In general; a $2 cup of coffee in north america costs 2€ in Europe. A $300 Wii U in north america costs 300€ in Europe. The only time currency conversion matters is because you are converting between two currencies, when buying a product from another country.
GOG.com sells all their games in north american prices because it only has offices in north america. You are buying a product from north america when you buy from them. Dropbox, Steam, Nintendo, Sony all have offices in Europe. So you aren't buying a foreign product and you do not account for a currency conversion as there isn't one.
Taxes are an important consideration. For example if you buy a $500 cell phone from north america and have it shipped to Europe. You will pay less for the phone but when it crosses the border you pay considerable taxes such that the "deal" is no longer worth it.
If import taxes were applied to physical as well as digital goods, as they probably should be, you would actively want to buy from a European company within Europe. You currently do for most goods, because it actually saves you money.
It's the lag on charging tax for imported digital goods. Otherwise you are earning Euros you are spending Euros, there is no currency conversion.
> A $300 Wii U in north america costs 300€ in Europe.
Which is exactly the problem considering the Euro is 30% stronger than the dollar right now. It's also wrong, the $300 Wii U[0] is 275€[1], which is roughly correct ($300 + 20% french VAT is 274€)
> GOG.com sells all their games in north american prices because it only has offices in north america. You are buying a product from north america in that case.
GOG.com sells in local currency.
> For example if you buy a $500 cell phone from north america and have it shipped to Europe. You will pay less for the phone but when it crosses the border you pay considerable taxes such that the "deal" is no longer worth it.
Mobile phones are duty-free under CCT (the common customs tariff), so you only pay the local VAT which is 15~25%. Given the phone is probably marked up 30~40% compared to the US, the deal is most definitely worth it, even paying the VAT.
Yes, kind of, but not really. The problem right now is that €1 is worth $1.3. In Europe VAT is included and is about 20% in most countries (it does vary), in US it's not.
So, a service that costs €1 in Europe, gets the provider €0.8, or $1.05. Import tax is generally the same as VAT as far as I know. Sales tax in the US is usually around 7% -> to a consumer, a $1 service costs $1.07.
This means that if you import a $1 thing from the US to Europe, and don't have to pay shipping, you are saving some 13% of the price as the consumer, and the seller gets 5% less money than the equivalent price in European currency.
That is today. The difference varies, I've seen as high as 1.5 dollar per euro.
This explains why everyone is suddenly asking me to bring them iPads and Macbooks and whatnots because I'm coming back from the US in a month.
It's the lag on charging tax for imported digital goods.
We do in the UK, if you're a VAT-registered business.
For example, let's say my business pays $100/month for Web hosting in the US (or even the £40/month I pay to Adobe for Creative Cloud). I then have to "reverse charge" $20 of VAT to my accounts but then also claim back $20 of VAT from the tax authorities.. so it's a net zero result, but we still "paid" it.
I don't believe this applies to regular citizens though, but I could be wrong.. if it does, I know no-one who does it.
There are a handful of things like videogames where that's true as part of the region-based market segmentation, but I haven't found it to be true in general. Cloud services in particular are usually priced so that the dollar and Euro prices are approximate conversions of each other. Look at, say, the $ vs € pricing for Azure, or for OVH.
Do not buy GSM stuff blindly in the US, some phones might not be used in some countries. The iPhones have different part numbers and different frequency ranges depending on the country.
If you are in Europe I recommend hubiC instead of Dropbox. They are much cheaper and have servers in Europe (France - they are child company of OVH). Dropbox only has servers in America [1], so its slower.
- 25GB free
- 100GB 1€/m
- 10TB 10€/m
Yes you read that right, its TEN TIMES the space of Dropbox Pro, for the same price.
Im not affiliated or anything, just a satisfied customer.
I considered hubiC, but all download syncs (from the website and application) for now are limited to 10mbit (even from the UK). There are several posts complaining about this on hubiC's forums.
If you don't care about this, it's a really great deal, but to me it is a deal breaker.
Dropbox uses Amazon S3, therefore servers are located in Europe as well.
EDIT: maybe my statement was a bit premature. I was confident Amazon was keeping mirrors, but it seems they only do this in the same region. Dropbox runs its own infrastructure network and uses AWS for storing files, both solely in the US.
