Hey everyone, welcome back to My Weird Prompts. I am Corn, and I have to say, the energy in our house has been a bit tense lately. If you have ever lived with someone who is deep in the middle of a home server build, you know the feeling. There are parts everywhere, half-finished scripts running on laptops, and a lot of muttering about latency and throughput. I actually found a stick of thermal paste in the butter compartment of the fridge this morning. Apparently, it needs to stay at a stable temperature?
Herman Poppleberry here, and yeah, I can confirm. I almost tripped over a box of high-static pressure fans in the hallway. But honestly, it is for a good cause. Our housemate Daniel has been on this mission to rebuild his home server from the ground up after that pretty spectacular hardware failure we talked about back in episode three hundred twelve. You remember, the one where his power supply decided to become a smoke machine?
How could I forget? The smell of ozone lingered for a week. But as Daniel mentioned in the prompt he sent us for today's show, he decided to take a very Daniel-esque approach to the procurement process this time. Instead of just clicking buy on the first site he saw, he actually built an artificial intelligence agent to scrape the catalogs of the big Israeli computer chains, specifically Ivory and KSP, and compare those prices to the recommended retail prices in the United States.
Which is exactly why we love having him around. Why just complain about high prices when you can automate the process of proving exactly how much you are being overcharged? And the results his agent found are, frankly, staggering. I mean, we all know Israel is expensive, but some of these multiples are just wild. He ran the script over a period of seventy-two hours to account for price fluctuations, and the data is consistent.
He found that almost every category is more expensive here, which is not a shock, but the kicker was the memory. According to his agent, random access memory in Israel is currently sitting at nearly five times the United States price for the same components. Five times, Herman. That is not just a little import tax markup. That is a whole different reality. If a thirty-two gigabyte kit is two hundred dollars in New York, it is a thousand dollars here. That is a monthly rent payment for some people.
It really is. And it is actually perfect timing for this discussion because we are seeing a convergence of local Israeli economic quirks and a global semiconductor market that has gone absolutely nuclear over the last few months. If you have been following the news here in February of twenty twenty-six, you know that the cost of living is the number one topic at every dinner table, right next to the hummus.
It definitely is. So today, we are going to dig into why this is happening. Why is a stick of RAM five times more expensive in Tel Aviv than in New York? Why does customer service in Israel feel like a side-hustle that closes at four in the afternoon? And what, if anything, can be done about it?
This is really a deep dive into what we have called the Economic Island effect in past episodes, like back in episode three hundred seven. But it has some new, twenty twenty-six flavors to it that I think are worth exploring. We are talking about a market that is physically isolated, regulatory-heavy, and culturally unique.
So let us start with that five times multiple on the RAM. That was the thing that really stopped me in my tracks. I mean, I expect a twenty percent markup for Value Added Tax, maybe another ten percent for shipping and local overhead. But five hundred percent? How does that math even work? Is the RAM being hand-delivered by a paratrooper?
Well, to understand that, we have to look at what is happening globally first, and then look at how that gets distorted through the Israeli lens. Right now, in early twenty twenty-six, the global memory market is in what analysts are calling a hyper-bull phase. Because of the massive demand for artificial intelligence servers, the big manufacturers like Samsung and SK Hynix have shifted almost all their production to high-margin server grade memory, specifically High Bandwidth Memory four and DDR five.
Right, so the supply of consumer grade memory has essentially cratered because the big guys are chasing the AI gold rush.
Exactly. In the United States, prices for a sixty-four gigabyte kit of DDR five have basically tripled since October of last year. You are looking at something that used to be one hundred fifty dollars now costing four hundred fifty or five hundred dollars. Now, here is where it gets weird for Israel. Our local retailers, the big ones like Ivory and KSP, they do not buy directly from the manufacturers in the same way a giant like Newegg or Amazon does. They often go through local distributors like C-Data or Eastronics who hold stock.
So you are saying there is an extra layer of middle-men who all need their cut?
Not just a layer, but a layer that is often operating on very volatile inventory. If a distributor bought a huge shipment of RAM when prices were peaking, they are going to try to hold that price as long as possible. But the real issue is the monopoly power. In Israel, for many of these components, there is only one or two official importers who have the rights to bring in certain brands. If you want Corsair, you go through one guy. If you want Kingston, you go through another.
I remember we talked about this in our logistics episode, number two hundred ninety-three. If you are the only guy allowed to bring in a specific brand, you can essentially set the price at whatever the market will bear, especially if you know that shipping individual sticks from the United States is a headache for the average consumer who might get hit with customs delays.
Precisely. And when you add the fact that the Israeli shekel has been a bit volatile lately, these importers bake in a huge margin of safety. They are terrified of the exchange rate moving against them while the goods are on a boat, so they price it at a level that protects them from almost any currency swing. They are essentially charging the consumer for their own lack of hedging.
But even then, five times? I was looking at some numbers earlier. If a kit is five hundred dollars in the United States because of the global shortage, five times that is twenty-five hundred dollars. That is the price of a used car! It feels like we are being punished for living on this little economic island. Is there any justification for it at all?
