Why aren’t New Zealanders angry about Adobe overcharging?

Australia’s federal government held an inquiry into price gouging from international technology companies. In New Zealand we do nothing.

It seems we’re more inclined to grin and bear overcharging. Or are we?

Like New Zealanders, Australians pay as much as 50 percent more than Americans to buy the same tech products even after taking GST into account.

Limited justification

There’s some limited justification for paying extra for hardware products. Our retailers buy in smaller quantities so lose economies of scale. Lower sales mean overheads per sold item are higher.

Freighting stuff to far-flung towns adds a few percent to prices. And our tougher consumer protection laws give us better rights to return shonky products than most Americans enjoy.

Added together these might conceivably make our hardware prices 10% or so higher than US prices.

Software greed

But there’s no justification whatsoever when software companies charge us more for downloaded goods. None whatsoever. Does it costs a software company anything more to shovel its bits and bytes across the Pacific than to send them down the road to an address in California.

Likewise support is often international and experiences shows there’s no correlation between the amount one pays for software and the quality of after sales support.

If there is an additional cost it will be one or two cents – less than a rounding error even for smartphone apps which can sell for a dollar or two. For full-blown software suites selling for upwards of $100, those charges won’t even register.

Adobe taking advantage

Adobe sells its software online in New Zealand with prices in Australian dollars. As Lifehacker’s Angus Kidman points out in Adobe Still Overcharging Australians these prices are 33% higher than US prices.

New Zealand companies wanting Adobe’s professional design products like InDesign and Photoshop have no choice. There are no practical no-compromise alternatives for either application. My guess is consumers vote with their feet and either go without, make do with an alternative or simply use a pirated copy. Personally, I use vastly outdated versions of the core applications.

So why aren’t we as angry as Australians about overcharging? My guess is part of the explanation is because we’re more used to being at the end of the queue in the eyes of international companies. We’ve found coping mechanisms. And those who are truly angry are probably doing something about it, something that isn’t legal.

4 thoughts on “Why aren’t New Zealanders angry about Adobe overcharging?

  1. I have been told the price differential is because of the cost of providing a local presence of some sort. This might be true of a large company like Adobe or Apple, who both have local (Australian) offices, but obviously not for smaller companies. On the other hand, smaller software companies often do not charge a premium for overseas purchasers.

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    • That would be acceptable if there was a New Zealand office servicing the needs of local users. I suspect the local offices are mainly about sales, so charging for an office is like making a customer pay for a shop.

      Apple is an interesting exception here. Most Apple hardware products sell in New Zealand for close to their US price – the margins are reasonable considering freight and local storage. Adobe on the other hand sells through a wire or fibre. What does that extra 30 to 40% pay for? Sales people?

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  2. Hmm. So, corrupt behaviour leads to illegal activity. Who’d a thought that? On the other hand, we live under a regime where market forces prevail. Put another way, you charge the maximum you can while still clearing the market. Those without an alternative get screwed, perfect market-led behaviour

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  3. Pingback: How Apple keeps the bastards honest on tablet prices | Bill Bennett

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