Article on price gouging in local retail vs. Grey Imports etc

[JM Tran]

Heres a good article from SMH about prices in Australian retail vs. grey importers and international pricing - thought it is fitting for photography as many of us also have turned to buying overseas in recent times due to the massive price differences here and abroad.

http://www.smh.com.au/digital-life/digital-life-news/aussie-tech-price-ripoffs-go-under-the-microscope-20110922-1km3r.html

Australians pay hundreds of dollars more for laptops, phones and other gadgets while software, which is now often delivered over the internet, is commonly 60-80 per cent more expensive in Australia despite companies facing no significant additional costs to distribute it here.

Read more: http://www.smh.com.au/digital-life/digital-life-news/aussie-tech-price-ripoffs-go-under-the-microscope-20110922-1km3r.html#ixzz1YflESGdJ



In a speech last night Husic gave an example of high-end editing software that costs $12,000 more in Australia than in the US. He also quoted an IT retailer who said companies like Canon and HP in Australia refuse to respond to concerns about price discrimination and that many Australian retailers were scared to speak out as they feared being cut out or penalised by the big companies.

Read more: http://www.smh.com.au/digital-life/digital-life-news/aussie-tech-price-ripoffs-go-under-the-microscope-20110922-1km3r.html#ixzz1YflKqfDg



Personally, I travel a lot overseas for photography work and have stopped buying most of my stuff locally, even clothing and gym supplements which is half price or less overseas. I would love to support the local industry, but only when I deem it is fair for the consumer such as myself. It is worth reading the 140 comments or so below the article too from various people, to get views on both sides of the coin.

Either way, I think there will be a positive shift in the Australian retail market sooner or later.

[KeeFy]

The fat cats gets fatter. It works for electronics and stuff where you can get delivered.

In America.
Merc E63 AMG = USD$115,000 brand new.

In Australia
E350 = $130,000 for a EX DEMO.
E63 = $245,800 brand new.

I know there are taxes on the car, but does it really cost $130,000 more ?

At $115,000 the dealer in the states is making a decent profit. A E63 is USD$80,000+ as a base cost from factory.

Ripped off is an understatement.

[Duane Pipe]

I to would like to support local retailers, I purchased 2 items from US and saved money even though the postage was $80.00, no retailer
in AU could match the price, the items were $70.00 + $80 for postage

[ricktas]

The rip-offs are not just between Australia and Overseas. My brother recently decided to buy a new boat (he is a fisherman). He went to several sales yards here in Hobart, and drove to the North of Tasmania to yards as well. He had researched on the net which hull he wanted, motors, accessories etc.

He then flew to Melbourne for a weekend and visited the boat sales yards there. He ended up buying one in Melbourne, and had it placed in a shipping container and freighted to his place. By doing so he saved over $65,000 on the next best quote he had here in Tasmania, for the same hull, motors and accessories. Now I get a few thousand for buying it here (smaller market), but $65K means someone, somewhere is making a lot of extra money, for not doing much (placing an order over the phone or net to the manufacturer). $65K saving on an over $200K investment is not bad.

I get that retailers are hurting and that wholesalers are for some reason, not offering parity in price with OS markets, but, something else is going on here too, and given my brother's experience, no wonder people are buying off the net (even just doing so from interstate, not overseas).

[camerasnoop]

This article is along the same lines and has some survey results as well.

http://www.dailytelegraph.com.au/news/trying-not-buying-retailers-fight-back-against-time-wasting-internet-users/story-e6freuy9-1226144927412

$30 explanation fee on camera gear, eh? Most of should be charging the salesmen that fee.

[Kym]

It's probably worth noting that even if ALL overseas 'net purchases were charged the full import tax + GST then the prices still don't come close.
Gerry Harvey has got it very wrong on that subject. It would make virtually no difference.

That said, I'll still buy local whenever its reasonable. There are significant costs in a Bricks and Mortar shop.
If the B&M gives value which includes service and advice then its often worthwhile.
If the B&M are clueless (Hardly Normal?) then why bother, esp if their prices are double or triple 'net prices.

[Cage]

What I have noticed is that there has been no real price drop in Australia, even though our dollar has improved from the mid 50¢ area several years ago, to up to $1.10 in recent times.

