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Reanalyse

381 posts

Ultimate Geek

#309201 28-Sep-2023 12:33

It is not often that it is easy to identify the cost of the exactly same product in different stores (looking at you Mitre10 and Bunnings with price matching) but recently saw a great example between Costco and Harvey Norman -with stores almost next door to each other.

A Waterpic flosser set cost $174.00 at Costco. Therefore cost to them -wholesale cost- would be NZ$ 121.80 given the sale price is 30% above cost

Identical set (sold as separate units) is $454.00 at Harvey Norman. That means the markup is approximately $333.00 and profit margin of at least 200%.

No wonder things are expensive here. Surely size and scale would not make that much of a difference.

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#3135925 28-Sep-2023 13:27

It's an art, pulling the wool over peoples' eyes and obscuring the real cost price.

Quoting myself here, just to save time writing it out again...

How about those cost-plus sales? They're not as transparent as they may seem. There are rebates that retailers may get after the sale, and I recall years ago reading the fine print for one where they actually indicated cost price was the price before any bulk discounts were applied. I.e. the cost price they were using may not even have been their cost price.

I've found Costco generally isn't much cheaper than other places. I go there only because I have been doing work in the area, and they sell products (food, mainly) not readily available elsewhere. The particular item you mention seems like a bit of a gimmick, and I wouldn't be surprised if they're just being dumped. Different SKU, different price... nothing terribly unusual here. We used to see this with laptops all the time. The same product would be sold by multiple retailers with a slight variation (and SKU), preventing price matching.

sir1963

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#3135937 28-Sep-2023 13:50

Yeah, it can be as little as the colour of a part and its a different SKU.

I just bought in some underfloor ducted floor registers from Amazon because they were so much cheaper than buying in NZ

I had ordered it, had it shipped to mean arrived on my door step in less time than a NZ company could give me a price.

I am renovating a rental, so and extra weeks delay is an extra weeks rent lost, time is money

Behodar

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#3135938 28-Sep-2023 13:54

sir1963:

Yeah, it can be as little as the colour of a part and its a different SKU.

In the States there have been some manufacturers selling the exact same product via two different retailers with two different SKUs, e.g. 1234W for the one sold at Walmart and 1234B for the one sold at Best Buy. This allows the retailer to refuse to price match, by claiming it's not the same product.

Edit: Which I now see was already mentioned. I need to actually start reading before posting...

cddt

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#3135952 28-Sep-2023 14:39

SirHumphreyAppleby:

I've found Costco generally isn't much cheaper than other places.

Certain bulk foods seem to be significantly cheaper. My wife goes out there once every couple of months for certain products.

Bluntj

556 posts

Ultimate Geek

#3135956 28-Sep-2023 14:54

Reanalyse:

It is not often that it is easy to identify the cost of the exactly same product in different stores (looking at you Mitre10 and Bunnings with price matching) but recently saw a great example between Costco and Harvey Norman -with stores almost next door to each other.

A Waterpic flosser set cost $174.00 at Costco. Therefore cost to them -wholesale cost- would be NZ$ 121.80 given the sale price is 30% above cost

Identical set (sold as separate units) is $454.00 at Harvey Norman. That means the markup is approximately $333.00 and profit margin of at least 200%.

No wonder things are expensive here. Surely size and scale would not make that much of a difference.

Take a look at Harvey Norman prices in Australia and the UK......

floydbloke

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#3135962 28-Sep-2023 15:02

SirHumphreyAppleby:

The particular item you mention seems like a bit of a gimmick, ...

Going OT but I love my waterflosser, one of the best $130 (bought it off Amazon AU, not sure if it's the exact same bundle/product) I've spent. I hate flossing with string and as a result did not do it frequently. With this I 'floss' daily.

Did Eric Clapton really think she looked wonderful...or was it after the 15th outfit she tried on and he just wanted to get to the party and get a drink?

mattwnz

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#3136076 28-Sep-2023 18:57

I noticed for most things Bunnings price beat Mitre 10 by just a few cents, so you can then often get mitre 10 to price beat by 15%. However I noticed for some products like higher value power tools under certain brands , and where the identical model is sold in both retailers, that the price is identical. This prevents the consumer being able to price beat by 15% with either retailer. This doesn't seem right to me when Bunnings advertise that they have the lowest price guaranteed, but you can only price beat if a competitor has a cheaper price, not if they have the same price. So they have the joint lowest price with their competitor, rather than having an exclusively low price. But I would expect if a retailer was advertising that they have the lowest prices guaranteed, then they would actually be lower than their competitors, not the same.

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mattwnz

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#3136082 28-Sep-2023 19:09

sir1963:

Yeah, it can be as little as the colour of a part and its a different SKU.

