Brazil’s high operating costs

In the WSJ, an article on Forever 21‘s new stores, In Brazil, the Long Wait for Fast Fashion, highlights some of the issues business has to deal with (emphasis added):

Keeping prices low has been a challenge for most retailers because operating costs in Brazil are high. Apparel vendors in Brazil pay an estimated 35% in taxes on their products, compared with about 8% in the U.S., according to Alexis Frick, a São Paulo-based analyst for market researcher Euromonitor International. Retailers that ship their products in from abroad pay as much as a 35% in addition to those taxes in import taxes.

Take a look:

Price Check

Comparing prices in the U.S. versus Brazil for select items. These are website prices as of March 17.

Items U.S. price Brazil price
Mizuno New Prophecy 3 $210 $426
Mac lipstick $16 $28
Unlocked iPhone 5S (16 GB) $650 $1,190

When a friend from Brazil told me my Kitchenaid mixer (that retails for $250 on Amazon) sells in Brazil for US$1,000+, I asked that he take it when he went back, sell it, and we split the profit.

He already had bought one for himself, otherwise I would have sold him mine.

The Economist did a price comparison on Latin America iPhonomics.

Linked by Dustbury. Thanks!


2 Responses to “Brazil’s high operating costs”

  1. » Kind of a losing proposition Says:

    […] Which explains how this happened to Fausta: […]

  2. The disgraced OAS Carnival of Latin America and the Caribbean | Fausta's Blog Says:

    […] Brazil’s high operating costs […]