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I'm looking at building my own PC. An Intel Core i7 960 3.2 Ghz is about £457 in the UK at various online retailers. In the US the price at newegg is $570 (this is about £380 at current exchange rates).

2 questions. 1) Why the difference (about 20%)? All I can think of is sales tax.

2) Am I right in assuming this is just a commodity part - if I ordered one from the US there is no reason it would be any different from one bought in the UK?

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The question is not subjective nor argumentative. EU residents suffer from a combination of economic consequences of political trade restrictions, sales tax, and commercial regional pricing. – PP. Mar 8 '10 at 13:54
@PP: Maybe subjective and argumentative is not the right reason, but it should be closed indeed. (If not "not computer related", it would be "too localised".) – fretje Mar 8 '10 at 15:22
This isn't subjective, it is possible to answer objectively (I've had 2 good answers) and it is definitely computer related, it affects everything in the UK. I would have thought homebuilding PCs is definitely within scope for superuser. I think those who have closed it have been harsh. – Nick Fortescue Mar 8 '10 at 16:27
While I see the point people voting to close have come from (the question is mainly economic in nature rather than technical and as currently worded is specific to one territory), at least the second part of the question is technical as it concerns expected equipment compatibility. Localisation shouldn't be too much of an issue either, if direct references to the UK and the US are removed the second part of the question is still valid (IMO): is a CPU bought in one territory likely to be compatible with kit bought in another? – David Spillett Mar 8 '10 at 19:47
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@Nick. This is not a discussion forum This is a Q&A site for computer hardware and software questions. How can asking why one country is more expensive then another not be subjective? If not subjective, it's to localised since it is only including the US vs the UK. Other then that it is not a computer problem if the hardware is expensive, nor is it a software problem for the same reason. These question are explicitly not allowed for that reason. It remains closed. – Diago Mar 8 '10 at 19:47
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closed as not constructive by heavyd, Diago Mar 8 '10 at 13:34

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2 Answers

up vote 4 down vote

The current VAT rate is 17.5%, close to the 20% you are seeing, so if that £457 you quote includes VAT (and the $ price also includes any relevant sales taxes) it would explain a large par of the difference.

Other reasons for US/UK price differences:

  1. Exchange rate fluctuations. Next week the changing relationship between the pound and the dollar might make the comparison close, or might swing the other way and make the UK price seem even more expensive. Companies that work predominantly in one currency may pad their product prices in other currencies to allow for this variation, so a drop in a currency's worth doesn't eat too far into their margins (or they may just sell in that one currency and let their customers, the retailers, deal with the variation - the retails are likely to deal with the possible variation by padding their margins a little too).

  2. Distribution costs, including import duties, and "economies of scale" - differences in market size and the cost to transporting items into the UK compared to the US could be part of the difference. If the company pays more to get their good to the local market then they will pass that cost onto the retailer who will pass it on to you.

  3. "What the market will bear". If companies can get away with charging extra, they will. Because they UK companies don't compete directly with US companies for most of their trade the price US retailers are charging usually does not have a significant direct impact on what price customers in the UK market will be willing to bear.

As for whether the US sourced CPU will work in the UK: it will, as motherboards and CPUs do not vary between countries (your PSU deals with translating your local power supply to the DC voltage and current requirements) and there is no other region locking on these parts either. But you might find any warranty you get on the part is not valid over here so there is that risk to consider. Also be aware that you might be charged import duty on the CPU - $500 is enough for customs to be interested, assuming it is properly declared of course.

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up vote 2 down vote

1) Yes, taxes (and most of the prices advertised in US are without tax included since it depends on the state it is sold in)

) Absolutely.

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I don't know about Customs in England, but for 2) be careful if you have it mailed. – harrymc Mar 8 '10 at 13:16
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2) Customs office can tax your individual US->UK shipment. – Tadeusz A. Kadłubowski Mar 8 '10 at 13:27
Product would still be the same. – Alexandre Nizoux Mar 8 '10 at 13:29
Very few computer parts are manufactured and costed in GBP. Most are done in USD, SK Won, JY etc. When the pound weakens on the international markets, the cost of computer parts in the UK goes up. Please note that computer parts are subject to import duty laws in the UK. Check these out beofer ordering from the US. HRMC get very annoyed with people who don't declare imports of this sort. I suspect that by the time you add import duty the costs may not be far different. Also note that if you order from the US the warranty may not be valid in the UK. – Wilf Mar 8 '10 at 13:36
In the UK you don't just get VAT added by customs when they intercept your mail! Oh no, that would be too easy. They whack on an inspection fee! That's a minimum of £15. It's not uncommon to pay additional charges and taxes of 50-100% when purchasing anything from the USA. However if you have a friend that buys you something in the USA then posts as a gift then in theory no taxes/charges apply. – PP. Mar 8 '10 at 13:56
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