There is another factor most people do not realize. In Israel, the Value Added Tax, or VAT, just went up to eighteen percent at the start of twenty twenty-five, and there is talk in the twenty twenty-six budget of it hitting nineteen percent soon. In the United States, the listed price usually does not include sales tax, which might be zero to ten percent depending on the state. So right off the bat, you have an eighteen percent gap. Then you have the purchase tax on certain electronics. While pure computer parts are often exempt from customs duties, they are not exempt from the high costs of local standards testing.
Oh, right. The Standards Institute of Israel. We have joked about them before, but they are a serious barrier to entry for smaller players. They are like the final boss of Israeli bureaucracy.
They really are. Until very recently, if you wanted to bring in a new model of a motherboard or a power supply, it had to go through this incredibly rigorous, and expensive, local testing process to make sure it met Israeli standards for voltage and plug safety. Even if it already passed United States and European Union testing. That cost gets passed directly to the consumer. Now, there is a reform happening right now, the government is trying to move toward a what is good for Europe is good for Israel model, but the implementation has been slow.
I heard about that reform. It was supposed to allow any product sold in the European Union to be sold here without extra testing. Why has it not fixed the prices yet?
Because the big importers are fighting it tooth and nail. They claim it will lead to unsafe products, but really, they are protecting their turf. And even when the law allows it, the logistics are still hard. You still need a Hebrew manual, you still need a local warranty provider, and you still need to deal with the Israeli postal service, which is a whole other episode.
So the big retailers like Ivory and KSP basically have a captured market. If you need a part today because your server died, you cannot wait three weeks for an international shipment to clear customs. You have to go to them. And that brings us to the second part of Daniel's prompt, which is the customer service experience. Herman, why is it so bad?
Oh boy. This is where it gets personal. Daniel mentioned that he was trying to follow up on an order and he got an automated response saying their customer service hours are eight in the morning to four in the afternoon. And it was twenty minutes past four. I mean, four PM? That is when the day is just getting started for most tech workers. How can a major national retailer justify closing their support lines that early?
It is a fundamentally different philosophy of what a business is for. In the United States, the consumer is king because the market is so hyper-competitive. If Newegg does not answer your chat at ten PM, you will go to Amazon. But in Israel, as Daniel correctly pointed out, these businesses often prioritize their B2B relationships. Business to business.
Exactly. If you are a company buying five hundred workstations, you have a dedicated account manager who will answer your call at midnight. But if you are an individual consumer buying two sticks of RAM, you are essentially a nuisance to their bottom line. The margins on individual consumer sales are lower, and the support overhead is higher. So they truncate the hours to save on labor costs. They know you probably do not have many other places to go.
It also feels like there is a cultural element here. There is this concept in Israel of being a freier, or a sucker. And for a long time, there was this sense in the business world that if you provided too much service, if you were too accommodating to the customer, you were being a freier. You were letting the customer take advantage of you.
That is such a keen observation, Corn. It really is a cultural shift that is still in progress. For decades, the Israeli economy was very centralized and very socialist in its roots. Competition was not the primary driver; survival and basic service were. We are now in this high-tech, hyper-capitalist era, but the service culture is still catching up. It is the paradox of the Startup Nation: we can build the world's best cybersecurity software, but we cannot answer a support ticket after four PM.
It is like we have Silicon Valley tech but a nineteen seventies post office service model. It creates this incredible friction. And it is not just the hours. It is the attitude. If you go into a store with a defective part, the default assumption often feels like they are trying to prove you broke it, rather than trying to help you fix it. You feel like you are on trial just for asking for a refund.
Right, the burden of proof is on the consumer. Which leads us to the question of consumer protection laws. Israel actually has some pretty decent laws on paper. For example, the Consumer Protection Law allows you to return many items within fourteen days for a refund, even if you just changed your mind. But there are huge exceptions for electronics that have been opened or connected to power.
Which is basically every computer part. You cannot know if a motherboard works until you open it and plug it in. So the law is essentially useless for PC builders?
Pretty much. Once you break that seal, your legal right to a simple return often evaporates. You are then at the mercy of the warranty process, which, as many of our listeners know, can involve sending a part away for weeks while they test it in some lab in central Israel. And if they decide it was a power surge or user error, you are out of luck. In the States, you can drop a motherboard back at a physical store or a locker and have a refund in your account before you even get home. Why can we not have that here?
Well, some of it is starting to change. Just this year, in early twenty twenty-six, there has been a new draft bill from the Ministry of Justice. They are trying to mandate that foreign businesses that specifically target Israeli consumers, like by having a Hebrew website or showing prices in shekels, have to comply with Israeli consumer protection laws. It sounds like a good thing, right?
It is a double-edged sword. While it sounds like it protects us, it might actually have the opposite effect. If it becomes too legally burdensome for a giant like Amazon or Newegg to sell here, they might just stop shipping certain categories to Israel altogether. Or they will raise their prices to cover the legal risk. We want the protection, but we do not want to lose the access to the global market that keeps the local players honest.
That is the classic Israeli paradox. We want to be part of the global village, but we want to keep our local gatekeepers. The real solution to the high prices and the bad service is not more regulation on the foreign players; it is more competition for the local ones. When Amazon started offering free shipping to Israel on orders over a certain amount a few years ago, it was a massive wake-up call for the local retailers.
