Do retailers and wholesalers rip us off?

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#2170100 30-Jan-2019 11:49

rb99:

You did say mainly, but fairly sure I won't be self importing a washing machine...

That's the interesting part. Why not? If the WM here was $1200 but online with GST and freight was $740, why not? $500 food processor is $269 online, why not?

Now we wont be buying houses, sausage rolls, haircuts online, nor the DIY bits I need tomorrow, but you might be surprised how far online could go. Manufacturers of your WM in China or Belgium or Germany might make it easy. They wont need a shop they just need a website to take orders. If one manufacturer of any type of good did that, the others have to follow.

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#2170136 30-Jan-2019 12:54

I would hesitate to guess that a $1200 washing machine would get a 30% discount at one of Noel Leeming's MASSIVE 30% OFF ALL WHITEWARE sale at some point... meaning it's $840 including GST.

For CGA protection and someone to call when it stops working - I'd pay the difference.

It pays to remember that people have always looked for the cheapest price since day dot. Whether it's bartering with a trader, importing themselves, buying through postal based retailers (remember the massive ads in magazines and newspapers?) etc.

It's just nice and convenient via a PC / tablet, especially if freight doesn't cripple the deal.

However, there are typically checks and balances like delays in delivery, extra taxes being levied, 'will not ship to NZ', on-shipper fees, no local warranty or CGA etc. The market will correct - sure, some categories will disappear all together.

But what people miss is that businesses can ADAPT. They have done for centuries and will continue to do so. Those who don't die, those who do, won't.

Remember back in the day (and in Red Dead Redemption 2) only the wealthy drove around in horse and carts?

Then everyone had them...

Then the wealthy had cars for travel...

Then everyone had them... while the wealthy flew in planes.

Then everyone flew in planes... and now the wealthy own horses again!

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#2170142 30-Jan-2019 13:07

Dunnersfella:

I would hesitate to guess that a $1200 washing machine would get a 30% discount at one of Noel Leeming's MASSIVE 30% OFF ALL WHITEWARE sale at some point... meaning it's $840 including GST.

For CGA protection and someone to call when it stops working - I'd pay the difference.

It pays to remember that people have always looked for the cheapest price since day dot. Whether it's bartering with a trader, importing themselves, buying through postal based retailers (remember the massive ads in magazines and newspapers?) etc.

It's just nice and convenient via a PC / tablet, especially if freight doesn't cripple the deal.

However, there are typically checks and balances like delays in delivery, extra taxes being levied, 'will not ship to NZ', on-shipper fees, no local warranty or CGA etc. The market will correct - sure, some categories will disappear all together.

But what people miss is that businesses can ADAPT. They have done for centuries and will continue to do so. Those who don't die, those who do, won't.

Remember back in the day (and in Red Dead Redemption 2) only the wealthy drove around in horse and carts?

Then everyone had them...

Then the wealthy had cars for travel...

Then everyone had them... while the wealthy flew in planes.

Then everyone flew in planes... and now the wealthy own horses again!

I actually said If the WM here was $1200 but online with GST and freight was $740

Not all businesses can adapt when they compete with online, so they will fall by the wayside. As long as no one complains then that's fine with me

Adapting means slash prices, that wont work, retail is hardly a money makers dream right now let alone when you slash prices yet still have brick and mortar to pay for which online doesn't. Easier to sell up

Fred99

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#2170146 30-Jan-2019 13:21

Dunnersfella:

Then everyone flew in planes... and now the wealthy own horses again!

... and if you feed a horse enough oats, some will pass through to the road for the sparrows.

rb99

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#2170149 30-Jan-2019 13:23

tdgeek:

rb99:

You did say mainly, but fairly sure I won't be self importing a washing machine...

That's the interesting part. Why not? If the WM here was $1200 but online with GST and freight was $740, why not? $500 food processor is $269 online, why not?

Now we wont be buying houses, sausage rolls, haircuts online, nor the DIY bits I need tomorrow, but you might be surprised how far online could go. Manufacturers of your WM in China or Belgium or Germany might make it easy. They wont need a shop they just need a website to take orders. If one manufacturer of any type of good did that, the others have to follow.

My limits are probably quite arbitrary. For a washing machine, or anything big / expensive, I like to go to a shop and have a prod and a poke and stand there for three hours comparing the different models (yes, even washing machines). And I'd only buy it on a 25% (approx) off sale as well. OTOH I've bought smaller, but still not cheap things online, mostly laptops actually, but they've either been local online suppliers, or the biggies of the industry (Dell, Lenovo). Just don't think I could spend $1500 on a laptop from a small retailer on Aliexpress. Think CGA / returns comes into there somewhere.

