
Weird pricing of Dropbox Pro - kgabis
https://gist.github.com/kgabis/d06211c29439ee01a5ab
======
Kequc
In general; a $2 cup of coffee in north america costs 2€ in Europe. A $300 Wii
U in north america costs 300€ in Europe. The only time currency conversion
matters is because you are converting between two currencies, when buying a
product from another country.

GOG.com sells all their games in north american prices because it only has
offices in north america. You are buying a product from north america when you
buy from them. Dropbox, Steam, Nintendo, Sony all have offices in Europe. So
you aren't buying a foreign product and you do not account for a currency
conversion as there isn't one.

Taxes are an important consideration. For example if you buy a $500 cell phone
from north america and have it shipped to Europe. You will pay less for the
phone but when it crosses the border you pay considerable taxes such that the
"deal" is no longer worth it.

If import taxes were applied to physical as well as digital goods, as they
probably should be, you would actively want to buy from a European company
within Europe. You currently do for most goods, because it actually saves you
money.

It's the lag on charging tax for imported digital goods. Otherwise you are
earning Euros you are spending Euros, there is no currency conversion.

~~~
nicky0
> A $300 Wii U in north america costs 300€ in Europe.

I don't get what you are saying. Do you think that the number will always be
300 everywhere. 300 Yen, 300 pounds?

~~~
simonh
No, he's saying what he's saying.

A $1300 Macbook costs £1,000 here in the UK which is roughly 30% more
expensive than a direct currency conversion would have you expect. If you take
that $1300 Macbook, add 30% and convert that to Euros it just happens to be
that it works out at about €1300 which is what they charge in Germany. Someone
posted about that here earlier.

Most of that 30% is due to VAT at around 20% for much of Europe, plus another
10%. It's that last 10% that's the real price difference of the goods.

Personally, I think the main cause of that is the generally higher cost of
doing business in Europe (UK included). Everything costs more here. Petrol
(Gas) and hence transport, wages, property, corporate tax rates, etc. It's
hard, if possible at all, to find anything that's cheaper over here and all of
that feeds in to the cost of doing business. The first time I visited the US I
was shocked at just how much cheaper _everything_ seemed to be. Frankly, I'm
surprised it's only another 10%.

~~~
PinguTS
You forgot, that all US prices are missing the sales tax. So, you are
comparing US prices without tax with your countries price including tax.

~~~
Igglyboo
In the US it is not common to show a price after sales tax, like it is in
Europe with VAT.

Also, not all states have the same amount of sales tax and some have no tax at
all. It would be impossible to show the prices with sales tax when there are
50 different states with differing sales tax laws.

~~~
dunmalg
> It would be impossible to show the prices with sales tax when there are 50
> different states with differing sales tax laws

Heck, the state level sales tax rates are even the easy part. Within states
there are counties which often levy additional sales tax, and then cities
within the counties do it as well. These county and municipal tax rates are
additionally often comprised of a variety of "temporary assessments" which
appear and expire seemingly at random. Knowing which rate is charged at a
given location devolves into a very difficult problem once you realize there's
no centralized address-to-jurisdiction database, nor a centralized
jurisdiction-to-tax-rate database.

------
dreen
If you are in Europe I recommend hubiC instead of Dropbox. They are much
cheaper and have servers in Europe (France - they are child company of OVH).
Dropbox only has servers in America [1], so its slower.

\- 25GB free

\- 100GB 1€/m

\- 10TB 10€/m

Yes you read that right, its TEN TIMES the space of Dropbox Pro, for the same
price.

Im not affiliated or anything, just a satisfied customer.

[1] - [https://www.dropbox.com/help/7](https://www.dropbox.com/help/7)

~~~
rootinier
Dropbox uses Amazon S3, therefore servers are located in Europe as well.

