When Apple announced its flagship iPhone 5 last week, Australian e-tailer Kogan was one of the first to make pre-orders available, even beating Apple itself. Not only that, but Kogan managed to beat the pricing by a hundred bucks per tier, so how can they do it?

With the iPhone 5 launching on September 21, quite a few people are all ready to ditch their current smartphone and snatch up the next generation of Apple handset, with a 4 inch IPS screen, new aluminium and glass design, and support for the 4G LTE networks currently on offer by Telstra and Optus.

Apple’s flagship handset for the next year, the iPhone 5 will cost $799, $899, and $999 from Apple Australia for the 16GB, 32GB, and 64GB versions respectively.

But Kogan is charging one hundred dollars less for each model, with $699, $799, and $899 for the 16GB, 32GB, and 64GB versions.

How is this possible?

“The iPhone 5 on sale at Kogan’s website is a grey import product,” said Fred Schebesta, director of Finder.com.au, a service run to help Australians compare credit cards, home loans, and mobile phone pricing. “Exchange rates, shipping rates and accessories have allowed Kogan to make a profit from the iPhone 5.”

Currently, iPhone 5 stock for Kogan comes from Hong Kong, similar to the iPad stock Kogan started offering last year, allowing Kogan to purchase them from Apple in Hong Kong at prices close to what the e-tailer is charging in Australia.