Why a price gap exists
Buying on a vague sense that things are cheaper on holiday is how travellers overpay. A price gap is never mysterious: it comes from one of six mechanisms, sometimes two together, and which one is operating tells you two useful things — roughly how large the gap should be, and what will go wrong when you try to take the goods home.
The mechanisms also explain the exceptions. Exchange rates move domestically made goods and barely touch imports. Brand pricing means a label is cheapest in its home market and dearest where it is exotic. Secondhand depth is why Japan is the world's best used-goods market and why that advantage does not extend to anything new. Learn the six and you no longer need a list.
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01
Tariffs and indirect tax
Apparel, leather goods and footwear carry the heaviest import duties almost everywhere. Layer on the domestic consumption tax — 10% in Japan, roughly 20% VAT across the EU, 0% to over 10% in US sales tax depending on the state — and the same product becomes structurally more expensive in any market that stacks duty on top of domestic tax. This is why an imported handbag is dear in Japan and a domestically made knife is not.
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02
Regional brand pricing
The single biggest factor, and the most often missed. One brand runs different price ladders in different markets, deliberately. Polo Ralph Lauren is a US mall staple but sits in Japan as an imported label at a premium; Uniqlo is everyday clothing in Japan and a "Japanese design brand" abroad. The rule that falls out of this: a brand is almost always cheapest in its home market.
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03
Distance from the factory
Locally made and locally stocked means no freight, no importer, no distributor margin. Sakai and Seki blades, Okayama denim, Imabari towels, Solingen steel, northern Italian leather. Buying at the source typically removes two or three intermediaries, and each of them was taking a cut.
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04
Exchange rates
A weak currency makes locally priced goods look cheap to a visitor — but only while those local prices hold. Imported goods catch up with six to twelve months of lag as replacement stock arrives at the new rate. So FX widens the gap on domestically made goods and does almost nothing for imports. Never buy an import on an FX argument.
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05
Depth of the secondhand market
Japan's standout mechanism. Fast replacement cycles, fine-grained and consistent condition grading, serious authentication, and heavy supply. Cameras, watches, instruments, golf clubs and games all price differently here because "used" carries a different level of risk than it does elsewhere — and that difference in risk is the price gap.
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06
Tax-free schemes and VAT refunds
Departing travellers can claw back indirect tax. Japan refunds its 10% consumption tax; EU VAT schemes net roughly 10–14% back after operator fees. Minimum spend, paperwork and deadlines all vary by country, and the refund is forfeited entirely if you miss the customs step on departure. Not knowing the rules costs 10–20% on identical purchases.