Do you know if they offer 2 factor authentication? I've been so annoyed with Dropbox support for the past 2 months I'm actively looking for a replacement, but it needs to have 2 factor auth.
hubic syncs to my pc everything uploaded to it. assuming I have 10tb of files hosted on it, does it mean I need 10tb of hard disk space to keep them synced? kinda defeats the purpose of having so much storage online..
Even for cloud-based services like dropbox, the cost of doing business in all countries is not the same. There are different laws/regulations to deal with, costs for having foreign-language support people, costs for internationalizing parts of the UI/etc.
Personally, I think it's kind of odd to expect that something will cost the exact same amount anywhere in the world.
It might be that the added cost for dropbox to do business in Europe just happens to be very close to the exchange rate, so they just change the currency symbol and call it "close enough".
There are plenty of things that are more expensive in the US than they are in Europe.
Products are not priced by cost. They are priced at the highest point the market will tolerate.
Moreover, a European employee is generally way cheaper than an American one, the corporate tax is often cheaper, if they were really driven by costs, they would simply have relocated (at least outside of Silicon Valley).
The simple fact of operating from California means they don't care about operating costs.
The problem isn't just paying more. I'm aware of how tax-heavy europe is, and how much harder it is to support the wide variety of languages and laws. In most cases, I would be fine paying a bit more for a service.
The problem is the way the mark-up happens. They're not calculating the difference and marking that up, they're literally just equating US dollars with euros. $99 and €99 might sound similar, but the difference is over 30%. There is no way the additional support costs run that high, so it comes across as just an attempt to pull a fast one on europeans.
I'm sure if they did a proper calculation and gave a realistic number, nobody would complain about the increased cost.
Yeah I hate it when I have to pay more for a service as a European.
It might seem silly but that's the reason I cancelled my Spotify account, I didn't want to pay a 'European' premium. I hate it when they check from which country your creditcard number is - Netflix is nice that they allow you to register in a different country with a VPN & don't check the credit card country.
Same concept. You can't have the price of good fluctuating all the time in Europe because the relationship between the dollar and euro have changed. They fix the price, it accounts for VAT and sometimes a little more, sometimes a little less.
In Dropbox example both include VAT. You can see this tendency clearly in digital games. When I worked with games pricing for MacOS, I asked why such a huge difference? Boss replied: "It is the easiest to force Europeans into premium costs".
There is even a chrome extension which shows how much a game costs in different countries on Steam website:
Buy Sid Meier's Civilization V
US: $29.99 (18.04 GBP)
RU: 249 pуб. (4.01 GBP) (78% )
CIS: $14.99 USD (9.02 GBP) (50% )
BR: R$ 44,99 (12.11 GBP) (33% )
UK: £19.99 (11% )
EU: 29,99€ (23.7 GBP) (31% )
AU: $69.99 USD (42.11 GBP) (133% )
-----
Also not long time ago there was an article about Spotify pricing [1]. It simply is a many years ongoing Europe rip-off.
Usually a little more, so those Macbooks are actually about 10% more expensive than in the US once you account for VAT, but it's not unusual for the exchange rate to vary by up to 10% in any given 12 month period.
Most goods are typically more expensive in Europe than in the US for all kinds of structural reasons. Transport costs are higher, labor costs are higher, power and real estate costs are higher. It just costs more to do business over here. The first time I went to the states I was shocked at how cheap _everything_ seemed to be.
> They fix the price, it accounts for VAT and sometimes a little more, sometimes a little less.
Never seen less, always seen more. Significantly more. Take the top-of-the-line MBP without options, 2500€ is $3286, the german VAT is 19%. So a VAT-including US price would be $2975. There's a 10% ($311) surcharge for living in Germany.
All companies of a reasonable size deal with fluctuating exchange rates by hedging on the currency futures market. It's what those markets are for, and it works very well.
I call it the "Apple pricing",where 1$ == 1€ .Why do businesses do that ? I'm pretty sure they'd ajust their pricing if 1€<1$.
I get that one needs to adjust with local regulations,the cost doing business,localisation,... but still 1$ != 1€. (a few years ago, 1€ ~= 1.50$ , so much that people just flew to USA to buy expensive Apple gear,and it was still cheaper than paying the € price).
