Gerry Harvey wins, but still complains! Major loss of competition

Shopping
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101

I find myself in the same situation as @grahroll. Ordering IT parts or small items can be significantly cheaper when sourced overseas.

One example from a few days ago: my wife asked if I could find her a perfume atomiser. Yes, she could buy one locally for $10 or so - but I could buy two glass atomisers from China for $1.10 each (including GST, excluding the 5% discount on the second one)!

If we bought from an Australian supplier, I suspect several middle-people would have also received a cut of the sale. If we ordered from an Australian company online, we would have paid several dollars in postage - postage from China is free for many items!

While it’s easy for Dick Smith and Gerry Harvey to say ‘buy Australian’, I have a tight budget and cannot afford the luxury of buying ‘Australian’.

I also heard a few years ago that Australian retail space is among the most expensive in the world. That is something that could be fixed - in the same way as property prices more generally could be made more rational - if a federal government of any stripe had the courage to make decisions that are for the good of the nation rather than this or that voting bloc/interest group.

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102

I have long thought traditional Aussie business owners set their income target, say $250,000 personal profit per annum, then divided their projected sales to derive prices that delivered that amount of profit.

Using my model our local seller thinks he should have a $50,000 income and will sell 5,000 leads p.a. results in wanting $10 profit per lead, plus $0.50 cost per lead, plus GST = $11 (rounded) sale price + postage.

It seems to explain much of it and could have been that simple, historically.

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103

A mate runs a hobby shop and gets about 70% of his products from overseas middlemen. He says he would not be able to stay in business if he bought all his wholesale products from the local importer/distributor. He buys 30% locally to maintain relationships when he needs short fuse deliveries.

Conclusions, it is not always the poor retailer, it is often the middlemen, manufacturer, and multi-national with their hands out to us with those ‘down stream’ having to add their cut to survive at their own levels.

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104

Agree that there is more than one factor in how many of these items are priced.

The desire for a small business to make a good income on a small turn over in an over priced retail environment sets a floor price locally for many consumer items.

Add the complication that name brands from OS may choose to not establish directly in Australia and you add middle men. These may be supported by marketing/product promotion and retailer education from the brand itself.

The physical product may pass from the brand factory door to an international marketing division, onto a major regional division (eg SE Asia or Australasia) to a national importer and wholesaler then to a regional distributor before the retailer sees any product. Some products even had state distributorships along the way!

Every one of these steps adds costs and a need for profits, the distributorship model is accepted commercial practice, and historically keen businesses or owners actively sort out or bid for the importer and distributorships. Fortunately in some retail sectors these models have been broken through our ability in more recent times to bypass all the middle people.

Even Gerry H took umbrance ( I mean umbrage, damn auto correct) some time back with several of the big Japanese brands over the fact he could buy product cheaper retail in SE Asia than wholesale through their Australia agencies. He threatened to go direct. We may note on the packaging of some products from HN it shows they were consigned from a SE Asian source directly to HN Australia. No doubt GH should be proud we are also standing up for the best deal by going direct.

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105

Language Nazi alert! Language Nazi alert!

I think you mean ‘umbrage’.

/Language Nazi
/hides

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106

Some very good points. One of the problems Australian consumers face when wanting to “buy local” at a fair and reasonable price is overseas products tied up in exclusive distributor rights, luckily not a huge segment in the market right now but it’s a growing area.

When someone here in Australia gets the right to be the sole distributor of a product here, they get to set their own price without any competition - including competition from the original source of said product. A case in point is a product called X-Arcade Tankstick, an old arcade style controller built for multiple systems of consoles and PC/Mac. As an old school avid gamer from the Space Invader days I looked into buying one a couple of years back from the manufacturer’s website. Went through the process of choosing the style and options, adding it to cart and proceeding to checkout (they shipped worldwide). Once I entered the delivery address however, I was informed that the purchase could not continue and was redirected to their exclusive Australian reseller. I wanted the product so entered all the same choices as I did on the USA site, but very quickly changed my mind when the payment window showed a cost that was $245.00 more than the exact same item direct from the manufacturer (even after calculating the exchange rates and estimating shipping via UPS) - a 95% markup on the item. I don’t mind paying a reasonable markup as you have to make a buck to stay in business, but I’m not willing to pay double!

