Even if you don’t read the business or money pages it’s been difficult to avoid the debt problems in Greece and more latterly the “Debt Ceiling” problems in the US. The US debt has reached $14.3 trillion or to put it another way $4k for every man, woman and child in the US. Unless the US Congress agrees to allow the US Government to borrow more money then the US Treasury could run out of money!
With Greece all but “bust” and the US teetering on the brink of a technical default the currency markets have been a little “choppy” to say the least! Unfortunately the core components that make up a USB flash drive (flash memory, flash controller chip and flash capacitor) are all priced and traded in US dollars so when the markets get nervous the price of flash drives can fluctuate wildly.
Flash Drive Prices in Choppy Waters
In an ideal world the suppliers of flash drives would like some stability in the prices so that they can offer customers a price which is valid for more than a few hours but the margins on the supply of flash drives are skinny and competition is fierce so any price quoted tends to be valid for a maximum of 3-days!
Fortunately, the longer term trend for USB flash drive pricing is downwards albeit there does tend to be an upward spike in prices in late summer when the large players (Apple, HTC, Kingston etc.) start to place their orders for Christmas stock. These orders might not be for USB flash drivers per se but the products they schedule into their production plans nearly always include some form of flash memory and a general increase in demand for flash memory ripples through to the USB flash drive market.
So, when asking for a price for printed USB flash drives don’t be surprised if the price is higher than you were quoted before or if the price is only valid for a couple of days – it’s just a reflection of the market and at the moment the instability in the market!
Although the Republic of Ireland has agreed a rescue package with the EU to prop up their ailing finances and to the tackle the huge hole in the government’s finance the outlook remains bleak. Whilst some countries, notably Germany, are “bouncing back” from recession there are plenty of others in addition to Ireland and Greece that are still causing real concerns.
One of the many consequences of the turmoil in the Eurozone is the knock on effect on the currency markets. Over the last couple of weeks the Euro and the British Pound have fallen against the US Dollar. Today the £ stands at around 1.57 when a couple of weeks ago it was trading at over 1.62. Most trade from the UK with China is undertaken in US dollars so this 3% fall in the value of the British Pound has a direct impact on the cost of many imported goods including USB flash drives.
Of course, in the overall scheme of things, a modest increase in the price of flash drives is inconsequential, particularly when millions of jobs are being lost and countries and governments are being brought to their knees.
However, if you looking to buy USB flash drives printed with your logo on its useful to understand why quotes from suppliers of flash drives have such a short validity period.
Several factors influence the price of the flash drives including exchange rates, customer demand for flash products (not just USB flash drives) and seasonal factors including the Chinese Holidays. Taken together the price of flash drives is best described as “fluid” and UK importers of flash drives need to keep a close eye on market movements and fix their prices accordingly.
Most branded USB flash drive price lists are “fixed” daily taking into consideration all of the above so if you have what looks like a good price its worth grabbing it because if you ask for a re-quote a week later you could find the price has gone up. Conversely, it could also have gone down but as with most things you buy prices seem to go up more often than they come down.
The economic turmoil in Greece is unlikely to enter the mind of anyone looking to source branded flash drives in the UK but the reality is that the current issues in Greece have a direct bearing on the price of flash drives. Why? Well, USB memory sticks, like many other PC components and peripherals are purchased in USD ($) from the factories in China.
Today’s announcement by rating agency Standard & Poor’s to downgrade Greece’s debt to “junk” because of concerns that the country may default has hit the European stock markets hard and most European currencies have fallen dramatically against the dollar (USD).
The impact of this is that prices for memory sticks will increase by circa 2% with immediate effect and all new quotes will only have a very limited “valid for” period because of the increased volatility in the market.
Branded flash drives are more susceptible to short term currency movements because orders are placed on the factories and paid for as customers confirm their requirements. Whilst some forward buying of stock does take place the wide range of styles, colours and memory sizes coupled with the fact that many customers are now taking advantage of options to pantone match body shells etc. makes it impossible to forward buy too much.
With the improvements in global transportation and the ability to manufacture and ship within days rather than weeks most branded flash drives are now manufactured to hence why an unstable currency and financial market has such a dramatic bearing on price.
Hopefully the issues in Greece will be resolved soon or at least brought under some degree of control and confidence will return to the currency markets.
In the meantime if you are looking to buy branded flash drives be prepared for some short term volatility in pricing and don’t be surprised if you’ve purchased flash drives in the past to find that prices are now higher than when you last bought them.