I have watched the prices on Pentax gear and the only items that are relatively competitive with overseas prices are items that have been introduced in the last 6 months or so.

Now I appreciate that there would be a run-out period for stock purchased at the old rate, but unless they were buying 2-3 years worth of stock at the time, a highly unlikely scenario, particularly with electronics which seem to be outdated before you turn them on, the importers have been having a lend of us, big time!

Anybody noticed any big price drop from the importers of Harley Davidson?

Yes, it's the importers who are making the big dollar, and I do feel sorry for the guys in the bricks and mortar stores who are aware of what is happening but are really not in a position to do a whole lot about it.

And yes, some of the blame should be allocated to the manufacturers who should be exercising a bit more control over their importers.

The only reason that most of us keep buying our big-ticket gear locally is the fear of no warranty support should you be unlucky enough to bring in a dud from overseas.

[fastr1red]

This article is along the same lines and has some survey results as well.

http://www.dailytelegraph.com.au/news/trying-not-buying-retailers-fight-back-against-time-wasting-internet-users/story-e6freuy9-1226144927412

$30 explanation fee on camera gear, eh? Most of should be charging the salesmen that fee.

Totally agree with you there Snoopy.

"I've got to pick the people who won't screw me over," Mr Mackenzie said.
So whoever goes in screws him over?? Unless they buy a camera!
How much more money does this guy want?
This is the same attitude I got last week when I was shopping for my 70-200VRII. All I got was "we only make $100 on this lens now as the price has gone up"

[Wayne]

I have long and often been a vocal supporter of buying offshore to get the best deal. Why pay more with the internet and the world now being a global marketplace. I have said before when the greedy distributors/retailers start to charge a fair price for the goods, I will support the local sellers, problem is that it seems to take a long time for those setting the prices to get the hint, and the recent strength of the AUD vs USD would have surely had them hurting for once. When they can't sell because retailers won't stock, or consumers wont buy, they will be going down the gurgler, and only then do they listen.

My prefered retailer of motorcycle accessories for many years has had a captive market, especially on leathers, luggage etc and the things that cost a bit more to ship from OS, but in the past 12 months they have been crying because everyone buys from the net, and they have finally woken up. They now price their goods not at the same point we can pay OS, but slightly above it to make buying from OS hardly worthwhile, and this has in some cases meant 30-50% cheaper than in all the years gone past. I had a good chat to the store manager last week, and he conceded that the days of rorting us here with the current FX rate is over, and to survive they had no choice but to slash their once huge margins.

[Tommo1965]

I guess if the dollar goes back down to $0.65 ..it wont be worth getting the overseas products..

I agree with trublubiker.....why are will still paying top prices when the dollar has been so good for a while now ?....

although I recently bought a reflector from my local shop..it was the cheapest price anywhere even on the net !!

[Scotty72]

"I've got to pick the people who won't screw me over," Mr Mackenzie said.

This, to my mind, sums up the problems with Oz retail.

Potential customers are not welcomed as the opportunity for a sale; instead potential customers are treated as threats.

This new idea of charging $30 for camera advice, $50 to try on a suit etc. is blatent stupidity. Of course, if I am going to buy something, I have the right to ask a question about it or to make sure it fits.

So, retails who declare war on the basic tennants of common sense are bound to fail.

Scotty

PS. I wonder if... I pay for advice about a camera... So, is the shop liable for any incorrect advice? If money changes hands... I wonder...

[ashey]

I for one would love to support our local retailers, but there comes a time when you have to say enough is enough. Since the time of deregulation we have seen the buying power of our dollar dwindle. After reading that Mr Husic states, he is not shaw what the government can do about regulating prices. What a load of b@#$s$%^, was it not the government that made all these sweeping changes in the first place ?, or is my assumption that big business run the the governments of this world true, I think so.

[JM Tran]

The fat cats gets fatter. It works for electronics and stuff where you can get delivered.

In America.
Merc E63 AMG = USD$115,000 brand new.

In Australia
E350 = $130,000 for a EX DEMO.
E63 = $245,800 brand new.

I know there are taxes on the car, but does it really cost $130,000 more ?

At $115,000 the dealer in the states is making a decent profit. A E63 is USD$80,000+ as a base cost from factory.

Ripped off is an understatement.


