Do retailers and wholesalers rip us off?

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#2173151 5-Feb-2019 05:26

Whether we are being price gouged is not totally clear. What is abundantly clear is that virtually every laptop that you find on sale in the USA for say $200.00 costs $400-$500 in nz dollars if bought in NZ. Just a few days ago Noel Leeming had a laptop on sale for $499.00 they claimed the price had a saving of $300.00 so originally $800.00. Same laptop in the USA could be found on Amazon for US $212.00! And pricing like this is repeated over and over. Hard to justify with the Kiwi dollar hovering close to 70c to the US dollar.

JimmyH

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#2173704 5-Feb-2019 21:27

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.

I used to work for an importer, one example from my boss was that it was cheaper for him to buy a bunch of Maglights from wallmart than buy them from the local suppler. We were the also the distributor of a brand of semiconductors ( same boss different company ) and it was cheaper for us to buy a lot of our components from an autherised distributor in Singapore, the downside was that it did not go against our sales, once we dipped below a certain level we would lose the agency. When you lose the agency you lose support.

There are so many factors involved.

Simply put NZ is a small fish in a very big pond and we will never have the volume.

Also manufacturers in most cases do not want to deal with end users and that is why they have distributors.

Manufacturers may also dictate a minimum stock hold you must keep, that costs money.

Distributors will often consolidate orders to A - keep freight costs down & B - The manufacture does not want to deal with piddly little orders.

One of my colleagues when to work for a lighting company, he had an order for 750,000 light bulbs, he thought it was an amazing order, the manufactures responce was to buy them from a retailer as the order was too small.

There are many factors involved when dealing with an authorised channel, I dont believe in most cases we are being ripped off ( Briscoes & the like excluded ), we are just a small fish in a big pond.

John

This is interesting, but ultimately irrelevant.

When I am looking at whether a local price is attractive or "fair" I couldn't give two hoots about the stock holding issues of NZ distributors, how a manufacturer may want to supply NZ, or whether NZ retailers have to charge more because of their higher cost structures, and whether distributors add value or cost. I also don't care if the shareholder making a profit happens live in Parnell, Delaware or Shanghai. I simply look at what the local price is, and how it compares to what I can source the item from elsewhere. If the local price is comparable, or slightly higher, then I'm likely to regard it as a "fair" price and buy local - esp if I want convenience etc. However, if the price is several times what I can land the item for if I import it myself, then I am unlikely to regard the price as "fair" and buy locally.

If cost structure issues mean that the local retailer can't be price competitive with offshore sellers and remain in business than that's unfortunate (for the retailer), but isn't my problem. It's the NZ retailer's problem to figure out how to solve their supply chain and cost structure issues and be competitive. Some will manage this, finding innovative solutions, and will prosper. Some won't manage this, and will fail. And good riddance to them. Markets can be Darwinian like that - which is in consumers interest.

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#2173708 5-Feb-2019 21:36

JimmyH:

Markets can be Darwinian like that - which is in consumers interest.

If you are moaning about the price you are not wealthy enough to be immune from the fallout of your own philosophies.

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Handle9

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#2173710 5-Feb-2019 21:44

I buy from local and overseas channels. I make a value decision based on the cost localy as well as the possible support requirements. I don't have a problem buying overseas if I can see value.

What I do have an issue with is consumers buying overseas but then getting upset when they can't get support locally or making claims they are being ripped off locally.

Generally they aren't being ripped off, they are just buying from a different channel, which has a different cost and service basis. Choose the channel that makes the most sense for you, just understand the pros and cons and leave the emotive nonsense at the door.

Geektastic

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#2173719 5-Feb-2019 22:37

Handle9:
I buy from local and overseas channels. I make a value decision based on the cost localy as well as the possible support requirements. I don't have a problem buying overseas if I can see value.

What I do have an issue with is consumers buying overseas but then getting upset when they can't get support locally or making claims they are being ripped off locally.

