Does employing smart pricing strategies impact cross border price manipulation of the tools?

“Price differentiation of tools in different countries has been a debatable topic for a long time.”

Working as a professional craftsman or an amateur handyman, the quality of work depends upon the right tools. As time changes, technologies get advanced, and with emerging technology modern tools and equipment gets much better. But the question that must have knocked the minds of most professionals is why the price of tools shows variation across borders? Sometimes people import products to get a cheaper price, so is there any way to create equality in the pricing of tools and other products cross-border?

Power tools have been a great support to manual labour as it provides an additional power source to any hand tool. Professionals like craftsmen have been using such power tools to reduce their workforce but to increase their work quality. But there has been a huge debate on the pricing of such tools, it is noticed that the pricing of these tools differs with the change in the country.

For starters let’s talk about power tools like Sander tools, Drills, and Saws. Talking about these tools is due to their price differentiation across borders. The price of a sander varies from 43 euros to 575 euros in France, in the United States, it ranges from 30 dollars to 674 dollars, whereas moving to other countries like the UK it manages to stay from 30 pounds to 556 pounds.

The same goes for drills and saws, their price also differs with the change of borders. The 123bricolage already published a research paper mentioning the issues of price differentiation of tools in different countries.

Why does it happen? Who are the ones trying to manipulate the price of tools and other products? There can a lot of reasons that impact the pricing. The economic theory suggests that the price of one commodity must be the same for every country but assuming such a thing to happen on the ground can be a debating issue.

It’s not just the buyers or sellers who manipulate the price, the presence of transportation cost, identical exchange rates, legal restrictions, government taxes according to the country, legal restrictions, labour cost, production cost, and many other reasons are also related in creating a price difference of any product or tool.

Perceived values and market structure also share an equal hold in price changes of tools. The value of a product depends upon its ability to offer benefits and meet the needs and expectations of its customers. If the customer is willing to pay the mentioned price for a product then it will stay the same.

But the problem is not everyone is willing to pay the same. So, suppliers need to accumulate the data of their targeted customers to manage the pricing to meet the level of their customer needs and willingness to pay.

One option to create equality in the pricing of products can is by offering price personalization but no surety forming such decisions will allow retailers and sellers to achieve their profits.

“Price is what you pay. Value is what you get.” Optimizing this quote, in reality, can be a lot different than it looks.


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