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Comment by AnthonyMouse | Hacker News Reader

> Most goods sold around the world aren't priced in relation to what it costs to make them, they're priced based on what a given market will pay for them.

Is there some reason this isn't a large arbitrage opportunity? Why isn't Walmart buying Macbooks by the pallet in NYC to sell in Australia?

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You have to pay customs duties when you import goods. Compliance with this is very high.

Technically, when you buy a product out of state you are expected to pay use tax when you come home. Compliance with this is very low.

So, for a business, there is no arbitrage opportunity.

What duties would Walmart be paying that Apple wouldn’t?

Based on my extensive 5 minutes of googling... There are many methods used to evaluate the value of goods used to determine customs duties. There are rules around which methods you are allowed to use. Presumably Apple is able to pay duties on the cost they pay to Foxconn which is substantially lower than the retail price. If Walmart had to instead pay duties on their actual cost i.e. US retail, that would be substantially higher. It appears that some methods (Transaction Value Of Identical Goods, Transaction Value Of Similar Goods, Computed Method Of Valuation) could allow Walmart to pay lower duties than their cost of goods, but I'm not a customs attorney so I don't know if they are applicable.

They would pay the same duties, which is why there wouldn't be an arbitrage opportunity

Some people did this for textbooks importing from asian countries like india where a book was sold for $5 compared to $100+ in the US. They were sued by the us publishers irc

Because we don't have Walmart in Australia :^)

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