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358 posts

Ultimate Geek


# 245310 28-Jan-2019 20:04
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Do NZ retailers and wholesalers rip us off?

 

I need a new electric starter motor for my ride on lawn mower, 

 

- here in NZ retailer sells for $480 incl GST (RRP was 550+GST)

 

- in USA it sells for NZ$200, $250 landed (excl GST).

 

Surely the wholesaler in NZ is getting for a reasonable price and can ship via sea for cheaper pricing..

 

I would have considered buying here in NZ if was $300.

 

This is also why building costs as high due to wholesalers and retailers taking huge profits


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455 posts

Ultimate Geek


  # 2169320 28-Jan-2019 21:19
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quickymart:

 

mattwnz:

 

One thing some retailers do seem to do in NZ, is have a higher RRP, and then regularly apply discounts.

 

 

Briscoes immediately comes to mind, with their seemingly never-ending "50% off everything!" Consumer did a piece on them a few years ago and found that their initial price was fairly high, and once the discount was taken off, it was only slightly cheaper (or the same) as a lot of other retailers.

 

 

Yeah, Briscoes is a pretty big partaker in that. They do, however, have some items that are always cheaper than everywhere else, which they either make a very small margin on, nothing at all, or an actual loss to get people in the store to buy more things while they're there (loss leaders) 

 

The number of times I've needed something from Briscoes and it hasn't been on special money-mouth


2643 posts

Uber Geek


  # 2173704 5-Feb-2019 21:27
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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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