# Why cost of integrated circuits (IC) are higher when purchase online than to local market [closed]

Why cost of integrated circuits are higher when purchase online than to local market. For example SN7404N on Digi-Key costs around $2 but same i got from local market in$0.2

## closed as off topic by Keelan, Leon Heller, Brian Carlton, Nick Alexeev♦, Dave Tweed♦Apr 20 '13 at 23:01

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• there is no mention of your location in your profile, where are these local markets located? – Gorloth Apr 20 '13 at 18:54
• This looks like old or salvaged parts.... I would not be surprised to find a few faulty one... It can make soldering a challenge. – Spoon Apr 20 '13 at 19:07
• Shopping questions are off-topic. – Leon Heller Apr 20 '13 at 19:18
• I don't consider this to be a shopping question, it's about factory costs, cost-efficiency and so. However, that's still off topic, I can't see how this applies to electrical engineering. Any product is cheaper on a local market than on the web. – Keelan Apr 20 '13 at 19:29
• @Camil -- "Any product is cheaper on a local market than on the web." -- That's hardly true in the general case, since pricing is effected by geography (taxes, regulations, access to materials/inputs, etc...). There are many cases were the cost of distribution is easily bested by the cost of local production/transaction (look at the food market or energy market for example). – DrFriedParts Apr 20 '13 at 19:41

If your local market is like a flea market you the price can be anything, and so can the quality. Any correlation between the two is just a coincidence.

That particular chip you mention is a dinosaur: a plain (pre-schottky) TTL chip. The amazing thing is that you can still buy them at all. A marginally more recent 74LS04 goes at 0.25 (or 0.75 if you insist on DIP).

The chip one would choose now (when you would need it at all) would be a 74HC04 or 74HCT04. For some reason they are not particularly cheaper at Digikey, but at Mouser a 7\$HC04 goes at ~ E 0.14 (@1, down to ~ 0.06 @1k).

To summarize:

• you took a bad example

• always look wider than just one supplier (use www.findchips.com !)

• if you are OK with flea market quality...

• -
• I suspect OP is in India. Almost any legacy DIP part for a fast-moving IC is dirt cheap here because those are the ones that sell most: Hand-soldering with board test can be contracted for 4 to 8 cents per 100 junctions. Conversely, any SMD IC is at prices often 3 to 10 times as much as on OctoPart searches, if available at all. The DIP parts aren't flea market items, the major manufacturers officially sell DIPs at way below any price the western market sees. Also, I suspect Digikey charges a massive inventory mark-up on DIPs, as DIPs take more storage and sell more slowly for them. – Anindo Ghosh Apr 20 '13 at 20:37
• @AnindoGhosh that's truly interesting information! – Marcus Müller Nov 20 '18 at 0:19