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Korean Job Discussion Forums
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methdxman
Joined: 14 Sep 2010
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 Posted: Tue Apr 19, 2011 5:12 pm Post subject: |
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| Illysook wrote: |
| So far the discussion has centered on cars and electronics. The prices are ridiculous enough, but what I really don't understand is why low tech things like hairdryers cost so much more than they do back home. A curling iron that is probably 9.99 in the U.S. costs at least twenty or thirty bucks. |
It's due to scale. Korea has 50 million people and the US has 300 million.
Let's assume that both countries import all hair dryers from Chinese sellers. A company like Wal-Mart who will buy these hairdryers in HUGE quantities has tons of buying power and will get huge discounts, thus, hairdryers will almost always be cheaper in the U.S.
Korea, just because it has a smaller population, will have higher fluctuations in demand, less safety stock, and smaller bulk purchases. All of this means that the unit price on one hair dryer will be significantly higher.
Another factor is that U.S. has much more big-store competition, which further drives prices down. U.S. is the best place to buy most goods because of one thing: SCALE.
I might add that because of fierce competition in the U.S. that businesses are generallly really efficient so they have less fixed costs to cover. They can probably safely reduce margins on their products and offer products for much cheaper than in other countries. |
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madoka
Joined: 27 Mar 2008
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