CPU/Mobo Pricing in India

M

myth

Disciple
Dear Gigabyte,

First off, I'm a big fan! :D Love your products and the way you handle RMA.

What I wanted to ask you is this:- What all comes into play when you are deciding upon the retail price of a particular product when you launch it in India?

What is of particular interest to me is the price difference between products in India and those in USA/Canada/Hong Kong.

Example:- Gigabyte GA-P67A-UD4
I checked the buyers list from this particular page. Found SMC, which sells the board in delhi at a price of Rs.12,600/-
TechShop.in sells it at Rs.12,609/-

While the same board sells at 179.99 CAD at NCIX and at $189.99 on Newegg. Both these prices come out to Rs.8413.49 and Rs.8450.76 respectively.

If I am correct, the boards are manufactured either in Taiwan or China.

I tried looking up import duty for USA and India.
Here is the USITC website with updated Tariff.(Enter the number 84733020 to get the rates for motherboards.)
USITC DataWeb: USITC Tariff Database

Here is an Indian Tariff website with updated rates.
Indian Customs Duty, Import Duty of 84733020 - Motherboards

Taiwan is part of the Normal Trade Relations agreement therefore enjoys 0% import duty to the US.

Alas India has no such agreement with Taiwan and the import duty comes to roughly 15% or so. The actual formula is pretty long and can be accessed here alongwith a calculator.
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What still stands out is the Rs.4000/- price difference. The particular board in question could be priced around Rs.9600-9700 but the current price difference befuddles me.

Please clarify.

Thanks.:D
 
Vendor->wholesaler->reseller->dealer margins....

Also, these motherboards probably sell in the thousands in the US whereas in India the sales wont be that high, so dealers will always keep higher margins...
 
I agree, but isn't SMC getting the products directly from Gigabyte? I'm asking this cause I came across the recommended dealers list from Gigabyte on the forums.

I wish to know if there would be a way to circumvent the chain and get products directly from Gigabyte sans the middlemen.
 
Gigabyte has offices in India. So the question of shipping to Taiwan doesn't arise. The stores don't ship to Taiwan either, they ship it to Gigabyte RMA in India.

Speaking on a broader plane, all products arrive via some distributor or the other. And it is to these distributors that one ships the product unless the product was sourced from another country directly. The dealers do the same. They do not undertake any extra burden of shipping it out of the country. At most the heaviest item would be a cabinet which might weight in at 11kgs. So that's a 100 bucks by train and then local courier. To ship anything across India, it would take an approximate max of 500 bucks. Premium couriers charge the extra bomb.

What I'd like is for Gigabyte to have an online store giving customers the oppurtunity to get the products directly rather than going through Tom, Dick and Harry who each charge an extra buck.
 
Hi, thanks, for your feedback, and we appreciate your point of view and concern. However, in India the dollar rate comes to about Rs. 54, since all Mobos are imported by air, plus you have to take into account Insurance and Freight charges.
 
Hi,

Thanks for the reply, couldn't get back to this thread earlier as I had some out-station work.

Would you be kind enough to list which Freight company you use so I may get a quote from them. I'm not going to assume anything but are you implying that when the products are shipped to the US the 'Insurance' and 'Freight' charges are not applicable? I'd like to know why shipping to India is higher than shipping half-way across the globe to the US. Also the Dollar comes down to Rs.44.98 on the day you wrote the post.

Regards,
 
1. No matter where something is made, it needs to go first to USA and then starts shipping to different countries, in case of US brands.

2. US retailers like Newegg buy huge quantities at a time, as much or more than India's nationwide distributers. So they can afford to work with smaller margins.

3. In USA, it is like Gigabyte - Newegg - Customer. In India it is Gigabyte - Distributer - Wholesale Shop - Dealer / Dealer-Agent - Customer

So the already higher price has people with more margins and each margin is also more.

4. So in all 3 points, the margin is more.

5. The price isn't more expensive for everything. HDDs for instance are similarly priced, GPUs aren't that much more expensive either, at least at release. After that Indian prices don't fall but US prices crumble, hence the difference.

CPUs for example are priced nearly the same.

6. Import duties and shipping as explained above

7. Again, lower sales and hence explained above.

8. And the prices are often not that much different, for US MSRP x 50-55 you get it in India. Making buying from abroad useless many times!
 
dude not entirely correct.. gpu are priced very far apart but if u add shipping and customs it is comparable to indian prices. RAM is priced very less there compared to India. only AMD proccy's are priced very competitively here as they have development units in India. Intel also has a difference. Gigabyte must make conscious efforts for good distribution channels. this will decrease the cost per unit if u dont have to search helter skelter for these products or further choose distribution partners with extensive network in our country.

and its not 50-55 per dollar. its more in the range of 58-60 per dollar.
 
Then why are you only specific to gigabyte alone? This question needs to be answered by all I'national brands.

India is tax base custom duty levying country, not to forget the current petrol prices shooting up like never before.:mad:

So whatever costs less out there will have to be bought for more here.
 
Core i7 2600k is like $330 or so. Don't take the cheapest price, take the MSRP or amazon price. In India it is like 16k, less than 50 a dollar.

For GPUs take MSRP and it is like 50 a dollar.
 
FYI, MSRP = Maximum Suggested Retail Price.
It is NOT binding on anyone. A retailer is free to sell products for more than the MSRP if they desire to do so.

The 2600k Has been selling for 290-300/- for quite some time now.
 
Instead of engaging a huge chain of middle-men why can't Gigabyte open up an online portal to sell their products? They already have a diverse range, handle their own RMA(thank heavens for that!) and have 18 regional offices throughout India. All that's left is to get a working website and a backend in place and a contract with a courier company. The profit margin would be much higher compared to what they get at the moment.
 
Yes gigabyte has fans over here but availability is very low.

For eg, graphics cards are not available in most online shops like SMC, ITWARES, etc.

Even the two online retailers they have listed on their site- The ITdepot and Techshop.in dont have a single GIGABYTE GPU for sale. Even though they have lots of other much lesser known brands. Most of their indian distributor companies listed on their website dont list gigabyte products or their affiliation. Devrajcomputers, priya, etc. have no mention of their link with Gigabyte. Definitely more needs to be done.
 
I know what MSRP is. But Indian prices are more often than not determined by US MSRP rather than street price. Newegg price for 4850 will probably be like $50-70 or so now, but Indian pricing is more dependent on their MSRP.
 
sadly the indian online market is not mature not large enough, similarly the logistics issues are huge ( anybody care to pay the visit to the courier feedback thread?) that most manufacturers are just not willing to take the risk of going that way, and even if they do, they dont want to piss off their channel partners. Even dell which runs an online only business had to set up brick and mortar stores here in india. The high prices here are only indicative of the cost of doing business in india, and the low volumes.
 
Its like a chicken or egg problem..
I am definetly sure that if they had their prices more in line with the us prices then they would sell more products but until they reduce their prices most customers would lik give them the miss. And so they cant reduce their prices until they more volume sales
 
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