Saturday, June 27, 2009

Shopping for gadgets on a global market: a reflection on the price of the iPhone 3GS

By Benedict Wee

Our world has grown significantly smaller since the amazing military invention; the internets was brought to the public. In our current age we are communicating with people all over the globe and we never run out of people to talk to since someone, somewhere has just gotten up and logged on. News isn't something we get from a rolled up paper on our lawn in the morning or a show we watch at 6 pm anymore. We get information almost instantly when a major celebrity passes away, when a serious sounding virus spreads and when a communist country decides to be a jerk and test nuclear weapons.

Aside from the heavy/important stuff, we also have up to date information on things that we're interested in. Like knowing when a movie adaptation of a beloved childhood cartoon about vehicles and robots sucks so bad you might want to block out that 2 1/2 hours from your memory or when french rugby people lie about getting hurt on the street and then come out with some convoluted story that makes as much sense as aforementioned movie. Or weather.

My intrests are gadgets and videogames.

I like to know when new stuff about them is announced, its price and its availability. It's good to know what technological advancements the rest of the world is getting and if you're on the short end of the stick. The best bit about the internets are that not only do you know if you're at a disadvantage, you could be pro-active about it and change your circumstance. Like say if videogames are out in the US and won't reach our shores till over a year later (hello Final Fantasy XII) I could just purchase an american set and have the games sent to me when they are released.

The fact is our shrunken world brings people together faster which makes us want to have the same stuff at the same time. To be held back even for a month means that you're likely to miss out on the newer stuff people are getting (choughhtcmagicchough). Everyone is aware of who gets what and how much they're being charged and in our current economy, they do not want to pay boatloads when they can get the same thing for cheap out there. One of the other great features of the internet is that you're not confined to what is being sold at a mall. Shopping, like chatting, can be done 24/7 and there are great deals floating out there somewhere if you're willing to look. Let me provide an example: The iPhone 3GS (3GS for short).

Ooooh.. shiny..

Vodafone has just released the price of their phone here in New Zealand and it's pretty expensive. Instead of just giving in and shelling out the extra $200-$250 more than I was expecting to pay for the 3GS I decided to venture online to check if I could get a better deal since unlocking the iPhone is an easy task these days with simple video tutorials on YouTube (another fabulous feature of the internet). The first place I checked was ebay.

Now online auctions aren't alien to me. I used to do them quite a bit when I was a penniless student looking to score some dvds and videogames for cheap back in the day and I helped some of my mates in the UK to get cheap used iPhones last year, taking advantage of the new iPhone 3G launch. With the knowledge of how auctions worked I went online to take a gander at auctions on the phone specifically in the US since they were the first to get it (and because the exchange rate is lower than it has been for awhile).

What I found was a pretty good deal. I sampled the market to see how much both the 16GB and 32GB models were going online by putting multiple auctions on my watchlist and letting them end. In addition to that I calculated the shipping costs of the phone to New Zealand, first from the US Post Office, then the available quotes from the sellers themselves. The price from the Post Office:
  • Express Mail - US$32.50 (US$29.90 for online orders) taking 6 days to deliver
  • Priority Mail - US$26.50 (US$25.18 for online orders) taking 6-10 days to deliver

The quotes from the sellers were between US$30 and US$35.

From a sample of 6 16GB 3GSs I found that the prices the phones were sold for ranged from US$590-US$721. From a sample of 5 32GB 3GSs the price were between US$672-US$931 (the highest price included free next-day express delivery). This meant that the cheapest price I could get the iPhones from the past two days in the US were:
  • 16GB: US$590+US$25.20= US$615.20 (approx. NZ$953.56)
  • 32GB: US$672+US$25.20=US$697.20 (approx. NZ$1080.66)
Of course I do not expect to get the same price for the phone in my bidding but it was a mark to which I could start estimating how much I should expect to pay. One of the rules in auctions is to give yourself a gauge of how much you're willing to fork out. I'd give myself until NZ$1000 for the 16GB and NZ$1150 for the 32GB. That is still NZ$179 and NZ$229 lesser than what Vodafone is asking for which is a huge saving. There are other rules I should bear in mind too.
  • Always check the ratings of the sellers: This is very important, making sure the phone I'm bidding for is sold by a reputable person. I'll check his ratings and take time to read the feedback left by people he's sold stuff to. It's easy to spot the scammers as they've got low ratings and the same people leave feedback on his profile. I usually go for people with a rating of 250 or more and I prefer a Power Seller status which means he's a trusted vendor.
  • Ask questions: Also important. Finding out if the person selling the phone is willing to send it overseas and getting a rapport going with him. If he is willing to ship I will ask about the cost so I can always mentally insert it into the total price of the mobile when I'm bidding. If I really want a great deal, I'll offer him shipping alternatives that I've researched on. The US Post Office's online postal order for Priority Mail is US$25.18 and if he is willing to use that service I'll save around NZ$7.50-NZ$15 which could make a big difference when I'm bidding on the phone.
  • Expand your range: I do not focus only on one auction and put a couple on my watchlist. That way even if I do not win the phone I can gauge how much it's being sold for in that time period and if it's a good time to be looking for the phone as I will elaborate below.
  • Time and space: I usually look at US sites to get my mobile as they've got more sellers there. I also take into consideration the time zone difference and the weeks' schedule and plan accordingly. My sample size was taken across the weekend which meant that more people could be biding on the auction so a good day to look for a phone might be at the start of the week and the lowest price on the 16GB 3GS was sold at 5am US Pacific Time which meant that not a lot of people were up at that time to bid and that's why it was sold for cheap. Taking such things into consideration does help improve your chances on scoring a good deal.
  • Other stuff: The usual things to know are not placing a bid too early (I usually place my highest in the last 30 seconds) and not going over your intended price you're willing to pay. Knowing this I always give myself a generous yet sensible maximum price bid.
  • Finally, be patient and have fun: If I was not used to bidding for an item, it might take some time to get the mobile and it could get frustrating but I'll always remember to enjoy the adrenalin rush that comes from competing for an item and the satisfaction I'd get when I've gotten the phone for cheap.
By the powers of ebay. He has the powerrrrrr!

The world is full of opportunities and thanks to the internets, they are not only full but overflowing. Shopping for gadgets at great deals has never been this easy and anyone can do it. You don't need to be a gadget lover to be able to get such stuff for cheap, all you need is a bit of effort. Thanks to the web we can finally break free from the tyranny of companies that think that they can overcharge us because we live in one corner of the world and we can send a message out to them that we won't stand being taken advantage of. And who knows, maybe they'll listen.

Forex Rate: US$1 = NZ$1.55


  1. Extremely useful post Benedict. I was shopping around for an iPhone yesterday and was pretty gutted at the prices available to me. It's great to see you highlighting some of the alternatives, I knew they were out there but you've essentially done all the work for me.


  2. No worries Paul. Just remember to always ask questions and sample the market if you wanna get the phone from ebay.

    And if it's too good to be true, it probably is. Don't get something that's priced very low and understand that patience is key. Have fun shopping!