Other stuff I get from overseas tends to be either cheap or unavailable, e.g. blurays and Amazon Fire / Echo type stuff respectively.

“The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.” -John Kenneth Galbraith

rb99

tdgeek

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#2170151 30-Jan-2019 13:27

rb99:

tdgeek:

rb99:

You did say mainly, but fairly sure I won't be self importing a washing machine...

That's the interesting part. Why not? If the WM here was $1200 but online with GST and freight was $740, why not? $500 food processor is $269 online, why not?

Now we wont be buying houses, sausage rolls, haircuts online, nor the DIY bits I need tomorrow, but you might be surprised how far online could go. Manufacturers of your WM in China or Belgium or Germany might make it easy. They wont need a shop they just need a website to take orders. If one manufacturer of any type of good did that, the others have to follow.

My limits are probably quite arbitrary. For a washing machine, or anything big / expensive, I like to go to a shop and have a prod and a poke and stand there for three hours comparing the different models (yes, even washing machines). And I'd only buy it on a 25% (approx) off sale as well. OTOH I've bought smaller, but still not cheap things online, mostly laptops actually, but they've either been local online suppliers, or the biggies of the industry (Dell, Lenovo). Just don't think I could spend $1500 on a laptop from a small retailer on Aliexpress. Think CGA / returns comes into there somewhere.

Other stuff I get from overseas tends to be either cheap or unavailable, e.g. blurays and Amazon Fire / Echo type stuff respectively.

Fair enough. In that case when the thread is about retailers ripping us off, I'd like to know why some keep mentioning and comparing online purchases, as if they are a direct option

Kyanar

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#2170290 30-Jan-2019 16:30

SATTV:

You assume the local supplier pays they price as the UK supplier for the same part.

The local supplier will only get one pallet and that will last them a year or two ( depending on what the suppliers MOQ & MOV is )

The UK supplier could be doing a container a month of parts so of course gets a way better price.

So what I'm hearing is that AU/NZ are being ripped off, because if the manufacturer can sell it to a UK distributor who can sell it to that UK retailer who can sell it to that NZ consumer at that price, there is absolutely no reason that manufacturer cannot sell it to an NZ distributor who can sell it to an NZ retailer who can sell it to that NZ consumer at that price. None. Economies of scale doesn't apply, because the last mile of that reference transaction was a B2C transaction, shipped across the planet!

The real biggest problem, though, is protectionist manufacturer/distributor combos, where they mandate that it can only be purchased from Distributor X (who marks it up 600%) or the manufacturer will refuse to deal with you in a fault situation - the old Apple/Renaissance deal comes to mind. The CGA/ACL makes short work of them if you challenge it, but it's a battle, that usually requires the intervention of the regulator.

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#2170291 30-Jan-2019 16:37

tdgeek:

Fair enough. In that case when the thread is about retailers ripping us off, I'd like to know why some keep mentioning and comparing online purchases, as if they are a direct option

OP was questioning the price of a starter motor for his lawnmower.
That's an item that generally has a large mark-up, and it may be worth the wait for him to purchase (a much cheaper one) online.

This spring the shut-off solenoid failed on my ride-on lawnmower (a friend is mowing my lawns for me)
The NZ Excel dealer wanted $295 +GST for a new one.

A shut off solenoid isn't essential, I emailed my friend directions on how to wire the shut-off lever in the 'on' position to continue mowing the lawn.
(it was, however, more dangerous - if he fell off, the seat interlock wouldn't have shut the engine down) He completed mowing the lawns.

I ordered one on AliExpress - for $55 - which arrived 2 weeks later and was installed just in time to mow the lawns again.

Last week he had just started mowing my lawn again and the mower deck belt failed.
I keep a spare but most of my stuff is now locked in a container and he was unable to locate it.

The NZ dealer wanted $170.90 +GST for a replacement belt. Over here I can buy (an OEM) one for C$39 (NZ$43)
However, surface mail takes 6 weeks, and to 3-day courier it to NZ was well over $100.
The lawn would be an un-mowable jungle in 6 weeks, so I paid the $195 odd dollars for one already in the country.

I'm not complaining I got 'ripped off' for the belt, because I willingly paid that price for the convenience of having it the next day.

Fred99

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#2170474 30-Jan-2019 21:50

Bloody hell - that much for mower parts, when you can buy a goat on TM for $100?

