The Australian e-tailer Kogan is profiting from Selling the iPhone 5 for $100 less than the Apple Store. The iPhone 5 is a grey import product from Hong Kong. Exchange rates, shipping rates and accessories have allowed Kogan to make a profit from the iPhone 5. As Australian consumers are eager to jump in line for the iPhone 5, Kogan will be the first non-Apple retailer to sell the iPhone 5.
Kogan will be selling all of the different models of the iPhone 5 outright. This means you can pre order whichever model, 16GB, 32 GB and 64 GB, of the iPhone 5 you want at a steeply discounted price.
So how does Kogan manage to sell the Iphone 5 for less than Apple itself!?
Price Comparison between Hong Kong and Australia
|Phone Model||Apple Hong Kong||Kogan Australia||Profit|
Does GST effect the price savings?
No, G.S.T is not charged as an extra for Apple Store and Kogan purchases.
Where are the savings made?
- Exchange Rate - Given that Kogan buys its products from Hong Kong and sells them in Australia they are taking advantage of exchange rate differences. The Australian dollar being so strong makes purchases in Hong Kong cheaper and therefore they are purchasing these products from Apple .
- Shipping and accessories make profit - When a customer buys from Kogan they are offered a range of accessories and this is where Kogan can make profits. There would be huge margins on the accessories and therefore Kogan would make extra profits.
Warranty is for 1 year with apple not Kogan
While Kogan offers up a 12-month warranty with any iPhone 5 shipped - “Kogan [...] agree to repair or replace the Kogan Product or Other Product (as the case may be) which it supplied to you at its own cost, in circumstances where the Product does not perform in accordance with Kogan's specifications during the Standard Warranty period of 12 months; or the applicable Extended Warranty period” - rest assured that the Apple Global 1-year-Limited-Warranty will also still apply - “Limited Warranty applies only to hardware products manufactured by or for Apple that can be identified by the “Apple” trademark, trade name, or logo affixed to them”, as stated by Apple’s T.O.S. Since the iPhone 5’s shipped by Kogan are official Apple products, produced by Apple and containing official Apple hardware, purchases made through the site will still have the Apple Limited Warranty attached to them, in addition to the Kogan warranty, although this warranty can be limited to the country of origin - in this case, you’d have to go to Hong Kong to claim on Apple’s warranty.
The iPhone 5 on sale at Kogan’s website is a “grey import product”. This term means that the iPhone 5 will be imported from another country without Apple’s permission. Kogan will be importing the device from Hong Kong and will then sell it online to Australians.
It’s a legal process that can save Australians loads of money, but it has its drawbacks too. One is that you’ll have to pay separately for shipping. That cost will set you back $19 AUD, meaning your net saving will still be $81 AUD overall compared to buying direct from Apple.
A lot of people don’t realise that the new iPhone actually comes in 9 different models - the three standard storage sizes and then each of those come with three different antenna models designed to work with different carriers. While Australia is set to work off the global GMS antenna model for our 4G LTE frequencies (the model that Kogan is selling), American iPhone 5s will need two separate models for their 4G bands.
Things to know when buying a grey product
When buying a grey import product, it’s vital to keep these sorts of limitations and regional locks in mind. Another would be adapters and chargers - a Hong Kong model of the iPhone 5 may require a separate conversion adapter to work with Australian electrical outlets.
Kogan Stock levels
Kogan will also be limited in terms of stock - Apple being the direct supplier naturally means that they will have a lot more product to sell than Kogan. If you’re looking to get your hands on the iPhone 5 as soon as it comes out, going through the Apple store direct might work out better for you, depending on how many of the iPhone 5 Kogan manages to get their hands on.