I was going to sign up for this on Friday, but it makes you buy a minimum of 5 licenses, so the lowest monthly payment is $75. I thought that was pretty lame so I started looking for something else. I tried ownCloud but it was not very happy with my PHP configuration so I quit that and ended up using Synology's Cloud Station and port-forwarding it. Costs $0 extra to me since I already have a Synology NAS, local storage, easy configuration that doesn't interfere with any existing services, and clients for mobile, Mac, and Linux (GUI only unfortunately).
All of that would've been avoided if I could've just paid Dropbox $30/mo, but I guess I'm glad they priced themselves out by trying to force me to pay for 3 users that I'm not going to have for a long time.
Not unique to Dropbox but most software. This is why I have various Apple IDs. I purchase most, if not all, of the apps via the US iTunes store with my US Apple ID, given that many devs stills use $4.99 = €4.99.
I only use a non-US Apple ID to download region specific apps: banking, local TV apps, etc.
Or it could just be a standard pricing trick where you let the customer think they're getting a great deal by "working the system" when it's actually what you intended them to do all along.
Dan Ariely has some good examples of this in his talks/books.
That's a possibility, but it has to be weighed against the ill-will you generate among the customers who realize that they are given/have been paying a higher price.
This article is a perfect example. It certainly doesn't boost my opinion of dropbox.
I remember when Steam did this back in the day (not sure if it still happens today) and it was a total shame. Lots of people using proxies to get US pricing on the other side of the pond. Now, I don't really know how the whole taxing thing moves about, but, are foreign customers forced to pay taxes for these kinds of products since they're considered 'imported'? Or maybe, do companies feel they should get more money to keep operating abroad? I'm just trying to look for possible explanations, but we all know this is just a cheeky, greedy play from these companies.
The thing i love about Dropbox is that the more i use it the more extra space and "gigas"...they give me. As an early and heavy user (i've invited 20 friends or more so far) they want me happy and i can feel it. that's what i love. They are not charging me for anything,and they won't try it. they know what type of user i am (a happy user that invites all of its friends) so they treat me like the user i am. I am sure my extra space is billed on any friend i've invited to the platform..
"... for $99/year (or $9,99/month), which is a pretty good deal (Google Drive 1TB also costs $9,99/year). "
Should it say "/month" on Google Drive as well? Because otherwise, if those prices are correct then Google Drive is a lot cheaper, but the article implies that it has the same price.
It’s funny this is mentioned because just today I found out that the conversion rates at Asos.com from pound to euro are off by 12%. They calculate the conversion dividing by 0.70 instead of 0.79. So basically everyone buying products with prices based in euro is been ripped-off.
Europe tax is real with every product. Like I was going to buy Lenovo laptop for work, but as soon as I said that I was from EU the price almost doubled.
[+] [-] Kequc|11 years ago|reply
GOG.com sells all their games in north american prices because it only has offices in north america. You are buying a product from north america when you buy from them. Dropbox, Steam, Nintendo, Sony all have offices in Europe. So you aren't buying a foreign product and you do not account for a currency conversion as there isn't one.
Taxes are an important consideration. For example if you buy a $500 cell phone from north america and have it shipped to Europe. You will pay less for the phone but when it crosses the border you pay considerable taxes such that the "deal" is no longer worth it.
If import taxes were applied to physical as well as digital goods, as they probably should be, you would actively want to buy from a European company within Europe. You currently do for most goods, because it actually saves you money.
It's the lag on charging tax for imported digital goods. Otherwise you are earning Euros you are spending Euros, there is no currency conversion.
[+] [-] masklinn|11 years ago|reply
Which is exactly the problem considering the Euro is 30% stronger than the dollar right now. It's also wrong, the $300 Wii U[0] is 275€[1], which is roughly correct ($300 + 20% french VAT is 274€)
[0] http://www.amazon.com/Nintendo-Wii-Mario-Luigi-Deluxe-U/dp/B...
[1] http://www.amazon.fr/Console-Nintendo-noire-Mario-Kart/dp/B0...
> GOG.com sells all their games in north american prices because it only has offices in north america. You are buying a product from north america in that case.
GOG.com sells in local currency.
> For example if you buy a $500 cell phone from north america and have it shipped to Europe. You will pay less for the phone but when it crosses the border you pay considerable taxes such that the "deal" is no longer worth it.
