Let’s discuss pricing, why I choose to price my build videos in US$ and why prices fluctuate.
In "normal times", in the UK we expect to broadly pay £ to $ pricing on Tech. Although the exchange rate (August 2020) is cUS$1.25 to £1.00 as a rule if the new Apple iPhone is released at US$1500 in the States it will be £1500 in the UK. This follows through for most tech including PC parts (and yes, we are bitter about it, but it's primarily due to different import and sales taxes etc).
The US is the dominant comparator currency throughout the world, everyone knows what their country’s exchange rate is with the US$. It therefore makes sense to quote prices in US$ for YouTube videos in order to appeal internationally and provide prices in a currency that allows all viewers to understand the price for them.
When I priced my most recent New PC parts build I ensured that the budget I had set (a $500 Budget – don’t get me started on the incorrect use of “Budget” to mean “Cheap”!!) was attainable in both the UK and US for the components I included. So, full transparency here is the US PC Part Picker list on the day I ordered components in the UK:
So, a smidgen over $500 on that day. 10 days later, on the day I planned to publish my video the price was $70 higher – a c15% increase in 10 days, making it a $600 build! Three reasons:
The Ryzen 3 3100, which has an RRP of US$99, is in short supply in the States (not in the UK, where it has stayed stable at c£95 (US$120) for a month or so) and had increased from $110 to $149!
PSU prices seem extortionate in the US at present -try getting an 80+ Bronze PSU for less than $60; and
Cases at the lower price points also seem to be in short supply – there are plenty of Micro ATC cases available in the UK for c£25, nothing now in the US for less than $40.
At this time there are obvious issue with supply on several PC components, this leads to demand driven inflation (price increases) which will vary significantly across regions for different components. The odd thing with PC component pricing is it seems to respond very quickly to supply and demand fluctuations in a way that most consumer electronics don’t – it seems more akin to commodity trading that normal profit margins on goods.
You wouldn’t expect to see the price of a new TV jump by $15% in 10 days or be 50% higher than the RRP. In the majority of consumer good scenarios most of us would simply opt for a very similar product at the original price – but this is not something you can easily do with some PC components.
The Ryzen 3 3100 is in demand because it is new, represents good value (price to performance) and because the platform you build with today will support the next generation of AMD processors, something that the obvious Intel alternative at the same price point doesn’t provide. Once supply is exhausted from usual retailers we are left with profiteers and exponential price increases follow.
PSU and Case price increases are due to an overall shortage across the board. These products are linked to our TV point above – you’d have to be a massive fanboy to not buy the Corsair equivalent of an overpriced EVGA PSU. Once manufacturing has recovered, I would expect to see a move back to more stable and lower prices sometime in 2021.
Does this make my claim of a $500 PC Build spurious? Well, no for two reasons: on the day of ordering this was correctly priced and achievable and, in the future, as supply returns, prices will fall back to this point.
So, how should YouTubers look to ensure we are pricing accurately and guide consumers to get the best value? A few points to keep in mind when purchasing:
As a YouTuber I will ensure I monitor pricing and hold supporting information that the price I quote is, or at least was, accurate.
It can be useful to purchase your items ad hoc, when you see a good price on an item purchase it and monitor other products until they also fall in price. This works well if you are not in a rush to put your new PC together
PC Part Picker is a good start, but you can find products cheaper by expanding your search – do check retailer sites for deals and bundle deals. Also being aware that delivery charges might not always apply if you are buying more than one component from a supplier, so look at price pre- and post-delivery charges.
If you can wait do, after an initial demand surge prices do normally return to RRP and then fall again once newer products are released. So be flexible with your components where you can – accepting that products like the Ryzen 3 3100 are going to be popular.
I hope this sets out my position, what I do to ensure accuracy in my Build videos and provides some useful pointers for buying components. Pricing, Budgets, VfM and how to compare for vale are areas I will return to in future blogs and videos.
And although I use US$ for pricing I'll continue to spell colour with a U!
Until the next one – Go Well!
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