EDIT: maybe my statement was a bit premature. I was confident Amazon was
keeping mirrors, but it seems they only do this in the same region. Dropbox
runs its own infrastructure network and uses AWS for storing files, both
solely in the US.

~~~
zuck9
They don't use S3 now. That was way long ago.

Source:
[https://news.ycombinator.com/item?id=8233622](https://news.ycombinator.com/item?id=8233622)

~~~
rootinier
Sync a file via Dropbox and run lsof -i, and you get something like this:
ec2-54-221-232-10.compute-1.amazonaws.com:https

EDIT: it may be that they use EC2 for their infrastructure, but not for
actually storing files. But they still use AWS.

------
brk
Even for cloud-based services like dropbox, the cost of doing business in all
countries is not the same. There are different laws/regulations to deal with,
costs for having foreign-language support people, costs for internationalizing
parts of the UI/etc.

Personally, I think it's kind of odd to expect that something will cost the
exact same amount anywhere in the world.

It might be that the added cost for dropbox to do business in Europe just
happens to be very close to the exchange rate, so they just change the
currency symbol and call it "close enough".

There are plenty of things that are more expensive in the US than they are in
Europe.

~~~
chton
The problem isn't just paying more. I'm aware of how tax-heavy europe is, and
how much harder it is to support the wide variety of languages and laws. In
most cases, I would be fine paying a bit more for a service.

The problem is the way the mark-up happens. They're not calculating the
difference and marking that up, they're literally just equating US dollars
with euros. $99 and €99 might sound similar, but the difference is over 30%.
There is no way the additional support costs run that high, so it comes across
as just an attempt to pull a fast one on europeans.

I'm sure if they did a proper calculation and gave a realistic number, nobody
would complain about the increased cost.

~~~
sugerman
Who is to say they didn't do a "proper calculation" and result in something
close enough to €99 that they just rounded up/down to keep things consistent?

~~~
nraynaud
India as 37 languages and a mess of a country, I guess they are selling their
product for 150% of the American price there?

~~~
arjunnarayan
But many products are sold in India in English only. This is manifestly not
the case in Europe.

~~~
nraynaud
I'm perfectly ok to have an English only product with a 30% discount, but I
can't find the option. (That said, looking at the streets in Seattle, I'm not
trading my 20% VAT for potholes, crumbling sidewalks and aerial electric wires
in a storm prone region, thanks)

------
kekub
> I guess we should thank apple for not allowing different pricing in
> different regions.

Apple lets me pay 699 Euro ([http://store.apple.com/de/buy-
iphone/iphone5s](http://store.apple.com/de/buy-iphone/iphone5s)) in Germany vs
649$ ([http://store.apple.com/us/buy-
iphone/iphone5s](http://store.apple.com/us/buy-iphone/iphone5s)) in the US.

~~~
hbbio
Just a reminder in this case: EU prices include the VAT (near 20% in many
cases), while in the US the state tax (often 10%) is not included in public
prices.

~~~
masklinn
Except 1 EUR = 1.31 USD right now, so even with a 19% VAT, the EUR value
should be lower than USD: $649 + 19% VAT is 588€ not 699. 19% european
surcharge on top of the VAT.

~~~
Cthulhu_
How about import taxes then? I can imagine Apple is a US company and thus pays
either no or very little import tax when they get their shipments from the
production facilities in China, but to get it to Europe costs more money. I
can imagine. I know nothing.

~~~
masklinn
No import taxes on laptops or cell phones in the EU.

~~~
giovannibajo1
My hypothesis has always been that Apple charges the whole country-wide
infrastructure (retail, marketing, etc.) on products, while in US (where it
would be harder/impossible to split nation-wide efforts from world-wide
efforts) this is not being done.

