yitz: The regulation relating to pharmacy ownership is currently under review.

Oh goody - that won't take more than the five minutes the review ought to take I am sure. Mustn't forget to 'consult' a lot instead of taking a decision....

sbiddle:

 

You'll also probably the find the red alert special resulted in a reduced price from the manufacturer/distributor so at normal RRP the margin would probably be similar.

 

 

 

+1  The supplier takes a negative margin in order to give the buyer a postive margin.   Nett result is units are sold but at the expense of overall profit. 

I think the retail model in NZ is seriously flawed. Sometimes we have the exporter - importer - distributor - retailer in the supply chain, no wonder we often pay a lot more than those overseas. The global market will only increase as will online shopping, retail stores that don't offer much more than just product supply will become endangered species. Those in large malls will probably be OK as shoppers go for more than just picking up an item from one store.

One thing that always annoyed me when I worked at Bond & Bond (late 90's) was we never actually knew what the real cost price was and I suspect this will be the same for most retail employees today. Yes you have the cost price in the computer however this is just the price someone in the purchasing department has entered. This price wouldn't allow for rebates retailers get for selling a certain number of a product etc and special prices distributors may offer large chain stores from time to time. It was often frustrating if a competitor offered a product at say 25% less than your "cost price" and if we were matching it we were apparently losing money (and commission) when in reality the retail group was probably still making a margin on it.

marmel:

 

One thing that always annoyed me when I worked at Bond & Bond (late 90's) was we never actually knew what the real cost price was and I suspect this will be the same for most retail employees today. Yes you have the cost price in the computer however this is just the price someone in the purchasing department has entered. This price wouldn't allow for rebates retailers get for selling a certain number of a product etc and special prices distributors may offer large chain stores from time to time. It was often frustrating if a competitor offered a product at say 25% less than your "cost price" and if we were matching it we were apparently losing money (and commission) when in reality the retail group was probably still making a margin on it.

 

I've had a salesperson in Harvey Norman tell me what a great deal I was getting on a product and that according to the computer "they were just breaking even and it wouldn't even cover his commission" almost trying to infer I was getting a great deal. My response that this now meant there was now plenty of room for further negotiation didn't seem to go down well with him.

I always find it a problem when JB, Noel Leeming etc have cost + x% sales - when anybody who knows anything about retail knows this isn't the true cost.

The problem with something like the baby monitor is it's the sort of thing a growing number are simply buying direct from China themselves from somewhere like Aliexpress for literally 1/2 the price. I'm amazed at the number of people I know who aren't tech savvy but just automatically look at places like Aliexpress when they're after something these days.

I see so much irony on one hand the large threads on here about people demanding CGA support for mass market items which ultimately means the supply chain needing to add margin to support this, meanwhile the you've got the rest of the population shopping for the cheapest product direct from China rather than buying locally. This in turn forces up local prices as the wholesaler can't compete when sales slow.

joker97:

 

sxz:

 

Thought you guys might find this interesting:

 

• Video Baby Monitor - retails for $NZ250
• The Warehouse RED ALERT deal sold this for $175 (or thereabouts).  I was (am) very pleased with this price for this model.
• It arrived this morning and included an invoice from the manufacturer to the warehouse(!) showing the manufacturer only charged the warehouse $NZ127 (including GST).  Shipping must have come direct from the manufacturer in OZ.

I don't work in retail, so generally have no idea what markup retailers make on products, but I was genuinely surprised that even on the RED ALERT deal the warehouse still made nearly $50 from me.  At $250 they would be making $123 (gross) on every product sold.

 

This is the model in question:  https://www.noelleeming.co.nz/shop/computers-tablets/smart-home/baby-monitors/vtech-bm3500-safe-sound-video-audio-baby-monitor/prod144963.html 

 

 Edit: to clarify the manufacturer's charges included GST

 

 

 

 

You think every time there is a Red Alert TWH is then throwing money at you? Of course they make money. In a retail store, they make money even at 60% off.

 

Yeah and its funny to watch people bitch at Apple taking 30% of the retail price for things sold on iTunes/App Store.

This is also why adding GST on imports, the GST is nothing compared to the markup retailers add on.

sbiddle:

The problem with something like the baby monitor is it's the sort of thing a growing number are simply buying direct from China themselves from somewhere like Aliexpress for literally 1/2 the price. I'm amazed at the number of people I know who aren't tech savvy but just automatically look at places like Aliexpress when they're after something these days.

