Overseas Purchasing - GST Threshold about to be reduced

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239 posts

Master Geek

#1357762 3-Aug-2015 13:44

wasabi2k:
Geektastic:
wasabi2k:
Geektastic: Further to my own post above, I note that a 10% duty and 15% GST STILL do not explain why a pair of running shoes which cost NZ$120 equivalent in the USA retail at NZ$265....

because economics.

A supplier will charge what the market is willing to pay as long as they are making money.

In happy clappy land everything would be sold at cost and everything would cost the same everywhere.

In reality, the majority of people buy shoes in a shop - that shop will charge as much as they can while still making sales.

In NZ you have fun things like small population and limited competition.

In America you have bazillions of people and lots and lots of shops selling the SAME goods, so you compete on price.

If you want a pair of high end Nike's here how many shops sell them? 5? How many of those are part of the same parent company?

Does shops charging more suck? Yes. Is it surprising - not at all.

So in essence, it is because Kiwi shop owners feel entitled to rip off their customers?

The purpose of a shop is to MAKE MONEY. If people are willing to pay it, people will price their products at that level.

No-one is forcing you at gun point to go into a shop and buy something at a price you don't agree with. But clearly other people are going into those shops and buying those products.

I want lots of stuff too, but it costs too much, so I don't buy it.

If you ran a store would you sell everything as low as possible or would you try and make as much profit as possible?

edit: this isn't a kiwi thing - it happens at every level of distribution across almost every non-commodity product in pretty much every industry in every market where there are not price controls.

I would try and maximize profit as well but in a lot of countries there is choice and are markets less monopolized. Choice tends to drive prices down and with distance to the NZ market now less of an issue, there is an increasing number of opportunities to buy elsewhere.

The high NZ prices do not apply to just optional products, products you want but can probably do without. It applies to essentials as well.

Geektastic

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#1357795 3-Aug-2015 14:16

wasabi2k:
Geektastic:
wasabi2k:
Geektastic: Further to my own post above, I note that a 10% duty and 15% GST STILL do not explain why a pair of running shoes which cost NZ$120 equivalent in the USA retail at NZ$265....

because economics.

A supplier will charge what the market is willing to pay as long as they are making money.

In happy clappy land everything would be sold at cost and everything would cost the same everywhere.

In reality, the majority of people buy shoes in a shop - that shop will charge as much as they can while still making sales.

In NZ you have fun things like small population and limited competition.

In America you have bazillions of people and lots and lots of shops selling the SAME goods, so you compete on price.

If you want a pair of high end Nike's here how many shops sell them? 5? How many of those are part of the same parent company?

Does shops charging more suck? Yes. Is it surprising - not at all.

So in essence, it is because Kiwi shop owners feel entitled to rip off their customers?

The purpose of a shop is to MAKE MONEY. If people are willing to pay it, people will price their products at that level.

No-one is forcing you at gun point to go into a shop and buy something at a price you don't agree with. But clearly other people are going into those shops and buying those products.

I want lots of stuff too, but it costs too much, so I don't buy it.

If you ran a store would you sell everything as low as possible or would you try and make as much profit as possible?

edit: this isn't a kiwi thing - it happens at every level of distribution across almost every non-commodity product in pretty much every industry in every market where there are not price controls.

There are two ways to do it.

The NZ way seems to be to sell 1 item for $100.

The U.S. Way us is to sell 10 for $10.

It is disingenuous to choose the first option then complain when potential customers seek cheaper sources.

Lostja

239 posts

Master Geek

#1357811 3-Aug-2015 14:28

Geektastic:
wasabi2k:
Geektastic:
wasabi2k:
Geektastic: Further to my own post above, I note that a 10% duty and 15% GST STILL do not explain why a pair of running shoes which cost NZ$120 equivalent in the USA retail at NZ$265....

because economics.

A supplier will charge what the market is willing to pay as long as they are making money.

In happy clappy land everything would be sold at cost and everything would cost the same everywhere.

In reality, the majority of people buy shoes in a shop - that shop will charge as much as they can while still making sales.

In NZ you have fun things like small population and limited competition.

In America you have bazillions of people and lots and lots of shops selling the SAME goods, so you compete on price.

If you want a pair of high end Nike's here how many shops sell them? 5? How many of those are part of the same parent company?

Does shops charging more suck? Yes. Is it surprising - not at all.

So in essence, it is because Kiwi shop owners feel entitled to rip off their customers?

The purpose of a shop is to MAKE MONEY. If people are willing to pay it, people will price their products at that level.

