Higher prices for NZ tech addicts?

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1285 posts

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#740514 5-Jan-2013 21:34

I have some sympathy for this argument however there seems to be a general feeling that the retailer needs to get real with their pricing but as mentioned above a lot of tech products have low single figure margins for the retailer.

The poor retailer is at the very end of the food chain but has significant costs in delivering the product to market - remember wages, rent, phone, insurance to name just a few.

Example. You buy a $1000 laptop from your retailer of choice, the sales person spends let's say half an hour talking through the options so there are wages costs of let's say $10 + rent + power etc. the retailer at best makes 5% eg $50 take 15% off that in GST - then 6 months later you expect the retailer to fix it for free after you download 64,000 viruses and say its not running right quoting the consumer guarantees act.

The global giants are the ones making the big $, while they may say they don't enforce the RRP the reality is you can't sell below cost and remain in business.

geocom

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#740523 5-Jan-2013 22:25

Looking though that page on Stuff again I don't see how they can put the iPhone 5 in that Premium Prices section at all especially as the Dell laptop they talk about in the body text with about $2000 in mark up is not mentioned in the highlights down the bottom.

The GST rate in Aus is 10% so if we pay only 3.8% more. Then Apple actually make 1.2% less here than in Aus.
The USA and AU/NZ model differ due to the radio chips used in them because of LTE so it is not a fair comparison as they are not the same product they may look the same but underneath they are different. Legislation also differs around the world when it comes to wireless products.

I think the same could be said about the Samsung Galaxy Note 2 5.5% more. As soon as you add the GST difference it's only .5% more. I don't know enough about the Samsung Galaxy Note 2 but you can almost bet there would be differences between the USA and AU/NZ model to do with RF compliance.

I guess Stuff subscribe to the anything to do with Apple will give us more views theory.

Geoff E

Kyanar

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#740540 6-Jan-2013 00:28

geocom:
The USA and AU/NZ model differ due to the radio chips used in them because of LTE so it is not a fair comparison as they are not the same product they may look the same but underneath they are different. Legislation also differs around the world when it comes to wireless products.

Actually, that's not true. The models of iPhone 5 sold in NZ are actually the exact same models sold for use on Sprint CDMA in the US or AT&T 4G LTE. And you'll also notice if you find the regulatory logos, every single one is listed on the box from FCC through to ... um, actually I don't think we have one. But I digress - they make as few models as possible (there are only three different models of iPhone 5 total) and just get them all rated at once everywhere. There is no difference.

blair003

557 posts

Ultimate Geek

#740542 6-Jan-2013 01:32

richms:
As for having to pay GST on imports - no biggie if its for business, which most IT purchases will end up being.

And perhaps as important, the CGA doesn't currently apply to goods sold for business. So once its out of the manufacturer warranty, you are on your own regardless of whether you imported it or bought it from a NZ retailer.

Goosey

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#740549 6-Jan-2013 08:36

Population = Volume of Sales
Volume of Sales = Pricing Reductions
Population = Point of Presence for Manufacturer
Point of Presence for Manufactuer = Cheaper Distribution / do it themselfs.

In little we NZ the local retailers have to bear the ticket clippers on distribution (which includes margins for fuel and exchange rate flucuations) and of course less population.

JimmyH

2886 posts

Uber Geek

#741341 7-Jan-2013 23:24

Possibly it's the distributors not the retailers making the huge margin (which is probably why they whinge about parallel importers), but the point remains that the pricing on some items is way out of line. I'm prepared to pay a (reasonable) premium to get an item from a local retailer, if that means getting service, help buying, and someone standing behind the product - but that premium isn't 400% plus!

I suspect that that part of the solution will be consolidation of retailers - less retailers means more volume, and the ability to survive on smaller margins. It also means that they will begin to achieve the scale needed to deal direct with major manufacturers without ticket-clipping by domestic distributors, and the threat of volume parallel importation to drive better bargains when they do go through distributors. The Warehouse buying Noel Leeming is probably a step in that direction.

Would be very interesting if a big chain (say Wal Mart) took a stake in the Warehouse, and used it's worldwide purchasing and logistics clout to feed cheaper product through the chain......

mattwnz

20141 posts

Uber Geek

#741344 7-Jan-2013 23:32

JimmyH: but that premium isn't 400% plus! ..

It can be a lot worse for specialty items. Electronic goods, excluding apple ones, tend to be ok priced compared to overseas, when they are on special.

