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Topic # 132355 18-Oct-2013 20:38
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Sooo, I just received the below flyer in the mail.. I thought the fine print here was quite something.

 

 

It states the 'cost' price is the average invoiced purchase price and includes GST.

 

 

So unless I'm missing something, that means they've taken said average invoiced purchase price, added their 10%, calculated the GST, removed the 10%, and added the calculated GST to their average invoiced purchase price to make said 'cost' price for this flyer.

 

 

Strikes me as deceptive... your thoughts?

 

 

 

 

 

 


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  Reply # 917208 18-Oct-2013 21:03
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Hi, 

I work for Noel Leeming Group - I will explain.

Noel leeming have different sales every week and sell a product at a different price based on the sale price.

Our Suppliers do this to us to.

example - 1 day a tv could cost us $1000 next day it could cost us $950

We are a nationwide business not a owner operated business type - we have a national head office.

A owner operator could calculate a cost price per pallet - we choose not to - wecalculate / average this out nationwide.


because we have 90-odd stores we determine this cost price on a average - this is the average cost price for an item


So you pay the "average cost price" +10% .

Does this clear it up for you?


Cheers,

Steve




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  Reply # 917210 18-Oct-2013 21:16
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It always pays with these types of deals to check that the deal actually stacks up - most electronics have single figure markups often around 5% and sometimes less - so check prices at other stores before committing.

 
 
 
 


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  Reply # 917211 18-Oct-2013 21:20
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nitrotech: It always pays with these types of deals to check that the deal actually stacks up - most electronics have single figure markups often around 5% and sometimes less - so check prices at other stores before committing.


I Agree - Some products are like this, but others will benefit from a deal like this.

Always shop with research behind you, Pricespy is a good tool to have with you when shopping for electronics. (iOS and Android App available)


Cheers,








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  Reply # 917212 18-Oct-2013 21:23
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I've also seen fineprint which mentions the cost price is either for single unit price (i.e. doesn't include bulk discounts - and what nationwide chain store would order one tv) or it excludes supplier rebates which is a similar thing

Either method allows them to sell at "cost" and still make a profit.

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  Reply # 917223 18-Oct-2013 22:13
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Yes, you won't necessarily get a better deal with this type of promo, over other promos, so shop around before hand to get the prices. Pricespy is a good start. Also other stores will often price match. NL only do price matching, if they have the actual product instore, and for some products, they are never stocked in stores, so can never be price matched.

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  Reply # 917242 18-Oct-2013 23:12
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Always shop with research behind you,

Caveat emptor has always been, and will always be, sage advice.

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  Reply # 917244 18-Oct-2013 23:43
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Not arguing with the advice re shopping around but I have taken advantage of the Noel Leemings deals like this a lot in the past and have saved anywhere from 5-40% on the retail price at NL and similiar retailers. Some items like computers, cells, tv's etc had small discounts, got some really good deals on whiteware (upwards of 40% off) and heat pumps though. A deal well worth taking advantage of.

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Reply # 917265 19-Oct-2013 07:25
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Nice explanation by sdavisnz

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  Reply # 917269 19-Oct-2013 08:08
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Margins are obviously tight on consumer electronics. Not so much on white ware.
I am in the market for a replacement BR/HDD recorder, specifically the Panasonic -835 one that came out a couple of months ago ( RRP $999). NL with the above deal quoted $835, at the same time JBHF had it for $777, which must mean JBs were selling near cost price. Even in the Labour Weekend 20% off sales that is still better.




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  Reply # 917276 19-Oct-2013 08:53
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Margins on consumer electronics are very small. It's accessories where there can often be double (and occasionally triple) digit margins.

One thing to also factor in is that the "cost" price is a hard thing to actually determine. Supplier rebates are the norm in the supermarket world and very common in the consumer electronics area. This means the retailer buys a product for $X but is given a rebate of $Y when they sell a product. Sometimes this rebate may vary depending on the volumes sold. In the supermarket industry it's why products are often on special well below their normal cost.

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  Reply # 917574 19-Oct-2013 23:11
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Also cost is not what they buy the units for, it will have loads of expenses pro-rated across it based on any number of methods that accountants like to use, like a truck shipment will usually be sorted out on the weight/volume of it against the total cost of the truck run, there is expenses for things like floor space and warehousing etc.

If the company has multiple divisions, the cost will also include payments made to other divisions in the company, for example if the warehouse is a seperate location with staff etc, there may be an entry and exit cost for the warehouse that is then charged to the retail division etc.

There is so much scope for a crafty accountant to make the cost higher that it is a meaningless offer for a promo like this. I would expect that cost+10% would be more than a normal retail price.




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  Reply # 917668 20-Oct-2013 11:18
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Dingbatt: Margins are obviously tight on consumer electronics. Not so much on white ware.
I am in the market for a replacement BR/HDD recorder, specifically the Panasonic -835 one that came out a couple of months ago ( RRP $999). NL with the above deal quoted $835, at the same time JBHF had it for $777, which must mean JBs were selling near cost price. Even in the Labour Weekend 20% off sales that is still better.


JB can also get much better wholesale pricing as they are Australia and New Zealand so they have much larger scale, and can buy in greater volumes.

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  Reply # 917672 20-Oct-2013 11:33
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I bought my Galaxy S4 on one of these deals just after it was released here and saved quiet a lotso was very happy. A frioenmd bought a camera and touch screen laptop and likewise saved a lot on what tghey had priced up the week before and also checking pricespy.





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  Reply # 918836 20-Oct-2013 20:40
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Kyanar: 

JB can also get much better wholesale pricing as they are Australia and New Zealand so they have much larger scale, and can buy in greater volumes.


I doubt that's true in this case, the freight / hassle involved with 'forwarding' stock into NZ when there's already a local NZ Panasonic office would make purchasing out of Aussie pointless. Both Noel's and JB's are buying for the same sized market in NZ, and as they will be buying from Panasonic NZ (no longer the NARTA group as Panasonic left that recently (according to this article), maybe Noel Leeming's simply hasn't managed to negotiate as good as a deal that week?
Or, they're looking to make a profit, and not grab market share.

http://www.current.com.au/2013/02/25/article/Panasonic-New-Zealand-set-to-leave-Narta-buying-group/TYJCGEDKOA.html

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  Reply # 918944 21-Oct-2013 09:20
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sdavisnz: Hi, 

I work for Noel Leeming Group - I will explain.

Noel leeming have different sales every week and sell a product at a different price based on the sale price.

Our Suppliers do this to us to.

example - 1 day a tv could cost us $1000 next day it could cost us $950

We are a nationwide business not a owner operated business type - we have a national head office.

A owner operator could calculate a cost price per pallet - we choose not to - wecalculate / average this out nationwide.


because we have 90-odd stores we determine this cost price on a average - this is the average cost price for an item


So you pay the "average cost price" +10% .

Does this clear it up for you?


Cheers,

Steve


Not really. Why do things cost different amounts in different stores if you are a national business?

If I visit John Lewis in London and a TV costs £900, it will cost the same in any John Lewis store from Lands End to John O'Groats!





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