This also accounts for different prices in different European countries; e.g.:
the cost of making business is very high in Italy (high salary taxes, high
network costs, impossible to fire/sack people, etc.) so they make their
products cost more in Italy to account for the additional costs of running
operations there.

~~~
masklinn
> My hypothesis has always been that Apple charges the whole country-wide
> infrastructure (retail, marketing, etc.) on products

There's no Apple retail or marketing in Belgium.

------
jvandenbroeck
Yeah I hate it when I have to pay more for a service as a European.

It might seem silly but that's the reason I cancelled my Spotify account, I
didn't want to pay a 'European' premium. I hate it when they check from which
country your creditcard number is - Netflix is nice that they allow you to
register in a different country with a VPN & don't check the credit card
country.

~~~
vacri
Don't move to Australia then. Software prices are routinely jacked up for us.
At least with conversion to the euro, there's a large amount of laziness in
it. With Australian software, we're often paying 50% more to double the price.
At one stage it was cheaper to buy Photoshop by flying across the Pacific
ocean, buying a copy in the US, and flying back to Australia.

~~~
maccard
Every time I see this I feel compelled to point out that Europe gets it worse
than you, despite your complaints.

Say 100 AUD for a game. That's roughly 70 euro (which is the cost of a new PS4
game in Ireland). The median household income in Australia is 66k (AUD) or
47000 euro. The only source I can find for a median income in ireland states
it at around 27000 euro. The purchasing power of an Australian in that case is
far higher than an Irish person for instance.

~~~
vacri
Median income isn't the whole story. _Disposable_ income is a better story
(particularly for entertainment), and Ireland in US$24k, Australia $31k. In
Germany (the most populous European country that no-one questions is in
Europe) it's US$30k. France is US$29.5k. (stats from OECD). Norway, with the
same size population as Ireland, is more than Australia at US$32k. Australia
isn't really as far ahead of Europe as you paint it. Picking one of the
poorest countries in Western Europe and using that as the baseline isn't
really playing fair.

These links have the country's median household disposable income listed in
the first paragraph.

    
    
      http://www.oecdbetterlifeindex.org/countries/ireland/
      http://www.oecdbetterlifeindex.org/countries/australia/
      http://www.oecdbetterlifeindex.org/countries/germany/
      http://www.oecdbetterlifeindex.org/countries/france/
      http://www.oecdbetterlifeindex.org/countries/fill-in-the-blank-here-or-just-click-on-a-flower/

------
nly
My heart bleeds for my continental cousins. Here in the UK it's been common to
see the old $/£ sign switcheroo for decades.

------
kloktier
[http://store.apple.com/us/buy-mac/macbook-pro](http://store.apple.com/us/buy-
mac/macbook-pro)

vs.

[http://store.apple.com/de/buy-mac/macbook-pro](http://store.apple.com/de/buy-
mac/macbook-pro)

Same concept. You can't have the price of good fluctuating all the time in
Europe because the relationship between the dollar and euro have changed. They
fix the price, it accounts for VAT and sometimes a little more, sometimes a
little less.

~~~
alandarev
No its not. One does not include VAT, other does.

In Dropbox example both include VAT. You can see this tendency clearly in
digital games. When I worked with games pricing for MacOS, I asked why such a
huge difference? Boss replied: "It is the easiest to force Europeans into
premium costs".

There is even a chrome extension which shows how much a game costs in
different countries on Steam website:

Buy Sid Meier's Civilization V

US: $29.99 (18.04 GBP)

RU: 249 pуб. (4.01 GBP) (78% )

CIS: $14.99 USD (9.02 GBP) (50% )

BR: R$ 44,99 (12.11 GBP) (33% )

UK: £19.99 (11% )

EU: 29,99€ (23.7 GBP) (31% )

AU: $69.99 USD (42.11 GBP) (133% )

\-----

Also not long time ago there was an article about Spotify pricing [1]. It
simply is a many years ongoing Europe rip-off.

[1] - [http://mts.io/projects/spotify-
pricing/](http://mts.io/projects/spotify-pricing/)

~~~
dspillett
For services like Spotify you do have to account for different delivery costs
they may have in Europe. Bandwidth is more expensive over here (partly because
it just is, and partly because in many places we are not as well served so it
is a more contended resource) which they will have to factor in.