I remember that! Prices for SSDs and small peripherals actually dropped for a while because everyone was just buying them from the United States. But for big, heavy, or sensitive components like power supplies or high-end graphics cards, the shipping and the import hassle still keep people tethered to Ivory and KSP. And that is why RAM being five times more expensive is so egregious. RAM is tiny. It is the easiest thing in the world to ship in a padded envelope. There is no excuse for that kind of markup other than a lack of awareness from the consumer or a temporary supply squeeze that the local shops are exploiting.
So what can Daniel do? And what can Israel do as a country to improve this? If I am building a server today, am I just stuck being a freier?
For Daniel, the answer is usually patience and automation. If he can wait for a deal on an international site and deal with the potential warranty headache later, he can save literally hundreds of dollars. But for the country, it is about breaking these distribution monopolies. We need to make it easier for parallel importers to bring in goods without jumping through a thousand hoops at the Standards Institute. We need to fully implement the What is good for Europe is good for Israel reform and actually enforce it.
We also need to talk about the B2B focus. If these stores want to survive in a world where everyone can just order from a global warehouse, they have to find a way to add value. Maybe that is not just selling the part, but offering better local support, or build services that are actually reliable. They need to realize that the individual consumer is not just a nuisance.
I agree. But it requires a mindset shift. They have to stop seeing the individual consumer as a sucker and start seeing them as the future of their business. As more people work from home and build their own infrastructure, like Daniel is doing, the line between a professional and a hobbyist is blurring. The guy building a home server today might be the Chief Technology Officer of a startup tomorrow. If you treat him like a freier today, he is not going to sign a million-dollar contract with you next year.
That is a great point. It is about long-term relationship building versus short-term margin grabbing. And frankly, the current model in Israel feels very short-term. It is about how much can we get for this stick of RAM right now because we have it in stock and the other guy does not.
It is also worth mentioning that the government has a role in the logistics side. We have talked before about the port delays and the bureaucracy at customs. If a package sits in a warehouse at the airport for ten days, that is a cost. That is a cost in labor, in storage, and in the time-value of the money tied up in that inventory. If we want lower prices, we need a faster border.
So, looking forward, do you think it gets better? We are here in February twenty twenty-six, the economy is trying to find its footing again after a few very difficult years. Is there a path to a better consumer experience, or are we destined to always pay the tech tax?
I think it will be driven by technology. As AI agents like the one Daniel built become more common, it will be impossible for local stores to hide their markups. When every consumer can see in real-time that they are being charged five hundred percent more, the pressure to change becomes overwhelming. Transparency is the ultimate enemy of the monopoly.
I love that. The same technology that is driving up the price of RAM by creating all this demand is also the tool that will eventually force the prices down by creating perfect market transparency. It is the ultimate irony of the twenty twenty-six hardware market.
It really is. And as for the customer service, that might be the harder nut to crack. That requires a cultural change. It requires businesses to realize that their competition is not just the store down the street, but a warehouse in Ohio that has twenty-four-seven support and a no-questions-asked return policy. They are competing with a global standard now, whether they like it or not.
I think that is starting to happen. I have noticed some smaller shops starting to offer better hours or more responsive WhatsApp support. It is the big, established players that are the slowest to move because they have the most inertia and the most to lose.
They will adapt or they will be relegated to just being the place you go when you absolutely, positively need a cable right this second and cannot wait for a drone to drop it off. Which, to be fair, is still a role. But it is not a growth strategy for a national retail chain.
Definitely not. So, for all our listeners out there who are struggling with the Israeli tech tax, just know you are not alone. And if you have built your own tools to track these things, we want to hear about them. Send us your data, your scripts, and your customer service horror stories.
Data is the best disinfectant for bad market practices. And maybe if enough of us start using these AI agents, the retailers will realize they cannot hide behind four PM closing times anymore.
Well said, Herman Poppleberry. And on that note, I think we have covered a lot of ground today. From the global memory shortage to the cultural roots of Israeli customer service and the future of import reforms.
It is a complex web, but it all comes back to that one basic idea: being a consumer in a small, isolated market is a challenge that requires a lot of savvy and a little bit of automation. Stay smart, stay automated, and do not be a freier.
Before we wrap up, I want to say a huge thank you to Daniel for sending in this prompt. It clearly hit a nerve for both of us. And hey, if you are enjoying these deep dives into the weird and wonderful world of tech and life in Israel, we would really appreciate it if you could leave us a review on your favorite podcast app. It really helps the show grow and helps other people find us.
It genuinely does make a difference. And remember, you can find all our past episodes, including the ones we referenced today, at our website, myweirdprompts.com. We have a search bar there, so you can find anything from our early episodes to the latest ones on AI and logistics.
We are also on Spotify, so make sure to follow us there to get new episodes as soon as they drop. Thanks for listening, and we will catch you in the next one.
Until next time, stay curious and keep those servers running, even if the RAM cost you a small fortune.
This has been My Weird Prompts. Bye everyone!
Goodbye!