No-one is forcing you at gun point to go into a shop and buy something at a price you don't agree with. But clearly other people are going into those shops and buying those products.

I want lots of stuff too, but it costs too much, so I don't buy it.

If you ran a store would you sell everything as low as possible or would you try and make as much profit as possible?

edit: this isn't a kiwi thing - it happens at every level of distribution across almost every non-commodity product in pretty much every industry in every market where there are not price controls.

There are two ways to do it.

The NZ way seems to be to sell 1 item for $100.

The U.S. Way us is to sell 10 for $10.

It is disingenuous to choose the first option then complain when potential customers seek cheaper sources.

Dreal

417 posts

Ultimate Geek

#1357904 3-Aug-2015 15:45

What about GST, income tax, the cost of shipping, duties, running costs, lease, sales volume (less here than overseas).

There is a lot that goes into pricing. Admittedly, sometimes its just the company charging as much as they can get away with. But that's not always the case, there are NZ companies that compete on price, or sell with low margins. Perhaps the only problem is there is not enough.

It's not like it's something you can regulate though. You vote for prices, locally, by shopping around locally for price. If you buy international, thats voting with your money against cheaper prices in NZ - because no company is being rewarded for having cheaper prices - if you automatically buy a cheaper price from a company overseas, with a larger sale volume/more buying power etc - then there is no carrot for the local businesses to chase in terms of your dollars.

What I do when I think something is over priced, is go through various stores until I find a good price. There are a lot of good cheap online tech stores in NZ for example.

Tap That - Great cheap tablets and tablet accessories. Windows and Android, NZ based

sir1963

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#1357924 3-Aug-2015 16:03

Dreal: What about GST, income tax, the cost of shipping, duties, running costs, lease, sales volume (less here than overseas).

There is a lot that goes into pricing. Admittedly, sometimes its just the company charging as much as they can get away with. But that's not always the case, there are NZ companies that compete on price, or sell with low margins. Perhaps the only problem is there is not enough.

It's not like it's something you can regulate though. You vote for prices, locally, by shopping around locally for price. If you buy international, thats voting with your money against cheaper prices in NZ - because no company is being rewarded for having cheaper prices - if you automatically buy a cheaper price from a company overseas, with a larger sale volume/more buying power etc - then there is no carrot for the local businesses to chase in terms of your dollars.

What I do when I think something is over priced, is go through various stores until I find a good price. There are a lot of good cheap online tech stores in NZ for example.

There is also a lot of "faux" competition.

For example Noel Leemings and Bond and Bond were the same thing, even had shops right next door to each other.
Farmers and Stevens are the same company

I knew of a local car dealer who had 4 yards, the same applies to bars, multiple bars in the same area can be owned by the one person.

And the reality is, we only have 2 different supermarket chains.

Multiple fast food franchises are owned by one Group

Bunnings/Mitre 10 "we will beat the competition" is a con, one will have product 12345A, the other 12345B, same thing different coloured washer somewhere, so not the same product
or they are the "exclusive" dealer, e.g. Ryobi in Bunnings so there can be no competition.

Dreal

417 posts

Ultimate Geek

#1357931 3-Aug-2015 16:11

sir1963:
Dreal: What about GST, income tax, the cost of shipping, duties, running costs, lease, sales volume (less here than overseas).

There is a lot that goes into pricing. Admittedly, sometimes its just the company charging as much as they can get away with. But that's not always the case, there are NZ companies that compete on price, or sell with low margins. Perhaps the only problem is there is not enough.

It's not like it's something you can regulate though. You vote for prices, locally, by shopping around locally for price. If you buy international, thats voting with your money against cheaper prices in NZ - because no company is being rewarded for having cheaper prices - if you automatically buy a cheaper price from a company overseas, with a larger sale volume/more buying power etc - then there is no carrot for the local businesses to chase in terms of your dollars.

What I do when I think something is over priced, is go through various stores until I find a good price. There are a lot of good cheap online tech stores in NZ for example.

There is also a lot of "faux" competition.

For example Noel Leemings and Bond and Bond were the same thing, even had shops right next door to each other.
Farmers and Stevens are the same company

I knew of a local car dealer who had 4 yards, the same applies to bars, multiple bars in the same area can be owned by the one person.

And the reality is, we only have 2 different supermarket chains.

Multiple fast food franchises are owned by one Group

Bunnings/Mitre 10 "we will beat the competition" is a con, one will have product 12345A, the other 12345B, same thing different coloured washer somewhere, so not the same product
or they are the "exclusive" dealer, e.g. Ryobi in Bunnings so there can be no competition.