Yup the cars segment in Aus particular luxury and high end performance cars is one of my major irks in Aus retail.

A Ferrari or a Mercedes for example, all come from the same factories yet why is it half price or less in the US and Europe, and we also get slugged with the luxury car import tax thing in Australia? I have always wanted to know the reasoning behind the retail pricing of it here and its justifications.

[Bennymiata]

I'm surprised that no-one has said anything about how much we pay for groceries with our Coles/Woolies duopoly.
You can walk into a Woolies supermarket in Auckland, and buy exactly the same groceries there, same labels same makers etc., and pay less than 2/3rds of what you would pay in a Sydney supermarket.

What about petrol!
When oil was US$150 a barrel a few years ago, and our dollar was only worth around US$0.80, we were paying $1.50/$1.60 a litre, and now that oil is around US$80.00 a barrel, and our dollar is more or less parity, we're still paying around $1.40/litre!
Seeing that Coles/Woolies now control around 70% or retail petrol sales, does anyone smell a rat?

A Porsche 911 Carrera costs around US$84,000 in the US, yet here, the same car is around A$250,000.
Why??
Because you can't import one from anywhere else and get it registered here for road use, even though you would save over $100K if imported one from the US and had it converted to RHD.

[Roo]

I think the fitting fee refunded on the purchase is a good idea, I cannot see it getting any legs on over the counter advice/information though.

[Colinc1]

I am a frequent buyer of grey market goods,as i save a lot of $$.

But has anyone thought about how much rent the poor B&M shop keepers have to pay??

Recently we made an inquiry about a vacant shop in the local shopping centre, with the idea of opening a restaurant
with a few like minded friends.

We were thinking about $500-$600 a week, but were shocked at the quoted price of $1600 a week for an outer suburban shop that would not fit any more than 10 - 6 seater tables
after fit out for the kitchen.

One of our friends said he could rent a bigger shop in London for 2/3 to 1/2 the price.

Makes you wonder who is really taking us for a ride.

[camerasnoop]

Reminds me of my former life in the corporate world. There, they are hung-up on the term "World's Best Practice". That and ROA made the large company I worked for sell most of its property holdings, and then rent them back. They couldn't achieve the returns that landlords were achieving in rent. Apparently it didn't matter that not paying rent helped their retail returns for operations coming out of those properties. The accountants screwed them. The new landlords had to up rents to satisfy their bankers, and operations started closing.

[KeeFy]

I think the fitting fee refunded on the purchase is a good idea, I cannot see it getting any legs on over the counter advice/information though.

It's a bad idea. I went into a shop thinking of picking up a suit and i needed it for the next day. I tried a few and one of them was the closest to fit but needed alterations. I said i'll pass on buying it cause i'll still need to spend money on alterations and stuff. The sales lady instantly called me cheap. Imagine having to pay $50 for that kind of service. Insulting me won't make me buy it on the spot you know? I told her "Yes i am cause i'm Asian right?" Laughed and walked out.

[Ezookiel]

I was very lucky that the person that worked at the local camera store, turned out to be a very long term friend that I didnt know worked there. I got a very good deal from her. But I also told her the prices I'd seen online too, and she knew I'd likely go with the online price for at least a fair portion of the sale, so she pulled me up some amazing prices. I'm sure her company didn't lose money on the sale, and they won my patronage for both that item, and several other items since. I saw a good price at our local CostCo, and when I took it to another local dealer, they moved heaven and earth to match it.

[ricktas]

I am a frequent buyer of grey market goods,as i save a lot of $$.

But has anyone thought about how much rent the poor B&M shop keepers have to pay??

Recently we made an inquiry about a vacant shop in the local shopping centre, with the idea of opening a restaurant
with a few like minded friends.

We were thinking about $500-$600 a week, but were shocked at the quoted price of $1600 a week for an outer suburban shop that would not fit any more than 10 - 6 seater tables
after fit out for the kitchen.

One of our friends said he could rent a bigger shop in London for 2/3 to 1/2 the price.

Makes you wonder who is really taking us for a ride.

Yep, friends of mine rent a store in a shopping centre here in Hobart @ $1000.00 per square metre, per month. Luckily they have a high volume turn-over and can pay, but they are also looking around for alternate locations cause the lease is due for renewal early next year. Shopping Centre complex owners do not care about their leasee's in any way. If one moves out, they just get another, but I think the time is coming when they will see that business owners are fed up, and we will see more and more empty space in these larger centres.