Another thing consumers will notice is when multinational companies set their own price for products here in Australia and force retailers to charge that through supplier agreements. These are mostly what can be considered “big ticket” items such as ovens and cooktops by Miele or Gaggenau, Apple products, etc. You’ll notice these items are excluded from most sales events that retailers hold, as they are not allowed to discount these items without the parent company giving direct consent. For example if you are shopping at somewhere like Winning Appliances to outfit a new kitchen and are haggling about the final price for your purchases (as you should ALWAYS do), you’ll strike a situation where they’ll say no discount can be given for the Miele cooktop and Gaggenau oven, but to balance that they’ll give extra discount on the sink, the dishwasher and the rangehood.

These items are affected by the so-called “Australia Tax” and thanks to smartphones and the web it’s easy to see the difference in pricing from what they want us to pay here compared to the USA, Europe and Asia. You can do it whilst the retailer is getting the quote together lol. Bricks & mortar fashion retailers especially hate this new power consumers have, because they find the younger brigade now come in to try on styles and brands, and whilst in the change rooms order the items from somewhere online at a much cheaper price. I do feel for those retailers who are struggling to survive by effectively being a giant change room for online marketplaces, but perhaps some need to change their customer service offering to attract/keep new customers. I’m no fashionista but from chatting to female friends and family members they still prefer the personal touch and are willing to pay a little more if the service is great :).

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107

You might have ‘been there’ but if not, check some of the reshipping services.

edit → now closed but worth reading their site as to why – https://www.priceusa.com.au/

referenced in the Choice article

Auspost also has a ‘product’ https://shopmate.auspost.com.au/

and there are others.

Some companies recognise the trans shipper addresses and will not ship to them, but.

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108

My understanding of how this level of price control is implemented, by Miele at least, is that you are not buying from Winnings but from Miele. Winnings are acting as consignee and cannot alter the price but collect a fee from Miele for each item they sell and the consignor sets the price.

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109

My understanding is that the ACCC has been (very slowly) pursuing such cases over the last couple of decades. Thus the encouragement of ‘parallel importing’ - or as the retailers prefer to call it ‘grey imports’. If there are companies that continue to seek to control prices in such a way, this is an area in which Choice could and should get involved.

Call-out to the Choiceketeers! Anything you can add, @BrendanMays?

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110

The ACCC has taken on retail price maintenance, but evidence suggests it continues taking a blind eye to the arrangement Miele and others put in place whereby shops are merely order-taking agents for the importing entity, and the importing entity is the sole seller and can thus set and maintain price controls.

There are companies that arrange personal one off imports such as this one. Because of product numbering it is not obvious what the exactly comparable local model might be case by case and the warranty can be pretty special - European warranty with a free 60-day Australian warranty (not counting the ACL). I suspect with the volume possible across Australia grey market appliances would be comparatively high risk businesses when support/warranty/ACL issues are included, hence not many operators.

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111

There may also be a risk with any electrically powered items that they do not comply explicitly with Australian standards and codes.
This may be as simply as not having the required compliance stickers to actual differences in the actual construction or components.

Importers of grey products need to get past Australian Customs. Whether direct importing one off items or small quantities - some appear to be held up at customs. Others get through.

Note that many universal laptop chargers/power supplies sold in Hong Kong, Japan etc may only have a two pin plug, while the same and similar products sold in Australia usually have a three pin plug with earth connection. Even wifi compliance can be an issue with some foreign products previously imported enabling use of 11g channels not permitted to be used in Australia (nos 12, 13 I seem to remember).

Perhaps this makes us all the more reliant on a more open domestic market and stronger ACCC to enforce consumer protections? Exactly the opposite of the GH future world view!

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112

FWIW I have not seen a 3-prong universal laptop chargers/power supply on an Australian product in a few years. There still might be some but we may have finally joined the world with well insulated power blocks that have svelte, lighter, smaller plugs as our norm. I notice many power tools are also moving to 2-prong. :slight_smile:

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113

To add to the points made above by @grahroll, @postulative, @PhilT, & @mark_m, I have noticed a few times when looking at products locally, they are EXACTLY the same as the product I have purchased from overseas, just with different branding.

IF the Oz businesses put their inventory on line, and delivered to my door with only a small premium for buying locally, I would. BUT, when I can buy products delivered to my door for 10% or 20% of the price from the Oz shops, where I have to go and pick up, I simply can not afford to buy local.

With increasing globalisation and decreasing disposable cash, the days of supporting the local bush ranger / whinger just because they employ local people are over!

