Home > Focus on Japan 2006 > What Is With These Prices?

What Is With These Prices?

December 13th, 2006

I am currently looking at getting a new camcorder, but was discouraged in Japan as the cheapest acceptable model cost 50,000 yen (about $430). That made a $200~$250 repair of my old camera look like a possible alternative. But then I looked at prices in the U.S.; I had forgotten the usual divide in prices, and sure enough, acceptable camcorders start at around $220.

So, what the heck is with the price differential? Look at this camera: the JVC GR-D350, on sale at Amazon.com for $250, but the exact same model is sold at Yodobashi.com for ¥49,800 ($425), fully 70% more expensive than the same model on sale in America.

I noticed this effect long ago. On my first trip to Japan, I wanted to buy a Nikon SLR camera. Fortunately, I had priced them in San Jose before I went, and so realized that they were a lot cheaper in the U.S. My Canon S1-IS was priced at $320 in the U.S., and $510 in Japan (60% more expensive). Prices for Apple goods in Japan seem to be more moderately jacked up, only about 5~10% higher than U.S. prices. But most consumer electronics have this massive difference in cost between Japan and the U.S.

Anyone know why?

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  1. Tim Kane
    December 13th, 2006 at 14:57 | #1

    The same thing exist in Korea.

    Just this weekend a teacher was telling me, how she went to the United States last summer, and was surprised by how much cheaper things were in the U.S. (On top of that, Americans make more to boot…)

    I left my printers at home because I thought it would be cheaper to buy one then haul it with me. In the U.S. you can buy a Samsung laser printer for like $89. Here they cost almost twice that and the brand is local to Korea – I prefer laser black and white to jet with color. But in the U.S. you can now get color lasers for less than $400. Much less I think.

    In general I heard that Korea is cheaper than Japan, but prices here are still higher than in the U.S. for almost everything. But not all things. My hair cut is only $5 and the qualitative difference is marginal, and maybe better here.

    My guess is Korean’s buy less clothes, spend very little out of pocket money on health care, and maybe less for utilities and any labor intensive service, but still, some how have plenty of money for overpriced cars, cell phones, consumer electronics and what not and have fairly high rent. In short, I don’t know how they do it.

    Strickly service items appear to be cheaper here. But in local department stores, and especially better grocery stores, there are tons of people greeting and hawking you to buy certain products – trying to get you to buy their brand: not sales people but more like manufactures reps. Also, rather than give you a break on price, the milk company will take a small carton and strap it to the bigger carton to give you more product – the problem is, I buy skim milk (which cost more than regular milk and I pay more than double the U.S. price) and the added carton is regular milk – I don’t really want it.

    As an American, I see every non-productive employee as added cost to the final product I buy. I’m thinking I’d rather the soap or coffee I buy cost less, then to be greeted and encouraged by someone in the store representing a particular company’s brand. Everyone time I see one of these greeters the dollars signs of money wasted flash in my eyes, and I get a tad bit angry.

    Why not just lower the cost of the product instead of adding a small carton of milk to the bigger bottle (and all the packaging hassle involved) or having a greeter insult my intellegence by thinking his kind treatment of me while hawking their wares some how makes up for the high price I am paying?

    That’s it right there, I think. Americans, culturally, buy on price and don’t expect service – cost too much for one, and is usually not that good, for two. But in Korea, service is reletively cheaper to provide because labor cost are lower and so might be an easier way to move product off the shelf than giving the customer a cost break. And if the service is provided buy a women, and is a service other women consume, you can be sure of excellent quality of service.

    Korean society is a little like that of Lions. Women here are like superwomen – they do everything, cook, clean take care of grand parents, children, husband and work (all with little complaint and some times with a sense of joy) while the husband stands guard against theft and voilence against the family – meaning they do little, but get all the prestige. Women (as wives, or proto wives) here are the most able, extraordinary and intellegent beings I have ever seen called human. So if you get service from a women, its usually excellent, and if its a service that other women consume frequently because the level of service will be even better conducted as Women expect high service from women. From men, well, they don’t expect much.

    Back to the main topic, To lower cost means process reengineering which is very expsensive. So, its much cheaper to pay someone $20000 a year at the retail end to cajole customers then it is to dig down through one’s proces to lower cost to cajole customers.

    Still, I don’t think none of that explains why prices are higher on this end of the Pacific then on the other end. When I discovered this Blog, I was working for $75K a year + at a job in St. Louis, one of the lowest cost of living in the states. I did not truly realize how much better I had it then anyone else. I regret the loss of income and the increase in costs I have. But my job was boring, and this is much more exciting.

  2. December 13th, 2006 at 17:17 | #2

    I can’t say I know why the prices are different but one of the reasons I asked your dad to help me get my camera is that there were no decent starter digital cameras for less than $220 in Japan. The model he got for me was around $130-$150 in the States and an equivalent one here was 22,000-25,000 yen.

    All I can think of is that it has to do with the optics being produced more expensively inside Japan for domestic cameras or it’s simply charging more because they can (in an attempt perhaps to make back some of their research investment). When I was researching, I found that there was no such thing as a cheap camera in Japan unless it was a complete piece of trash.

  3. Bluebottle
    December 14th, 2006 at 15:28 | #3

    Admittedly, Yodobashi is one of the most expensive places you can get something from. Look on http://kakaku.com/ and the prices will be about 2/3 of the Yodobashi price. Sofmap and all the big retailers have exactly the same prices (maybe +/- 100 yen) for many cameras – you can’t win by shopping around from big retailers.

    I reckon it’s partly because of the huge costs of doing business here (Japan). Not only do you have the absurd numbers of retail staff, but also an enormous, employed-for-life bureaucracy. Then there’s the government bribes and influence peddling. On top of all that, I’m sure that there must be a good amount of price-fixing between the big boys.

  4. Paul
    December 17th, 2006 at 10:33 | #4

    I noticed something similar on my trip to China- items that were not labor-intensive, but instead were mostly technological… like cameras, or PDAs, or camcorders or computers… that kind of stuff wasn’t really much cheaper than it was in the USA.

    In fact, sometimes it was more expensive.

    But of course anything that involved lots of human labor was dirt-cheap in China. I got two carved jade dragons for about 13 bucks; here, a single one would run at LEAST 150 dollars.

    It just pays to shop around. If you’ve got someone that can box something up and send it to you, even better.

    Seattle, WA

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