There may be differing costs for payment processing too, and if they have any
sort of tech support and documentation there will be larger
internationalisation costs in Europe too.

These things are unlikely to explain all the difference (probably not even
close to half of it) but we need to consider these thing to make sure we are
being fair when shouting "rip off!".

~~~
vetinari
Bandwidth is cheaper in Europe. See the Cloudflare article recently.

Also, regarding i18n for Europe: most of the time, it is localized only for
FIGS (France, Italy, Germany, Spain). Other 20 or so (for EU, not Europe)
countries get shown a finger. So why should they pay for that?

~~~
dspillett
It would appear that my knowledge on relative bandwidth costs is either very
out of date (or was just plain wrong to start with)...

On internationalisation: fair point on those that don't get the effort, though
_some_ effort being made is better than none.

------
aikah
I call it the "Apple pricing",where 1$ == 1€ .Why do businesses do that ? I'm
pretty sure they'd ajust their pricing if 1€<1$.

I get that one needs to adjust with local regulations,the cost doing
business,localisation,... but still 1$ != 1€. (a few years ago, 1€ ~= 1.50$ ,
so much that people just flew to USA to buy expensive Apple gear,and it was
still cheaper than paying the € price).

~~~
doodyhead
Part of it is definitely that US prices are often listed exclusive of tax,
while EU prices are listed inclusive, which instantly adds 20-30%.

Granted, they still hike up the prices further in the EU and other markets,
Australia being the most egregious example.

------
cookiecaper
I was going to sign up for this on Friday, but it makes you buy a minimum of 5
licenses, so the lowest monthly payment is $75. I thought that was pretty lame
so I started looking for something else. I tried ownCloud but it was not very
happy with my PHP configuration so I quit that and ended up using Synology's
Cloud Station and port-forwarding it. Costs $0 extra to me since I already
have a Synology NAS, local storage, easy configuration that doesn't interfere
with any existing services, and clients for mobile, Mac, and Linux (GUI only
unfortunately).

All of that would've been avoided if I could've just paid Dropbox $30/mo, but
I guess I'm glad they priced themselves out by trying to force me to pay for 3
users that I'm not going to have for a long time.

~~~
mongemalo
This.

Nothing will replace my Synology and the amount of services it gives me.

I already have two that backup each other. Best purchase of the year :)

------
antr
Not unique to Dropbox but most software. This is why I have various Apple IDs.
I purchase most, if not all, of the apps via the US iTunes store with my US
Apple ID, given that many devs stills use $4.99 = €4.99.

I only use a non-US Apple ID to download region specific apps: banking, local
TV apps, etc.

------
adwf
Or it could just be a standard pricing trick where you let the customer think
they're getting a great deal by "working the system" when it's actually what
you intended them to do all along.

Dan Ariely has some good examples of this in his talks/books.

~~~
Drakim
That's a possibility, but it has to be weighed against the ill-will you
generate among the customers who realize that they are given/have been paying
a higher price.

This article is a perfect example. It certainly doesn't boost my opinion of
dropbox.

~~~
adwf
Very true. In this case I imagine it's just a VAT issue, it's usually included
in the price by default in the EU.