Generally they aren't being ripped off, they are just buying from a different channel, which has a different cost and service basis. Choose the channel that makes the most sense for you, just understand the pros and cons and leave the emotive nonsense at the door.

Of course, quite a lot of manufacturers offer worldwide warranty, so support can still be obtained, just in s different way.

Handle9

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#2173742 5-Feb-2019 22:42

Geektastic: Of course, quite a lot of manufacturers offer worldwide warranty, so support can still be obtained, just in s different way.

Of course quite a lot of manufacturers don't as they rely on local representation to provide that service. If you buy from off shore you should understand what you are buying and not cry that you can't get support.

If the manufacturer does offer worldwide warranty that's great.

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tdgeek

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#2173835 6-Feb-2019 10:35

JimmyH:

If cost structure issues mean that the local retailer can't be price competitive with offshore sellers and remain in business than that's unfortunate (for the retailer), but isn't my problem. It's the NZ retailer's problem to figure out how to solve their supply chain and cost structure issues and be competitive. Some will manage this, finding innovative solutions, and will prosper. Some won't manage this, and will fail. And good riddance to them. Markets can be Darwinian like that - which is in consumers interest.

There are no solutions. They cant solve the supply chain as are too small, nor cost structures, as they should already be operating on the lowest costs they can manage, There isn't really any innovative solutions. Being competitive is based on other local retailers.

How this will evolve over time is that certain retail sectors will shut down as sales have reduced. There will be no option to buy with CGT protection, or to look at the product, or to try it on, some or many retail sectors will be online only. The postal sector will change too, that will be an extra cost. When you get a product delivered by courier that came form China, how much does the courier earn? Nothing I believe. So maybe once that's solved, many retail employees will be couriers.

MichaelNZ

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#2173839 6-Feb-2019 10:43

Cheap stuff from China through Aliexpress is only cheap at the cost of -

1. Your local postal service who is loosing money delivering it (Why do you think NZ Post increases their prices 10% per year?)

2. Jobs in your local community which you - if you are lucky enough to still have a job - will be compensated by you through higher taxes and less expenditure for your business / employer

3. The environment

Arbitaging this by working in IT (as many here do) and paying the peasents who have blue colar jobs poorly is not a sustainable economic plan either. It is just as likely to be you being outsourced next - how will you feel about cheap stuff then?

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tdgeek

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#2173850 6-Feb-2019 11:19

Another way to look at it, is if online is just a natural change. Supply and demand. Retail may just be transitioning, we will still have retail but a different retail. If you want a nice brand grill, you will have to order it because its not available here. That may seem a long way off, but todays generation, the young adults are frequent online purchasers, but so are many others. I cant buy a good brand grill from The Warehouse. The Warehouse only offers cheap stuff from China, so their prices aren't too bad compared to online. Briscoes went out of business due to low sales (pun not intended but funny). So to buy this good quality brand I need to buy from Germany or Holland or the US. I might have to pay real freight, and its on one item. Plus GST. Plus local courier. No CGT, and it may not be much if any cheaper than Briscoes 30% off sale. I cant look at it to make sure its the quality that the webpage implies it is.

Pretty inconvenient

If you tend to buy cheap crap, it probably works for you, if you like to buy good stuff, it probably wont maybe

tdgeek

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#2173851 6-Feb-2019 11:24

On the other hand, what are most online purchases made up of?

$2 phone cases? $3 HDMI cables? That ride on mower starter someone mentioned earlier? (i.e. expensive niche items)

Are common things like home appliances, clothes, shoes, larger sizes home audio and electronics, tools, and day to day stuff bought online much?

The other question is, is online mainly used to cheap sh#t, or is it often used for quality goods?

MichaelNZ

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#2173858 6-Feb-2019 11:37

Online can be a good place to get quality items but the price is often high and delivery not subsidised.

Recently, I was looking at purchasing a 5 or 6 piece set of precision electronics pliers from Germany. After looking at some options from Bernstien Werkzeugfabrik and Knipex, I decided the 6-piece Knipex set was my preferred option but I just couldn't get my head around the price - around $500+GST, which I was able to get reduced to closer to $400+GST.

