Aredwood: This thread is an eye opener for me. Im a self employed plumber / gasfitter. Which means I install alot of things like hot water cylinders which are both expensive and which are expected to last a long time. The thought that someone could have a valid claim against me for the entire replacement cost of a 10 year old hot water cylinder is scary. Especially as alot of cylinders are only guaranteed for 5 years by the manufacturer. And that only covers the cylinder itself. The element and thermostat normally only have a 1 year guarantee.
I will now be charging a minimum 20% margin on all major items like hot water cylinders unless the customer is a business. And will be steering customers to Mitre 10, Bunnings ect to directly purchase things like hot water cylinders. So I won't have to cover the CGA risk on things I have no control over. Yet the silly part is if I were to copy property developers and regularly liquidate my company and setup another one. (once per year maybe) Then I won't have long term CGA risk.
I Wonder if more business will spring up that either only sell to other business's. Or will charge high retail prices and then offer free accounts with big discounts to other business's. (2 tier pricing).
The CGA should be changed so Sellers / Manufacturers have to specify the "Half life" of the item they are selling. (Age where they expect that 50% of their product would have suffered a fault that the manufacturer doesn't intend to be repairable) And then require that should an item Suffer an unrepairable fault before it's half life. The seller will only be liable to cover a % of it's value based on how much longer until it's half life. (An item with a 10 year half life fails in year 5 - 50% of it's value is payable. Same item fails at year 9 - 10% of it's value is payable.) I think this will be far better than simply saying items must last a reasonable amount of time. As it makes it clear exactly how much of a guarantee must be offered, Will be an in your face way of telling people that the cheap item they are buying is exactly that - cheap. And will make it easier for manufacturers / sellers to encourage people to buy better quality products. The biggest problem with the current system is that almost every dispute over age of produce can only be settled by litigation.
To be honest if you're not making a 20% margin then your business isn't particularly sustainable or able to grow past a one man band. 20% is not a particularly high margin if you are shelling out for major plant.