Why does tech cost more in the UK?

By: John McGarvey

Date: 18 August 2014

Buying tech in the UK - credit card

Ever since the term 'rip-off Britain' gained popularity in the '90s, there's been a lingering suspicion that UK consumers and businesses pay over the odds for some items.

Now new research from Which? seems to suggest that the concept of rip-off Britain is still alive and well. The consumer organisation has found that UK buyers are paying considerably more for tech products than US consumers.

Comparing identical tech products

The Which? research compared the prices of identical tech products in the UK and US. It found UK consumers pay more virtually across the board. In some cases, price differences run into hundreds of pounds.

And not all of that difference is accounted for by UK VAT, which - at 20% - tends to be a higher than sales taxes in the US. The research examined tax-free prices, revealing stark differences.

Here are a few examples:

  • An Apple MacBook Pro 13” laptop costs £1,249 in the UK. But in the US, you'd pay around £1,055.
  • A 65” Samsung TV will set you back £2,749 in the UK. Across the pond, expect to pay £2,347 - around £400 less.
  • Adobe's Creative Cloud Suite - a must-have for design professionals - costs £469 a year in the UK. In the US, it's £355.

Richard Lloyd, executive director at Which?, is predictably frustrated by these pricing disparities:

“UK consumers are getting a raw deal by paying up to hundreds of pounds more for the same tech products on sale in the US. Manufacturers should play fair and explain why consumers are paying more for buying in the UK.”

What you can do to save money

Although this research confirms what many have long suspected, there's not much you can actually do about it if you're in the market for new technology.

When you run a business, there comes a time when you have to invest. At that point, the cost of not spending a bit of cash will almost certainly be greater than the cost of your new IT.

To cut costs, you can - of course - shop around. There are often considerable differences in prices between retailers.

And when you're buying software, consider whether there are any free alternatives to which you could switch. This strategy is particularly useful when looking for software you're only likely to use occasionally.

Total cost of ownership is what counts

But where business is concerned, it can be dangerous to focus on the sticker price above all else. Actually, you want to know the 'total cost of ownership' - TCO, for short.

This gives you some idea of what a piece of technology will cost you over its lifetime. So, if you're buying a laptop that you expect to last five years, the TCO includes what it will cost to buy, maintain and so on.

Gartner research suggests that 80% of IT costs occur after the initial purchase, demonstrating that TCO is the figure that really matters.

Printers are a great example of this. A basic laser printer could set you back £100. But if you're going to be spending £50 every time you need to replace the toner cartridge, what's most important is the price of the toner, not the price of the printer.

Sadly, there is no easy way to calculate TCO. It depends on what technology you're buying and how your business uses it.

And that's where our last piece of advice comes in: your choice of IT supplier is most important of all. If your company doesn't have IT expertise in-house, it's definitely worth finding a local supplier that does.

Yes, it will cost you a bit of money. But the investment could pay for itself many times over in terms of efficiency gains and effective technology use.

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