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470 posts

Ultimate Geek
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Topic # 87672 3-Aug-2011 21:33
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So I got myself a jersy a week or so ago for about $120nz from the US, about 1/2 the price I could have got in NZ, easy decision i thought, and decision that many others have made going by the amount of media coverage its getting the last few days.
  I heard an interview with the Adidas Manager for NZ and he was spouting some pretty lame reasons of why the jerseys were more expensive here.

Anyways the main reason for my post is, the only reason it is the news is because its over a Rugby jersey, wouldnt it make a better story if they dug a little deeper and did a more in depth article on all the other products we get ripped off on by companies and there regional pricing strategies?            

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Ultimate Geek
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  Reply # 501659 3-Aug-2011 21:45
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throbb: So I got myself a jersy a week or so ago for about $120nz from the US, about 1/2 the price I could have got in NZ, easy decision i thought, and decision that many others have made going by the amount of media coverage its getting the last few days.
  I heard an interview with the Adidas Manager for NZ and he was spouting some pretty lame reasons of why the jerseys were more expensive here.

Anyways the main reason for my post is, the only reason it is the news is because its over a Rugby jersey, wouldnt it make a better story if they dug a little deeper and did a more in depth article on all the other products we get ripped off on by companies and there regional pricing strategies?            


I'd love to know why NZ has such high prices.   Some might say economies of scale but I think it is more than that.

But, it is difficult or impossible to find out who is making the money as the different companies in the supply chain will never release their pricing data, especially to journalists. 

A classic is the itunes store --- we pay more than the australians, yet it is the same product. 

Recently I looked at lenovo NZ vs lenovo US.  In both cases, the product configuration is chosen on the website then the notebook is manufactured in china and shipped to the customer. So, why must the NZ consumer pay 40%+ extra for the same product?  GST does not explain this at all. 



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  Reply # 501688 3-Aug-2011 23:14
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economies of scale do explain most of the differences in most products - the USA is simply a bigger market than NZ by several orders of magnitude and so can get large bulk buy efficiencies.

*However*, I seriously doubt that argument holds up for ABs rugby shirts. IMO, there is no way the US market sells more ABs shirts than NZ.

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Ultimate Geek
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  Reply # 501722 4-Aug-2011 07:11
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Fonterra said the reason we pay high milk prices it because it mirrors international prices. Adidas say the opposite that it is to protect regional retailers. Basically if the company has no competition, they can set the price and can make up any reason they want.

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Ultimate Geek
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  Reply # 501734 4-Aug-2011 08:24
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You charge what the market will pay.  Its really as simple as that.  If we stopped buying $200+ rugby shirts, the price would fall.

We do suffer by being so remote and with a small population so have to expect to pay a little more than the US and even Aus.  But it certainly does not explain the more than double price when compared to the US.

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Ultimate Geek
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  Reply # 501743 4-Aug-2011 08:41
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NonprayingMantis: economies of scale do explain most of the differences in most products - the USA is simply a bigger market than NZ by several orders of magnitude and so can get large bulk buy efficiencies.

*However*, I seriously doubt that argument holds up for ABs rugby shirts. IMO, there is no way the US market sells more ABs shirts than NZ.


I do not accept that economies of scale 'doubles' prices or even should increase prices in some cases.  

There are too many examples where prices are higher for NZ consumers where economies of scales do not apply.   (see itunes, lenovo, dell where products are sourced and delivered in exactly the same way regardless of global location). 

Even companies like Norton try to force you to use their local website, but the local norton website sells for more than the US website, despite being download content only.   

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  Reply # 501744 4-Aug-2011 08:42
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Companies blame shipping costs. I suspect shipping costs for bulk items, by ship or economy air delivery, will be cheaper per unit than consumers get. Chains of middlemen adding markup may be to blame, or excessive markup from the distributor or retailer. Some retailers make things up heaps, like Dick Smith marking their cables up 1000% (or whatever). Some sell things just above cost, TVs for example.




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  Reply # 501762 4-Aug-2011 09:22
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The price for most things is what the market will support, with some consideration for the RETAILERS needs.  

Its always been this way and for the most part I don't have a problem with it.  Retailers needs to cover their risk and make a profit, and if people are willing to pay more for living in an isolated market (i.e less choice) then it makes sense that retailers will charge more.  Which is obvious in the case of drop shipped products.

The thing I found most amusing about the Adidas jerseys was the article in the Herald.  Badly titled article for a start but the marketing manager certainly didn't help his cause :D

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  Reply # 501776 4-Aug-2011 09:51
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I remember the huge sell off of Americas Cup clothing by Canterbury after it was all over and done with. Picked myself up a nice windbreakers for $50, down from $250. And they still made a profit on it.

It's a bit like the $500 Katmandu puffer jackets.

We should all refuse to pay those prices and see how quickly the prices drop!

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  Reply # 501787 4-Aug-2011 10:01
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Talking to someone in the retail industry that I know, I can get the jersey for just under $150 from them. Gives an indication of what the markup the retailer is making, then the local distributor making their cut, and then the international distributor.



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  Reply # 501800 4-Aug-2011 10:12
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Apparantly the cost price of the jerseys are $105+GST, which is more than retail cost from the US.

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  Reply # 501808 4-Aug-2011 10:21
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*However*, I seriously doubt that argument holds up for ABs rugby shirts. IMO, there is no way the US market sells more ABs shirts than NZ.


I think this is why the media has gravitated to this story. We're living in the home of the All Blacks, but we are getting shafted on merchandise prices.  

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