Well thats true. There are a lot of umbrella companies around the world. 90% of the worlds media is owner by a few companies.

Supermarkets are the worst. Flip I believe is owned by another ISP (slingshot?). Skinny is owned by Spark.

But yeah, you do feel the umbrella company effect more when its a small market, and that defeats real competition.

Tap That - Great cheap tablets and tablet accessories. Windows and Android, NZ based

frankv

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#1357961 3-Aug-2015 16:29

Paracetamol is long off-patent - the TPP wouldn't affect availability or price of branded or generic common drugs like that. Some drugs are even cheaper than the subsidised prescription charge - cheaper to buy over the counter if not restricted than at the set price.

Bear in mind that the US has been constantly increasing patent times, to the extent that they're now 70 years after the inventor's death.

So any new drug will NOT be available patent-free until well after it is obsolete.

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nzkiwiman

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#1357964 3-Aug-2015 16:31

As I mentioned I think in the AU thread

No New Zealand distributors bring in what I spend 90% of my money on into New Zealand
Therefore they cannot complain that they are not getting my money

Bring in the product and sell it into stores in New Zealand, and then if I don't purchase it then you have a right to complain.

Dreal

417 posts

Ultimate Geek

#1357981 3-Aug-2015 16:46

nzkiwiman: As I mentioned I think in the AU thread

No New Zealand distributors bring in what I spend 90% of my money on into New Zealand
Therefore they cannot complain that they are not getting my money

Bring in the product and sell it into stores in New Zealand, and then if I don't purchase it then you have a right to complain.

I think for some reason your point is obscure to me. Do you mean DHL isn't new zealand owned, are you talking about logistics?

Tap That - Great cheap tablets and tablet accessories. Windows and Android, NZ based

frankv

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#1357983 3-Aug-2015 16:47

Geektastic:

So in essence, it is because Kiwi shop owners feel entitled to rip off their customers?

NO! It's because *Nike* feels entitled to rip off their NZ customers. Nike boosts the price in NZ to whatever they can get away with. Hence parallel imported Nikes are much cheaper.

wasabi2k

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#1357988 3-Aug-2015 16:51

There are two ways to do it.

The NZ way seems to be to sell 1 item for $100.

The U.S. Way us is to sell 10 for $10.

It is disingenuous to choose the first option then complain when potential customers seek cheaper sources.

Except in NZ there probably won't be enough people for your bulk volume model to work.

frankv

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#1357990 3-Aug-2015 16:52

wasabi2k: If you ran a store would you sell everything as low as possible or would you try and make as much profit as possible?

And this is why we need to work collectively to resist their efforts. Just as it is is the shopkeeper's right to make as much profit as possible, it is the consumer's right to pay as little as possible. And that includes the democratic process to make laws to prevent rapacious corporations from screwing up *our* lives to line *their* pockets.

cebo

71 posts

Master Geek

#1358055 3-Aug-2015 17:53

I used to work in retail and we would order books from the US. People would do the math around the exchange rate – convert the US price on the back to NZ and expect that is what they should pay. However, for us as a small player for the US wholesaler (although a big player in the NZ market) the discount they sold to us at was much smaller than they sold to US retailers.

Say a book had a RRP of US$10 – the wholesaler will sell it to the US retailer with a 50% discount. They pay US$5, and charge the US$10 RRP. The wholesaler would give us a 25% discount, so we were buying the book for US$7.50. Retail mark-up makes that US$15, plus freight and GST and you're now around $US20 – the price has doubled by the time it gets to New Zealand. I imagine a lot of retailers face a similar situation.

Batman

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#1358059 3-Aug-2015 17:59

yes i was going to suggest that the suppliers are also stinging our distributors for buying less.

sir1963

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#1358062 3-Aug-2015 18:02

frankv:
Paracetamol is long off-patent - the TPP wouldn't affect availability or price of branded or generic common drugs like that. Some drugs are even cheaper than the subsidised prescription charge - cheaper to buy over the counter if not restricted than at the set price.

Bear in mind that the US has been constantly increasing patent times, to the extent that they're now 70 years after the inventor's death.

So any new drug will NOT be available patent-free until well after it is obsolete.

AND there is the issue of a "Dispute".
This is where the drug companies can dispute the ending of the patent, this forces everyone to continue buying the drug from them rather than getting a generic version. And they can keep on setting up disputes which can take years to "resolve".

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