Mobile phones are duty-free under CCT (the common customs tariff), so you only pay the local VAT which is 15~25%. Given the phone is probably marked up 30~40% compared to the US, the deal is most definitely worth it, even paying the VAT.
[+] [-] klausa|11 years ago|reply
They also price their stuff in EUR, have offices in Poland and the company is registered on Cyprus.
[+] [-] Swizec|11 years ago|reply
So, a service that costs €1 in Europe, gets the provider €0.8, or $1.05. Import tax is generally the same as VAT as far as I know. Sales tax in the US is usually around 7% -> to a consumer, a $1 service costs $1.07.
This means that if you import a $1 thing from the US to Europe, and don't have to pay shipping, you are saving some 13% of the price as the consumer, and the seller gets 5% less money than the equivalent price in European currency.
That is today. The difference varies, I've seen as high as 1.5 dollar per euro.
This explains why everyone is suddenly asking me to bring them iPads and Macbooks and whatnots because I'm coming back from the US in a month.
[+] [-] petercooper|11 years ago|reply
We do in the UK, if you're a VAT-registered business.
For example, let's say my business pays $100/month for Web hosting in the US (or even the £40/month I pay to Adobe for Creative Cloud). I then have to "reverse charge" $20 of VAT to my accounts but then also claim back $20 of VAT from the tax authorities.. so it's a net zero result, but we still "paid" it.
I don't believe this applies to regular citizens though, but I could be wrong.. if it does, I know no-one who does it.
[+] [-] nicky0|11 years ago|reply
I don't get what you are saying. Do you think that the number will always be 300 everywhere. 300 Yen, 300 pounds?
[+] [-] _delirium|11 years ago|reply
[+] [-] nraynaud|11 years ago|reply
[+] [-] gadders|11 years ago|reply
[+] [-] dreen|11 years ago|reply
- 25GB free
- 100GB 1€/m
- 10TB 10€/m
Yes you read that right, its TEN TIMES the space of Dropbox Pro, for the same price.
Im not affiliated or anything, just a satisfied customer.
[1] - https://www.dropbox.com/help/7
[+] [-] zschallz|11 years ago|reply
If you don't care about this, it's a really great deal, but to me it is a deal breaker.
[+] [-] rootinier|11 years ago|reply
EDIT: maybe my statement was a bit premature. I was confident Amazon was keeping mirrors, but it seems they only do this in the same region. Dropbox runs its own infrastructure network and uses AWS for storing files, both solely in the US.
[+] [-] coldtea|11 years ago|reply
Yeah, but what I want from a cloud store is convenience and long term prospects.
1) Do they have deep integration with iOS/Android apps the way Dropbox has?
2) Will they be around in 5 years?
[+] [-] reitoei|11 years ago|reply
Edit: My mistake https://forums.hubic.com/showthread.php?272-hubiC-for-Linux-...!
[+] [-] nemesisj|11 years ago|reply
[+] [-] kyriakos|11 years ago|reply
[+] [-] kyriakos|11 years ago|reply
[+] [-] deciplex|11 years ago|reply
[+] [-] brk|11 years ago|reply
Personally, I think it's kind of odd to expect that something will cost the exact same amount anywhere in the world.
It might be that the added cost for dropbox to do business in Europe just happens to be very close to the exchange rate, so they just change the currency symbol and call it "close enough".
There are plenty of things that are more expensive in the US than they are in Europe.
[+] [-] nraynaud|11 years ago|reply
[+] [-] chton|11 years ago|reply
The problem is the way the mark-up happens. They're not calculating the difference and marking that up, they're literally just equating US dollars with euros. $99 and €99 might sound similar, but the difference is over 30%. There is no way the additional support costs run that high, so it comes across as just an attempt to pull a fast one on europeans.
I'm sure if they did a proper calculation and gave a realistic number, nobody would complain about the increased cost.
[+] [-] kekub|11 years ago|reply
Apple lets me pay 699 Euro (http://store.apple.com/de/buy-iphone/iphone5s) in Germany vs 649$ (http://store.apple.com/us/buy-iphone/iphone5s) in the US.
