iPad is hot on eBay, but for how long?

Some number-crunching on pricing shows that it might not be worth auctioning off the device once it's available outside of the U.S.

Josh Lowensohn Former Senior Writer
Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house. Prior to joining CNET, Josh covered breaking video game news, as well as reviewing game software. His current console favorite is the Xbox 360.
Josh Lowensohn
6 min read

Last week I did the unthinkable. I sold my iPad on eBay.

Was it a case of buyer's remorse? There was some of that, sure. But more than anything it was due to Apple's returns and exchanges policy, which gives buyers two weeks (instead of the more typical 30 days) to change their mind. And if it's been opened, you have to pay a fairly standard 10 percent restocking fee, which for the iPad can range from $60 to $83, depending on what model you got.

To be fair, I knew about these limitations upfront. So, being out of the 14-day policy and not wanting to trek all the way out to an Apple store to sweet-talk a manager into breaking the rules to let me pay Apple $60 to trade up for a more expensive model (which was, and still is out of stock at the San Francisco store), I went with eBay instead.

In the spirit of spring cleaning, I had used the auction service the week prior to sell my aging iPhone 3G. It had a two-inch crack running up he back, as well as several scuffs--all things I had made mention and included photos of in the auction description. Amazingly, I sold it for just $30 less than I paid for it brand new, two years prior, so my hopes were high for breaking even, and possibly even making a small profit.

Sure enough, that turned out to be the case. In less than eight hours, my one-day auction had jumped from $100 to $500, and it closed at $600--which is the amount I had paid for the iPad before sales tax. I may have lost the $50 I had paid for California sales tax, but I would have had to pay Apple $10 more if I had gone through the standard return process (for which I was ineligible).

What really surprised me though, was how much interest I was getting from international buyers, folks who currently cannot get their hands on an iPad in their own country--at least until the end of the month. I got messages from people in Spain, Russia, the U.K., and Australia, all of whom said they would bid if I could just do international shipping. And this was just for a one-day auction; I imagine I'd get quite a few more if it had run longer.

In fact, a great number of eBay sellers are offering international shipping on iPads. According to numbers gathered by The New York Times this past weekend, some 65 percent of iPads sold on the auction site are ending up in the hands of buyers outside of the U.S. That's no small number, especially considering the Times says many of those are paying a premium, which in some cases could end up being a third the cost of the machine.

The hang-ups

So what's involved in selling something internationally? Paperwork for one. Sellers need to fill out customs forms that state the value of the item, which if its over $400 (which all iPad models are), requires a special sticker that can be a red flag for customs officials to give it a thorough inspection.

In England, for example, having your item searched by customs can result in value added tax (VAT) and a clearance fees. I know of this extra expense first hand after living in London for a year. I had received a DVD set of a TV show that had cost $45 back in the states. My parents had sent it to me as a gift (which is how it was marked on the customs form). But since its compared value to the same product in Great Britain was more than 40 pounds, I had to pay about $30 in VAT and handling charges just to pick it up from the post office. This was regardless of the fact that the DVDs were in a separate region.

Is it worth it for buyers to go through the hassle then? Apple would seemingly prefer that you didn't, based on what happened to blogger Protocol Snow. His efforts to bring fellow Web forum-goers a way to purchase the device, and cover the cost of international shipping and customs were shut down by his local Apple store after he had purchased just five units over the course of a few days.

He ended up being banned from ever purchasing an iPad from Apple's retail store. On top of this, it was costing him around $130 to $150 extra to cover the sales tax, shipping, insurance, and fees to PayPal. If you were selling through eBay, there would be a charge for the listing, and any reserve fees as well.

Regional differences

In terms of the price difference, buying off eBay can save international buyers some money, depending on where they are and how much they ended up paying. iPad prices across most of Europe are higher than they are in the U.S., which isn't unusual, but in most cases they're hardly enough to outweigh the expenses of shipping and possible customs duties that have to be paid.

As my CNET UK colleague Rory Reid wrote last week, the price difference between the U.K. and the U.S. version of the iPad can range anywhere from $37 to $44, depending on what model you get. But that's not the biggest mark-up. German buyers pay $1,044 for the top model, which costs around $909 including taxes back in the states.

For these markets where the mark-up is more than $100 (like in Germany), it makes some sense to go the eBay route, whereas those in the other countries will have less of a reason to want to import once the device is for sale there.

Japan is one region where eBay imports may continue to flourish after its official iPad launch later this month. PC World reports that Japan's 3G version of the iPad will be locked to carrier Softbank Mobile. This means buyers of the 3G model there will only be able to use it with that carrier's service. By comparison, iPad 3G models in other countries are unlocked and allow users to use the device with compatible micro-SIM cards.

Is it even worth it?

Whether the hoops of international commerce are worth jumping through is a question for both the buyer and the seller. If you're an eBay seller who is used to selling things internationally, now's the time to do so. As for whether that's still going to be the case when the iPad is released internationally, it's too early to tell. Just keep in mind what happened to the man who got banned from purchasing any more iPads from Apple's retail store after buying just five.

As for buyers, the reasons for or against an international purchase depend on where you are. If you're in Germany, it could make financial sense to import one if you get a deal, but less so if you end up paying retail or higher, then the shipping and import duties on top of that.

What may be the biggest reason for international buyers to snatch one up now, is of course, that they are early adopters. While logic would dictate that this is a silly practice, New York Times' Damon Darlin points out that the amount of impatience this group has ends up leaving late adopters with a better, and often less expensive product. The clear reason to buy for these folks is the same as it is with any other gadget. Having a crack at it before anyone else can be, for some (myself included), an intoxicating prospect--even at a mark-up.