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Azzura

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#741379 8-Jan-2013 08:29

Very few states in the US have no sales tax...only 5 that I am aware of.

States with no sales tax

Alaska
Delaware
Montana
New Hampshire
Oregon

Out of 50.

doozy

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#741380 8-Jan-2013 08:29

I recently bought a GPS sports watch and a set of aerobars for my road bike from an online store based in the UK, got stung by customs on the way in ... but, the cost of the bars, watch (+ some accessories for the watch) and the customs 'fees' was still cheaper than just buying the watch on its own from any NZ retailer.

Tarawera Ultra 2015 done, bring on 2016

BlueShift

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#741397 8-Jan-2013 08:59

I buy 90% of my dead-tree books from Book Depository. My most recent purchase, the paperback of Steven Erikson's House of Chains was $17 from BD, delivered free to my mailbox from the UK, or I could pop down to Whitcoulls or Paper Plus and buy it for $32, or the Warehouse has it for $28.
No contest, half price. I can wait 10 days for it to arrive.

trig42

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#741423 8-Jan-2013 09:47

BlueShift: I buy 90% of my dead-tree books from Book Depository. My most recent purchase, the paperback of Steven Erikson's House of Chains was $17 from BD, delivered free to my mailbox from the UK, or I could pop down to Whitcoulls or Paper Plus and buy it for $32, or the Warehouse has it for $28.
No contest, half price. I can wait 10 days for it to arrive.

I think books are where this batlle is going to be fought and where we will see casualties. Shoes and clothes may not be too far behind (except they attract duty).

Books are easy to ship (I have been buying books online for years) and do not attract customs fees (unless you are buying hundreds of dollars worth). I suspect it is the NZ publishers/distributors making big margins or having high overheads that pushes our book prices up. It will kill off the bookstores though.

I know that most electronics stores operate on very small margins, and are constantly negotiating with the importers/distributors for better terms.

Klipspringer

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#741428 8-Jan-2013 09:55

Gooseybhai: Population = Volume of Sales
Volume of Sales = Pricing Reductions
Population = Point of Presence for Manufacturer
Point of Presence for Manufactuer = Cheaper Distribution / do it themselfs.

In little we NZ the local retailers have to bear the ticket clippers on distribution (which includes margins for fuel and exchange rate flucuations) and of course less population.

Agreed. And when factoring in the high cost of rent most shops face, and the high minimum wage in NZ, we bound to be much more expensive.

tonyhughes

Hawkes Bay
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#741444 8-Jan-2013 10:11

Businesses in New Zealand are bound to the terms of the CGA, minimum wage laws, health and safety requirements, and in many/most cases, insurances (stock, buildings, public liability etc etc), and countless other required overheads and costs of doing business.

Very far removed from someone operating out of a large garage or small warehouse in another country that doesn't have to deal with our costs and regulations.

Take the money + post the item.

Pretty cheap if you're doing it on eBay or even your own website.

I don't bemoan retailers prices in NZ in general. They support our economy, their revenue employs our citizens and residents, their outgoings support other businesses to do the same.

When I buy from a NZ business, I have the CGA (a very powerful tool) to fall back on, and have done so several times.

I typically purchase larger value purchases in New Zealand (less stress, CGA protection, local service, zero hassle when stuff goes wrong).

I typically purchase smaller items overseas (little chance of customs/GST issues, lack of care about customer service, items that are not likely to be DOA, etc etc).

I paid way over the odds for a gift for my partner for Xmas. She really wanted something (non-tech, and breakable). I bought locally, for about 200% what I would have paid to bring in from overseas.

In return, it was definitely here for Xmas, it was exactly the right product, it was inspected closely at time of purchase, the shop employs 2 people fulltime in my town, and their warranty service in writing is that they will replace a defective item without question within five years (and they have been in business for decades).

or...

Half price from the internet...

Jas777

838 posts

Ultimate Geek

#741445 8-Jan-2013 10:12

Interesting to see what the pricing in the US would be if the same level of sales was the driving factor.

I can see the day soon when not many book or electronic stores exist in NZ. Will be kinda sad in one way as it is a source of employment.

Of course an unintended by-product could be that malls will only have food outlets and predominately female related shops resulting in fatter people and really bored males following females around the mall

BlueShift

1692 posts

Uber Geek

#741461 8-Jan-2013 10:43

Jas777:
Of course an unintended by-product could be that malls will only have food outlets and predominately female related shops resulting in fatter people and really bored males following females around the mall

Have you not been to a mall lately? That pretty much describes my local Westfield to a tee.

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