[+] [-] jvandenbroeck|11 years ago|reply
It might seem silly but that's the reason I cancelled my Spotify account, I didn't want to pay a 'European' premium. I hate it when they check from which country your creditcard number is - Netflix is nice that they allow you to register in a different country with a VPN & don't check the credit card country.
[+] [-] nly|11 years ago|reply
[+] [-] kloktier|11 years ago|reply
vs.
http://store.apple.com/de/buy-mac/macbook-pro
Same concept. You can't have the price of good fluctuating all the time in Europe because the relationship between the dollar and euro have changed. They fix the price, it accounts for VAT and sometimes a little more, sometimes a little less.
[+] [-] alandarev|11 years ago|reply
In Dropbox example both include VAT. You can see this tendency clearly in digital games. When I worked with games pricing for MacOS, I asked why such a huge difference? Boss replied: "It is the easiest to force Europeans into premium costs".
There is even a chrome extension which shows how much a game costs in different countries on Steam website:
Buy Sid Meier's Civilization V
US: $29.99 (18.04 GBP)
RU: 249 pуб. (4.01 GBP) (78% )
CIS: $14.99 USD (9.02 GBP) (50% )
BR: R$ 44,99 (12.11 GBP) (33% )
UK: £19.99 (11% )
EU: 29,99€ (23.7 GBP) (31% )
AU: $69.99 USD (42.11 GBP) (133% )
-----
Also not long time ago there was an article about Spotify pricing [1]. It simply is a many years ongoing Europe rip-off.
[1] - http://mts.io/projects/spotify-pricing/
[+] [-] blowski|11 years ago|reply
The Euro has never gone below $1.17, and has averaged at around $1.32 since Dropbox launched in 2008.
> it accounts for VAT
Dropbox don't pay VAT in the EU. https://www.dropbox.com/help/971
[+] [-] simonh|11 years ago|reply
Most goods are typically more expensive in Europe than in the US for all kinds of structural reasons. Transport costs are higher, labor costs are higher, power and real estate costs are higher. It just costs more to do business over here. The first time I went to the states I was shocked at how cheap _everything_ seemed to be.
[+] [-] masklinn|11 years ago|reply
Never seen less, always seen more. Significantly more. Take the top-of-the-line MBP without options, 2500€ is $3286, the german VAT is 19%. So a VAT-including US price would be $2975. There's a 10% ($311) surcharge for living in Germany.
[+] [-] rfrey|11 years ago|reply
[+] [-] unknown|11 years ago|reply
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[+] [-] bittugill|11 years ago|reply
[+] [-] bittugill|11 years ago|reply
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[+] [-] aikah|11 years ago|reply
I get that one needs to adjust with local regulations,the cost doing business,localisation,... but still 1$ != 1€. (a few years ago, 1€ ~= 1.50$ , so much that people just flew to USA to buy expensive Apple gear,and it was still cheaper than paying the € price).
[+] [-] cookiecaper|11 years ago|reply
All of that would've been avoided if I could've just paid Dropbox $30/mo, but I guess I'm glad they priced themselves out by trying to force me to pay for 3 users that I'm not going to have for a long time.
[+] [-] mongemalo|11 years ago|reply
Nothing will replace my Synology and the amount of services it gives me.
I already have two that backup each other. Best purchase of the year :)
[+] [-] antr|11 years ago|reply
I only use a non-US Apple ID to download region specific apps: banking, local TV apps, etc.
[+] [-] adwf|11 years ago|reply
Dan Ariely has some good examples of this in his talks/books.
[+] [-] Drakim|11 years ago|reply
This article is a perfect example. It certainly doesn't boost my opinion of dropbox.
[+] [-] jonifico|11 years ago|reply
[+] [-] ferrullan|11 years ago|reply
[+] [-] Drakim|11 years ago|reply
Should it say "/month" on Google Drive as well? Because otherwise, if those prices are correct then Google Drive is a lot cheaper, but the article implies that it has the same price.
[+] [-] kgabis|11 years ago|reply
[+] [-] elorant|11 years ago|reply
[+] [-] martinald|11 years ago|reply
[+] [-] wastedhours|11 years ago|reply
[+] [-] Kudos|11 years ago|reply
[+] [-] Morphling|11 years ago|reply
[+] [-] Gonzih|11 years ago|reply
[+] [-] phonos|11 years ago|reply