But whenever someone points out weird pricing and gets excited about a "great
deal!", I usually have to check and think - is it really weird? Or is this
entirely what is meant to happen?

~~~
vetinari
It is not a VAT issue. Not only is VAT about the half of the price difference,
but in addition, not everyone has to pay VAT. If you are private end-user,
sure, you have to. But if you are a company, even if a small one (like
startup, for example), you are surely registered VAT payer and you can get it
back. But the price doesn't say whether it includes VAT or not. If you are
purchasing outside of EEA, it usually does not.

------
jonifico
I remember when Steam did this back in the day (not sure if it still happens
today) and it was a total shame. Lots of people using proxies to get US
pricing on the other side of the pond. Now, I don't really know how the whole
taxing thing moves about, but, are foreign customers forced to pay taxes for
these kinds of products since they're considered 'imported'? Or maybe, do
companies feel they should get more money to keep operating abroad? I'm just
trying to look for possible explanations, but we all know this is just a
cheeky, greedy play from these companies.

------
ferrullan
The thing i love about Dropbox is that the more i use it the more extra space
and "gigas"...they give me. As an early and heavy user (i've invited 20
friends or more so far) they want me happy and i can feel it. that's what i
love. They are not charging me for anything,and they won't try it. they know
what type of user i am (a happy user that invites all of its friends) so they
treat me like the user i am. I am sure my extra space is billed on any friend
i've invited to the platform..

------
Drakim
"... for $99/year (or $9,99/month), which is a pretty good deal (Google Drive
1TB also costs $9,99/year). "

Should it say "/month" on Google Drive as well? Because otherwise, if those
prices are correct then Google Drive is a lot cheaper, but the article implies
that it has the same price.

~~~
kgabis
Fixed :)

------
elorant
It’s funny this is mentioned because just today I found out that the
conversion rates at Asos.com from pound to euro are off by 12%. They calculate
the conversion dividing by 0.70 instead of 0.79. So basically everyone buying
products with prices based in euro is been ripped-off.

~~~
chrisseaton
But there are no official exchange rates are there? So how can they be wrong?
You must mean they're not as favourable as that which other companies are
offering. In which case it's not a 'rip-off', it's just as good as deal as you
might like it to be.

~~~
zurn
Sure there are. Here's ECB's for example.
[https://www.ecb.europa.eu/stats/exchange/eurofxref/html/inde...](https://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html)

~~~
chrisseaton
That's just an observation of the exchange rate as it appears to be between
large banks. Nobody is required to offer it to you.

------
martinald
Can you see a reference to them charging VAT? If not, that's pretty ludicrous.

~~~
wastedhours
My first thought was this as well - we tend to list prices inc VAT in Europe,
but it's almost always without in the States, no?

~~~
virmundi
America doesn't have a VAT. Internet services seldom have any tax requirement
at all. Laws vary, but the onus is on the customer to pay local and state
taxes. There is federal sales tax at all.

~~~
JoeAltmaier
My buddy that sold books online had to calculate our own state's sales tax (by
county and city! yuck) because he has to report here. But if you were out of
state he didn't charge the sales tax. Its a broken system, very weird.

~~~
UrMomReadsHN
Individual states can't tax interstate commerce, that's the job of the feds.
Actually, they can if they have a presence in both states - they can only tax
a business that has a physical presence in that state. It isn't broken, it is
part of the [inferred] Constitution. The idea is to not place burdens on
interstate commerce. Without it the states would be free to give their state
preference in commerce - to tax commerce interstate at a high rate so nobody
wants to engage in interstate commerce.

[http://en.wikipedia.org/wiki/Dormant_Commerce_Clause](http://en.wikipedia.org/wiki/Dormant_Commerce_Clause)

"The central rationale for the rule against discrimination is to prohibit
state or municipal laws whose object is local economic protectionism, laws
that would excite those jealousies and retaliatory measures the Constitution
was designed to prevent"

~~~
JoeAltmaier
Sure that part is right. Its the part where he had to spend Saturday
calculating tax rates for every in-state purchase depending on address. That's
broken; it's part of why he gave up the business.

------
Morphling
Europe tax is real with every product. Like I was going to buy Lenovo laptop
for work, but as soon as I said that I was from EU the price almost doubled.

------
Gonzih
In Europe very small amount of companies does proper dollars -> euro
conversion. Most of the time they just change label.

------
phonos
just use VPN like hola.org to pay for dropbox and you're ok..