I see so much irony on one hand the large threads on here about people demanding CGA support for mass market items which ultimately means the supply chain needing to add margin to support this, meanwhile the you've got the rest of the population shopping for the cheapest product direct from China rather than buying locally. This in turn forces up local prices as the wholesaler can't compete when sales slow.

 

 

 

Geektastic: I've always struggled to see the value of distributors in the modern age.

I ring my distributor and ask for 10 widgets. He emails the manufacturer in Japan who send him 10 widgets.
He takes the widgets of of the box and sends them to me.

Alternatively I could email the manufacturer in Japan and he could send them direct to me....

So what is the value of the distributor?

mattwnz:

Geektastic: I've always struggled to see the value of distributors in the modern age.

I ring my distributor and ask for 10 widgets. He emails the manufacturer in Japan who send him 10 widgets.
He takes the widgets of of the box and sends them to me.

Alternatively I could email the manufacturer in Japan and he could send them direct to me....

So what is the value of the distributor?

The model is outdated this is why you do get businesses now buying direct. For example some builders now import products from overseas directly because it is a lot cheaper, allowing them to make a bigger margin. Buying from a nz retailer though does give you CGA protection. With amazon opening in oz, it will be interesting so see how things will change.

However, in your example, is the  builder not a 'NZ retailer' for the purposes of CGA?

mattwnz:

sbiddle:

 

The problem with something like the baby monitor is it's the sort of thing a growing number are simply buying direct from China themselves from somewhere like Aliexpress for literally 1/2 the price. I'm amazed at the number of people I know who aren't tech savvy but just automatically look at places like Aliexpress when they're after something these days.

 

 

 

I see so much irony on one hand the large threads on here about people demanding CGA support for mass market items which ultimately means the supply chain needing to add margin to support this, meanwhile the you've got the rest of the population shopping for the cheapest product direct from China rather than buying locally. This in turn forces up local prices as the wholesaler can't compete when sales slow.

 

 

 

 

 

 

 

 

 

 

 

 

 

The main things purchased from overseas mainly applies to lower cost smaller products, and that only run at low voltage. But who would buy something like a TV or microwave from overseas due to size. Or even buy a smaller expensive product, whichout any form of consumer protection, unless the savings are enough to take the risk on. But from my experience much of what is being sold on these cheap Chinese websites is pretty rubbishy.

Some things do have very good, international, manufacturer provided warranties.

Leica binoculars (as an example) have a warranty that Leica provides that lasts between 25 years and forever (depending on the model) and will be honoured all over the world, regardless of where you bought them. So perhaps there is a tier of things which can be bought overseas. I have bought electrical goods from the UK which are not available here and simply chopped off the UK plug and rewired the plug when they arrive. Usually they are relatively inexpensive things like coffee makers etc though to be fair.

There are not many Chinese websites I would buy from for fear of either getting tat or being ripped off completely. They have an image problem!

Geektastic: I've always struggled to see the value of distributors in the modern age.

I ring my distributor and ask for 10 widgets. He emails the manufacturer in Japan who send him 10 widgets.
He takes the widgets of of the box and sends them to me.

Alternatively I could email the manufacturer in Japan and he could send them direct to me....

So what is the value of the distributor?

The biggest value of the distributor is to the manufacturer. This is why manufacturers appoint local distributors. Most manufacturers are not set up or interested in servicing lots of small markets. Most of these have different laws, market conditions and in the case of NZ very limited size.

For example a manufacturer who makes a few tens or hundreds of thousand dollars a year in sales won't have any interest in dealing with the CGA. It is significantly more efficient to give away margin and let someone else have those headaches.

Geektastic:

mattwnz:

Geektastic: I've always struggled to see the value of distributors in the modern age.

I ring my distributor and ask for 10 widgets. He emails the manufacturer in Japan who send him 10 widgets.
He takes the widgets of of the box and sends them to me.

Alternatively I could email the manufacturer in Japan and he could send them direct to me....

So what is the value of the distributor?

The model is outdated this is why you do get businesses now buying direct. For example some builders now import products from overseas directly because it is a lot cheaper, allowing them to make a bigger margin. Buying from a nz retailer though does give you CGA protection. With amazon opening in oz, it will be interesting so see how things will change.

 

However, in your example, is the  builder not a 'NZ retailer' for the purposes of CGA?

Geektastic: I recently discovered that the standard mark up on items sold in pharmacies, excluding prescription items, is 200%.

Still, if the government only "levelled playing field" by charging GST on imports below the current threshold all would be well in NZ retail....!

Some pharmacist was done for tax fraud a short time back -- he failed to declare something like 800k a year in profits from his small store. 

Maybe the govt should be looking into pharamacies instead of petrol stations!!