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2617 posts

Uber Geek
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  # 962544 7-Jan-2014 16:04
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Where do you get that from?

In places like Briscoes, or furniture shops, that may be true. Furniture stores have to hold a lot of valuable stock for a long time (low stock turn) and we all know what Briscoes tactics are - when was the last time you bought anything from there that wasn't on sale?

I can guarantee that the RRP of a TV is nowhere near double its cost price.

The cost price of an iPhone to a retailer is about $30-40 less than the RRP (meaning about 3-4% for the retailer). iPads and iPods not much better as a percentage, lower in most cases in $$ terms.

It costs money to have stores in malls, on streets, employing people that pay taxes and keep the economy going round.

I think you may find that most retailers profit margins are only around 10-20% (20% would be excellent, and any electronics retailer would crawl over glass for it). If that is huge, grossly high or outrageous to you, then I do not know how any of them would even be able to open their doors in your world.

Shoes and clothes have huge markups. I bought some North Face trainers that are almost $150 more here than the same shoes in the USA. Likewise, my brother can buy Levis in the USA for $25 that cost $150 here.

Surefire flashlights - I bought one in the USA for $145 that retailed through the NZ agent at over $700!

Direct price comparisons cannot be made, one needs to check, origin taxes, cost of shipping, exchange rates applicable at time of purchase, import duties and GST.

There are some products that do seem to have higher than expected prices but that is not the norm.

In principle yes, but for a flashlight:


  • origin taxes - there shouldn't be any
  • cost of shipping - should be pretty negligible for a small item like a flashlight (esp for a retailer importing a consignment and spreading the cost across a number of units)
  • exchange rates applicable at time of purchase - that can work both ways, and I can't see how it would account for more than a small fraction of a circa 400% price differential (based on US/NZ=0.83)
  • import duties - there aren't any on US flashlights
  • GST - 15%.
The margins in NZ tend to be pretty outrageous. It's not always the retailer, often it's the "exclusive" distributor that is the problem. But either way, we get gouged.

2617 posts

Uber Geek
+1 received by user: 1287

  # 962548 7-Jan-2014 16:11
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Mightyape and fishpond export their items to other countries too which includes to the US. (customers there can doge their GST too)

Many countries don't have a value added or sales tax, we've only had one for 28 years which isn't that long...

How is removing a tax more complicated? If anything it's less complicated.

GST is an efficient taxation method and makes the tax regime fairer. It is a cheaper tax to administer. 

I actually disagree. I don't think it is fairer. One already pays income tax. The companies ready pay income tax. What exactly is GST but taxing money we already paid tax on? Even more, income tax is based on levels of income, while Get taxes everyone, poor or rich.

Well kind of, but it's still a relatively "fair" tax.

1.  The income tax point is a red herring. Income taxes would be a lot higher without GST, assuming the Govt wanted to maintain the current level of services/spending.

2.  It's fair in the sense that it's hard to dodge. So people with good accountants and those with untaxed income (eg drug dealers) still have to pay something when they spend their income. Also, companies (eg Google) that pay next to no income tax on their NZ activities because they are domiciled elsewhere at least have to collect and remit GST on their billings.


332 posts

Ultimate Geek
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  # 962555 7-Jan-2014 16:18
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The income tax point is a red herring. Income taxes would be a lot higher without GST, assuming the Govt wanted to maintain the current level of services/spending.

I think you mean: "assuming the Govt wanted to maintain the current level of perks, overseas trips, and useless pet projects". ;)

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  # 962623 7-Jan-2014 18:38
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It boggles my mind why retailers in this country have such a high profit margin. The price of everything is in most cases double the cost.

Which retailers have high profit margins in NZ?

I don't see it, you can't ignore economies of scale... large US retailer buying x million units of product x gets  far far better price per unit from the manufacturer/wholesaler than the small NZ retailer buying 10k units.

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