Why dont certain items like video games and cars adjust to cost of living differences?

[miri]

I mean wages, rent, housing, restaurants, fast food, bars and other stuff is higher in higher cost of living places like California. Why are cars and video game systems and games and most electronics the same price nationally then?

 

[nakedfrog]

Because they're different than all that other stuff?

 

[rh71]

i've wondered this myself about video games... but not for cars... if you look at car prices (and performance you got from it) compared with what you get today, it can be argued that it is still accurate.

 

[MercenaryForHire]

Luxury goods.

- M4H

 

[miri]

Well car prices are mostly the same nationally, take Scion for example, the Scion TC is $16,465 everywhere including California.

 

[dullard]

Originally posted by: miri
I mean wages, rent, housing, restaurants, fast food, bars and other stuff is higher in higher cost of living places like California. Why are cars and video game systems and games and most electronics the same price nationally then?

Wages: Labor costs more
Rent: Supply and demand
Housing: Supply and demand
Restaurants: Labor costs more (restaurant expenses are significantly labor)
Fast food: Labor costs more (restaurant expenses are significantly labor)
Bars: Labor costs more
Other Stuff: Labor costs more

Electronics and nationally sold items: labor done overseas. It doesn't cost anything significantly more to sell in place A than in place B (a retail store has very little of its expenses as labor).

 

[OverVolt]

move to oklahoma.....


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...profit!?

 

[biostud]

becuase you can move the stuff around, ie different prices would just make people buy it some place where it was cheaper.

And then someone would make an internet shop shipping the stuff from where it was cheap, and then the prices would equalize.

 

[miri]

Electronics and nationally sold items: labor done over seas. It doesn't cost anything significantly more to sell in place A than in place B.

What about salesmen selling cars? What about the labor cost of stores like Bestbuy, Circuit City, EBgames and a bunch of other places.

What I mean is, the stores most likely have different labor costs depending on the state, but their prices are kept the same nationally. Does that mean these stores generate less profit?

 

[dullard]

Originally posted by: miri
What about salesmen selling cars? What about the labor cost of stores like Bestbuy, Circuit City, EBgames and a bunch of other places.

I'm just making up numbers, but these are probably typical.

Car
Dealer's cost: $20,000. Few days labor to sell it: $500. Overhead + Utilities + Ads + Etc: $500. Total: $21,000. Labor is 2.3% of the cost. Bumping up labor by 50% is insignificant. It'll raise the cost of the vehicle to $21250. A total increase of 1.1% in cost to the dealer.

Meal at typical restaurant
Raw materials: $3. Chef: $3. Waitress/Host: $1. Dishboy/busboy: $2. Bartender: $1. Total cost: $10. Labor is 70%. Bumping up labor cost by 50% is a huge impact. Now it would cost the owner $13.50 to make the same meal. It'll raise the restaurant owner's cost by 35%!

Most retail stores are similar - labor is a small fraction of the total cost, so when labor goes up the total cost doesn't go up much.

One other thing to think about though is that hte high cost of living areas are usually near ports. Thus they get many of their goods at the lowest possible shipping costs. In low cost of living areas, you have to pay for the shipment by truck (plus whatever it cost to ship to the original US port). This offsets the higher wages.

 

[puffpio]

Car prices are different regionally...I'm not talking about MSRP I'm talking about what you will actually get it for...for example..STi's are going for invoice in the northeast but no way in hell you can get it for invoice in southern California