I just bought in some underfloor ducted floor registers from Amazon because they were so much cheaper than buying in NZ

I had ordered it, had it shipped to mean arrived on my door step in less time than a NZ company could give me a price.

I am renovating a rental, so and extra weeks delay is an extra weeks rent lost, time is money

I was speaking to a manufacturers rep, and he said that were they supplied different major retailers, they often supplied the identical product, but gave each retailer a slightly different model number on the packaging. This potentially then prevents retailers having to price match. You also often see the indentical product but under a different brand at different retailers.

SirHumphreyAppleby

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#3136083 28-Sep-2023 19:15

mattwnz:

I would expect if a retailer was advertising that they have the lowest prices guaranteed, then they would actually be lower than their competitors, not the same.

Nothing about "lowest" implies "lower". If that were the case, costs for any item sold in multiple stores offering a lowest price guarantee would tend towards zero.

You also often see the indentical product but under a different brand at different retailers.

Sometimes they are even sold side-by-side in the same store.

Many years ago we purchased a three step ladder, I believe from Bunnings, in a sickly blue colour. It was a fraction of the price of the white one, sat right next door to it on the shelf. The only difference other than the colour was the branding and packaging.

gzt

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#3136158 28-Sep-2023 22:31

SirHumphreyAppleby: I've found Costco generally isn't much cheaper than other places. I go there only because I have been doing work in the area, and they sell products (food, mainly) not readily available elsewhere.

I notice on most of my visits at different times there is a steady stream of food shopping going on. Regular customers. It's looking like a food store with extra shopping opportunities for random house items. The average weight of the customers might be increasing. Those damn $13 for 12 huge huge muffins!

Wheelbarrow01

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#3136166 28-Sep-2023 23:32

mattwnz:

I noticed for most things Bunnings price beat Mitre 10 by just a few cents, so you can then often get mitre 10 to price beat by 15%. However I noticed for some products like higher value power tools under certain brands , and where the identical model is sold in both retailers, that the price is identical. This prevents the consumer being able to price beat by 15% with either retailer. This doesn't seem right to me when Bunnings advertise that they have the lowest price guaranteed, but you can only price beat if a competitor has a cheaper price, not if they have the same price. So they have the joint lowest price with their competitor, rather than having an exclusively low price. But I would expect if a retailer was advertising that they have the lowest prices guaranteed, then they would actually be lower than their competitors, not the same.

I recently bought a DeWalt table saw. The price difference between Bunnings and Mitre10 was significant - a couple of hundred dollars in favour of Bunnings at the time.

Mitre10 was happy to undercut them by 15%, so I ended up paying $980 for something that was advertised by M10 at $1200+ (I forget the exact figures, and the prices have since reduced - but I am still ahead).

My friend works at Mitre10 and his staff price (cost + gst) was more than what I paid. He tells me there is almost zero margin on power tools to begin with - it's purely just a sales volume game for them, although I am sure the volume incentives offered by the various manufacturers/distributors make it worth their while.

Wheelbarrow01

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#3136167 28-Sep-2023 23:39

mattwnz:

You also often see the identical product but under a different brand at different retailers.

I have a Trojan wheel lock for my boat trailer that I bought from Burnsco several years ago. Good product.

Then a couple of years later I bought a Repco branded wheel lock for my caravan that turned out to be identical apart from the branding.

So identical in fact that the two sets of keys are interchangeable. While super convenient for me, I do also wonder how many thieves it's also quite convenient for!!!

michaelmurfy

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#3136168 29-Sep-2023 00:07

Now, imagine if Supermarkets had to show their margins :)

So years and years ago I worked for Smiths City and as a staffer we could see the cost of the product and had power to actually discount even to under cost if we wanted. Often I would sell a Kayak which had some pretty high margin and chuck in a helmet (another high margin item) "free of charge" as a bundle. Or even sometimes I would sell an extended warranty (almost 90% margin) and chuck in something free for the customer doing so. At the end of the day it was extra profit for the store, and for my bonus.

I'd say Harvey Norman operates in the same way - their margins can be massive on some products but sales people have the power to discount and basically adjust as it suits them. They're paid their incentive based off margin. HDMI cables for example are one of the biggest margin items with almost 90% margin in them at full cost - when I use a discount card I have it brings a HDMI cable from $80 to $5 in many cases, it's nuts.

Costco on the other hand doesn't have this sort of system so they can sell with a much lower margin. If only we had more Costco's around!

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Kyanar

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#3136181 29-Sep-2023 02:14

Bunnings in particular (though I imagine all Wesfarmers Group companies are similar, including Kmart) are particularly bad about getting suppliers to create unique SKUs for them, which are impossible to price match since they cannot exist elsewhere by definition.

lxsw20

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#3136234 29-Sep-2023 08:50

The true cost of an item isn't known by most retail workers even if they can see the "cost" price on the computer. Its all about the rebates.

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