MichaelNZ

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#2171903 2-Feb-2019 16:11

Lias:

Couldn't disagree more. If your business can't import goods in bulk from the manufacturer and get them to customers in country for less than a customer can purchase retail overseas and self import, then your business exists solely to rip off and gouge customers. Enjoy that while it lasts, but I'd be job hunting if I was you, because progress is coming and it ain't gonna be pretty.

LOL.

When I want something I want it now and I am quite happy to support a local company. People with your attitude would never be a customer anyway so suppliers are quite happy to ignore you and your penny pinching ways. And the world still goes round.

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MichaelNZ

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#2171905 2-Feb-2019 16:16

Aliexpress is full of fakes and often crappy ones at that. The sort of companeis who sell on Aliexpress are the lowest denominator who will write any cliams on anything. Doesn't mean it's the same article.

When I buy something I want to know I am getting the real deal and I want a company who I can hold responsible.

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MichaelNZ

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#2171907 2-Feb-2019 16:21

sbiddle:

Why do you automatically assume that a wholesaler in NZ is paying less than the retail price in the US? In many cases this is certainly not the case.

Many distribution models are volume based, and prices paid by distributors in smaller countries can be similar or even more than retail prices paid elsewhere.

Last year I looked at importing products made by a well known and reputable tech brand, which had formally been sold (but now dropped) by a well known local IT distributor/wholesaler. My buy price for the items ex-Hong Kong was more expensive than retail in the USA.

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#2171927 2-Feb-2019 17:31

tchart: I was behind someone at the checkouts at Mitre 10 over the holidays. I saw their total sale amount and then he said he had a trade account - the total dropped by more than 50%.

I'm sure that if the items purchased for a job that he wouldn't be passing on that discount.

Yes I'm aware that markup would be different on a range of items but he had a range of items and a +50% discount makes it seem like normal consumers are getting ripped off.

How much $$$ does he spend per month at Mitre 10? As some builders can easily spend $100K per month on materials. Meaning that they can easily get big discounts. Also the discount amount is often not a fixed% off. Different product lines normally have different discounts applied. His contract with Mitre 10 would also have a clause stating that the CGA doesn't apply to purchases made through the account (legal as the account would be in the name of a company).

That tradie would also be buying, installing/ using the items on a customers house upfront, then getting the customer to pay later. Meaning he is both taking the risk of the customer not paying, while he would still have to pay for the items himself. And he would be giving the customer a loan for the value of the items. And he would also have to pay himself for any CGA claims. Do you know of any banks that will give me a loan without charging any interest or fees? - Nope. So what is so bad about a tradie making a margin to cover their risks, and earn a reward for their hard work?

If you are earning enough money from your own employment to spend money on luxuries. Then you are in effect making a profit from your employer. And you would be able to do the same job for lower pay.

MichaelNZ

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#2172016 2-Feb-2019 21:37

An important thing to keep in mind when doing price comparisons is the world is awash with counterfeits from China. This is most blatantly obvious when you look for premium tools from European or Japanese brands who manufacture in Europe / Japan, and then do a search on Aliexpress for the same brand. Some of the counterfeits are so brazen they will even reference awards won by the original brand and use photos stolen form their website.

By way of example I have the very popular Haako 936 soldering station. It's the genuine article and is made in Singapore, as Haako did back then. Haako now manufacture in Japan, except for their entry models which are made in Malaysia.

Despite they have never manufacturered in China, there are plenty of "China 936's" available. They work, but by all accounts in Youtube reviews are of poor quality compared to the original highly-reputable product.

I am now eyeing up a mid-range FX951 which is made in Japan, to replace my 936.

Legit product in NZ = $498 incl GST

Legit product in the USA US$269.77 (NZ$ 391.23)

Counterfeit - around US$40 (NZ$ 58)

So once I deduct the GST from the NZ$ option because I can claim this back, the difference in buying locally is $41.81, or less than 10%.

My 15-20 year old 936 (I can't remember when I bought it) is still going perfectly like it was when new. I am only seeking to get the newer model because this better suits my needs moving forward. With this in mind I am quite happy to buy this from a local company and pay the price.

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Lias

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#2173096 4-Feb-2019 21:23

MichaelNZ:

When I want something I want it now and I am quite happy to support a local company. People with your attitude would never be a customer anyway so suppliers are quite happy to ignore you and your penny pinching ways. And the world still goes round.

Your wrong, but you keep wasting your money, I'll keep saving mine.

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