Ok, here's some common logic for ya, the Dollar hits a record low against the Euro, so Europeans can buy American brands for rock bottom prices, right? Wrong! Despite the greenbacks depreciation against it's European counterpart, people living in the Old World still also pay the ‘old' - very high price - for everything American!

The reasons, according to Max Kohnstamm from Adformatie, a Dutch Marketing Magazine?

1. European trade regulations prohibit parallel import to protect Brands, therefore European based (web) shops and retail stores are not allowed to import directly from the US.

2. European Value Added Tax (in some countries up to 20%), Import Taxes and Shipping Costs increase US Retail Value for each product.

3. Brands are making more money selling their products in Europe (and other parts of the World) then they do at home, so not really an incentive to lower the retail prices.

Of course this is pure price discrimination, but hey, it supports the US economy and the equity of US brands abroad so why would we care? Well, whenever there is a significant price difference between different markets there is an opportunity to make some money. So we think it's just a matter of time before some smart entrepreneur figures out some way around all those artificially imposed price barriers and hits this gold mine!

Consumers, both American and European of course accept price discrimination to a certain extent. For example, it makes sense that one pays a lower price for a Movie ticket during the day, while being charged a higher price for watching the same movie in the evening or in the weekend. Or that airline tickets are more expensive during holiday seasons than they are during the off-season. However these products, although identical, are not perceived as equal. During the day time, movie theaters are empty and the same applies for most planes on a typical Tuesday evening in January.

The question is of course, to what extent this also applies to Brand clothing and for example electronics, such as the Microsoft Xbox. So while being on a Dollar salary it might currently not be very appealing to book a European holiday and go bankrupt on food and hotels, it could be very rewarding to dive into this phenomenon a little more and identify those opportunities to get some valuable Euro's your way instead!

Let us know when you have come up with something, we might be interested :-)