important note: thanks to European legislation, this margin will be adjusted to 170 EUR at December 1st, 2008. BTW, the German price of exactly the same original US version is 39.50 EUR at a German online shop.

© Copyright 2008 Hartmut Quaschik - www.tnt-audio.com

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