[rellik666]

On the ole shopping centres, I think we have found out one of the "middle men" that is gaining all our dollars. Recently I read that the US was moving away from the shooping mall, for those exact reasons. With the economy in serious decline, shop owners could nto afford the rents and are moving back to the shopping strips that they used to inhabit. From what I have read about the costs involved in being in a Westfield shopping centre I am not surprised at the turnover of shops. But for a lot of retailers, the big chains, it is a case of you need to be there. I have noticed that JB HiFi have been moving to larger premises in industrial areas rather than the shopping centres....

If you think of the rent then think of the restrictive hours you must be open to be there and the fixed costs of services...it can soon add up....

Saying that though....I am not about to line the pockets of Westfield and the like, if I can help it. Retailers need to realise that if they provide service and a competative price we will come....

[kiwi]

anyone considering the reality of a high cost base here compared to say the USA ?

Labour costs
Compliance costs
Tax costs
Property costs

etc

?

[Scotty72]

Well,

If the monstrosities such as Westfield's Parramatta start to fail and close... good riddance.
For decades, they have sucked the life out of local communities and have done deals with local governments to enclose what was previously public space. So, of course when lazy Australians reject town centres in favour of 5,000 car park mega-malls; when you see virtual ghettos forming outside of these malls (Parramatta) - of course the malls will charge huge rents - because we queue up to jam into the mega-malls.

As for the Coles-Worths duopoly, Australians have themselves only to blame for this (same for the Westfields-isation of town centres). Every time an Australian gets sucked in to the false saving of the 4c petrol 'discount', their short-sightedness is ultimately an act of self harm. I refuse to use them - nor would I ever get close to the $30 spend at Coles-Woolworths to even qualify for the so called discount (as we only get odds and ends there).

By buying food (esp fresh) at the local markets / shops, you can often save a bit of money - or if you do pay more, you end up with far better quality food than the slops they try to sell you at the majors. Try this challenge - eat a few real apples from your local fruit shop / market then, go eat a Coles-Worths apple, then see if you can keep it down.

My point is, like so many other areas... Australians are very good at going down the path of self destruction, then complaining when the govt doesn't do 'something' about it, we complain even louder when the govt does do 'something' - and will scream the house down if the solution that we all demanded (to fix the prob we created) requires even $1 more in tax.

Finally, if any retailer puts up a sign '$50 try on fee', may I suggest they place a 'closing down sale' sign next to it.

Scotty

[Boo53]

Leaving aside the arguements about local employment cost being higher, and the higher middleman margins, try buying Photoshop CS5 from Adobe online. Its US$695 on the US site but if you click buy you get transfered to Adobes Australia site & the price is around AU$1300, and that was a couple of months ago when our dollar was US$1.10. The software downloads from the same server.

[Scotty72]

Leaving aside the arguements about local employment cost being higher, and the higher middleman margins, try buying Photoshop CS5 from Adobe online. Its US$695 on the US site but if you click buy you get transfered to Adobes Australia site & the price is around AU$1300, and that was a couple of months ago when our dollar was US$1.10. The software downloads from the same server.

I guess the electrons to carry the data across the Pacific are damned expensive. :Doh:

[Boo53]

I guess so Scotty. BUT it is across the adobe range.

I wanted pse9 to put on a new laptop for when we are in the caravan.

US$75 for download on the US site, AU$145 for us. US$75 from amazon in a box but wouldn't ship to oz. Got a damaged box version from Amazon for US$60, sent free to a reshipper who charged US$20 to send it on. Our Dollar was US$1.08 at the time

[OzzieTraveller]

G'day all

Back in the 90s I was importing computer software packages from the US
Upon arrival, Aussie Customs then placed a +20% "equalisation tariff" onto the US price paid, -then- put an aussie sales-tax of +15% on top of the previous total

The final buy-in price was within 10% of the aussie retailer's prices that I was trying to beat ... and it occurred to me that their supposedly high selling price was the same as mine with their margins on top

ie- nothing was saved, nothing was achieved, I stopped doing what seemed like a good idea at the time
Regards, Phil