During my resaerch I discovered an allegation that Knipex did not make their own pliers - nor did Bernstien Werkzeugfabrik which was a lot cheaper than Knipex - and both were made by Schmitz in Germany.

I went to Schmitz website and found the same 6-piece set (just different handle colour) for US$169 (Around NZ$250) and free postage, so basically 1/2 the price.

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Rikkitic

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#2173868 6-Feb-2019 12:03

MichaelNZ:

Cheap stuff from China through Aliexpress is only cheap at the cost of -

1. Your local postal service who is loosing money delivering it (Why do you think NZ Post increases their prices 10% per year?)

2. Jobs in your local community which you - if you are lucky enough to still have a job - will be compensated by you through higher taxes and less expenditure for your business / employer

3. The environment

Arbitaging this by working in IT (as many here do) and paying the peasents who have blue colar jobs poorly is not a sustainable economic plan either. It is just as likely to be you being outsourced next - how will you feel about cheap stuff then?

This is a narrow and unjust representation of the reality. Many of us who buy overseas do so because retailers here really do rip off, at least some of them for some things. The NZ way seems to be 'whatever the market will bear'. Some price differences are justifiable because of our location and small market, but a lot are just a holdover from the bad old days when people really didn't have a choice.

I do not work in IT. I am a pensioner, and not one of those who some seem to think are living it up on multiple incomes and vast savings. My pension is my only income. I buy what I can from China because it is far more affordable for me than anything local.

I don't understand the environmental argument, which is pure BS fog. Or do you think laptops, smart phones, TVs, cars, whatever, are manufactured in New Zealand? Anything available here, other than milk and sausages, has made the same overseas journey as anything I import.

There is an element of common sense to this. I don't buy big ticket items overseas because the risks outweigh the advantages. Most of my purchases are under $100. Some of it has been rubbish, but most performs reasonably well. The gains have been greater than the losses.

My biggest purchase, not from Ali but from Amazon, was a new notebook. I bought it overseas because it wasn't available here. The range of choice in New Zealand is also limited, because retailers don't want to carry things that may not have a high turnover. So we mainly get the limited mass market stuff, which is also no guarantee of quality.

I resent the insinuations you make about overseas shoppers. They are insulting and untrue. Those of us who prefer Ali and Amazon do so for a reason. If NZ retailers want to stay in business, they need to deal with today's reality instead of pining for the past.

Plesse igmore amd axxept applogies in adbance fir anu typos

MichaelNZ

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#2173872 6-Feb-2019 12:07

Rikkitic:

If NZ retailers want to stay in business, they need to deal with today's reality instead of pining for the past.

Great idea. They should stop paying tax here, employing people here and move overseas. Then there will be less tax to pay for your pension. Talk about biting the hand which feeds.

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MCONZ

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#2173915 6-Feb-2019 13:04

My brother was looking to purchase a part for the front window de-mister in his Mercedes.
He looked around here in NZ and the cheapest quote he got was a shade under $500, so of course he went online and found the same part on Amazon for $180 NZ landed here, so he purchased and and he thought win win..

It arrived and included in the box was a invoice, which I guess was mistakingly put in there by the manufacturer (In China) which had the item cost on there and shipping charges of $23 US total.
As you can imagine he wasn't happy about it at all and contacted Amazon asap, and they were very surprised he got that invoice and after a few back and forth emails etc, they gave him a refund of part of his initial purchase cost ($105 NZ).

Quite interesting I thought.

Also for the fact that some 'Genuine' Mercedes part are so cheap and made in China.

MichaelNZ

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#2173952 6-Feb-2019 13:09

MCONZ:

Also for the fact that some 'Genuine' Mercedes part are so cheap and made in China.

Why does he believe it is genuine? Some counterfeits are audatious.

(removed remainder of text after having my info corrected)

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