Should You Get Your iPhone XS Overseas Or In Singapore?
Have you ever wanted to buy something while travelling overseas to bring it back to Singapore to resell them to earn the difference (even if it isn’t much)? I know I do.
I was in Melbourne, Australia last year when Nintendo Switch was released, it was selling about $80 cheaper than it was in Singapore. Wanted to make that quick buck but in the end, I couldn’t bear to part with A$300++, that’s a lot of money for me!
But it got me thinking, why is it cheaper in Australia than it is in Singapore for that same product? And why doesn’t the law of one price that I’ve learned in Economics class doesn’t hold?
Should iPhone XS in Singapore priced the same in the US?
Law of One Price – What is the Law of One Price?
In short, (in economic theory) a product will have the same price tag after converting them to the same currency. The Law of One Price is another way of interpreting the concept of purchasing power parity (PPP).
Purchasing Power Parity? Law of One Price? Does it all suddenly sound like you are reading off Introduction to Economics slides from your lecture?
All these are in economic theory, the real question is: in this day and age where the internet is prevalent, is the internet quick enough to not allow us to take advantage of this arbitrage?
Does the Law of One Price Really Hold?
Every year, the Economist has been tracking McDonald’s Big Mac burger prices in different countries to test purchasing power parity called the Big Mac Index. The way Big Mac is priced in a particular country has quite a say about the country’s wealth.
Let’s do our own rendition of the Big Mac Index using something that most of us hold dear to our hands – our iPhones.
iPhone XS Index by Seedly
With that, this is the iPhone XS Index by Seedly – we will use the prices available for the latest iPhone X on Apple Online Store.
iPhone XS Prices In Countries Around The World
|Country||Price of iPhone XS|
in their own currency
|Price of iPhone XS|
in Singapore Dollars
|Price Difference from Singapore|
|Japan||￥112, 788||1,381||$268 cheaper|
|Hong Kong||HK$8,599||1,502||$147 cheaper|
|China||T.B.C.||1,738||$89 more expensive|
|UK||£999||1,787||$138 more expensive|
|Italy||€1187.77||1,905||$256 more expensive|
*Prices of iPhone X is converted to SGD via Google on 14 September 2018. If Tax is added upon checkout, it may not be reflected above.
To illustrate PPP better, the current exchange rate is USD/SGD 1.37 (1 USD = 1.37 SGD).
In the US
- Price of iPhone XS = US$999
[Converting USD into SGD]
- Price of iPhone XS = S$1,369.85
(Assuming purchasing power parity holds)
Sadly, it doesn’t.
The price of iPhone XS in Singapore is S$1,649 which is S$279 MORE EXPENSIVE. Shook.
You Can Earn the Difference
This means that it is possible to buy an iPhone XS in the US and sell here in Singapore and make the difference of S$279. After tax, which varies from state to state, would probably only amount up to around S$179 in savings!
- How often do we get to travel or have friends that travel to the US?
- How easy is it to get a buyer that would buy the iPhone XS that you are selling?
There are a lot of variables that would come into play when trying to earn this small arbitrage, like courier charges!
With that, I hope you get your opportunity to earn an extra income from the price difference in different countries! If you would like to read on any tips and tricks on personal finance, do check out our blog!
Check out this question: Currently I’m using a Macbook, and I’ve been using iPhone for the past 7 years. Is it worth switching out now that iPhones are so expensive? Is it hard to switch over? What should I switch to?
Share with us your experience in the link above if you were ever in that situation and what did you do!
I’ll see you in the next one!