I thought so too until I started tinkering & attempting to repair broken IT equipment, only to find that although there may be an earth pin, that earth does not always connect to anything inside the equipment.

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114

An interesting take on how shops will probably transform in the not distant future to compete with online.

https://finance.nine.com.au/2018/08/31/15/21/why-aussie-retailers-are-being-forced-to-shut-their-doors-at-an-alarming-rate

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115

When we were planning to build a new home in 2012, I checked the prices of Bosch, Siemens and Miele appliances in the UK and Australia and I was truly shocked at the results which I posted on the now defunct Not Good Enough website.

The Australian prices were 2 to 3 times as much as the UK prices after allowing for GST and VAT but excluding freight to Australia.

And as for electrical safety standards, I seriously doubt that the UK would be any lower than Australia, particularly as we adopted a great many standards from them, and both countries use the same voltage and frequency.

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116

Part of that is not the standard, it is the regulatory treatment. If a standard is not formally met and labelled, the product does not meet it. To wit, the farcical situation with bicycle helmets the ACCC tried to resolve as one of the most ridiculous. Government claims our tests are more rigorous, and they might be, but are the helmets shipped to Australia are any different from those sent to the UK or US? If you don’t have the appropriate ANZ sticker you are legally not wearing a bicycle helmet. And so goes the rest of our wonderful regulatory world. Note that motorcycle helmet regs have joined the world while modernising the bicycle variety has gone nowhere slowly, and we continue to enforce this Bicycle helmets | Product Safety Australia

Have a house fire and your appliance is not appropriately and formally certified? Guess who might not not have insurance if the inspectors notice.

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117

My post was merely to illustrate just how badly we are being ripped off by a combination of multinational manufacturers and greedy retailers.

I have found the post I did on Not Good Enough on 28.11.2011 (not 2012) which I have copied below.

“We are planning to install a complete Bosch kitchen and laundry appliance package when our new home is completed. We have obtained a price from a local specialist whitegoods retailer for the following items:

  1. Electric wall oven
  2. Built-in microwave oven
  3. Gas cooktop
  4. Ducted 90cm range hood
  5. Fully integrated dishwasher
  6. Washing machine
  7. Heat pump clothes dryer

After discovering that the package is available at a substantial saving from a leading Australian online retailer, even after the freight charges were included, we were extremely surprised to find that the savings from a similar leading UK online retailer were far greater.

I have repeated the exercise with similar packages of Siemens and Miele products, with similar results, as listed below. There is no Australian discount Miele price listed due to their policy of preventing same by selling under agency agreements, which obviously does not occur in the UK. The Australian online retailer does not list Siemens; the AUS ONLINE price shown was for a recent Siemens 1 day sale at a specialist whitegoods retailer, which included a superseded model dishwasher.

BRAND AUS RRP AUS ONLINE UK RRP UK ONLINE

Bosch $14,643 $12,801 $7,309 $6,039

Siemens $21,493 ($14,863) $9,383 $7,327

Miele $22,293 (N.A.) $16,443 $14,438

There is obviously a policy amongst the manufacturers’ Australian operations to jointly milk Australian consumers to the maximum, as shown by the vast discrepancy between the Australian and UK RRP pricing. Claims that Australia is only a small market, it is a long way from the factories, GST is included, etc, etc, don’t cut it.

These products have already been imported into the UK, they include the 20% VAT tax, and the manufacturers offer a huge range of products in the UK in comparison to the handful they import into Australia. The UK uses the same electrical mains supply as Australia so compatibility is not a problem.

The refund of the 20% VAT would go a long way towards defraying the shipping charges, Australian import duty of 5%, and 10% GST on all costs. In fact, we could fly to the UK, have a holiday, and still have money left over from the price difference.

Of course, the manufacturers’ Australian operations would refuse to support the factory warranties, but with these levels of savings on quality products, who cares? The Bosch Australian warranty is only 1 year anyway compared to their 2 year UK warranty for the
same products.

Little wonder the Australian retailers are upset about online overseas purchases, but perhaps they should be blaming their suppliers instead of wary consumers.”

We did not proceed with the new home construction and I was fully aware as to the potential risks of compliance approvals.

At the time, Makita had the temerity to have a large warning notice on their Australian homepage advising customers of the “risks” in privately importing their products, and tried to claim that there could be issues involving injury or death and subsequent legal liability problems.

Considering that the only difference between their battery-operated products sold in Australia and the US, other than the massive price difference, were the chargers, it was a classic example of the old FUD principle, unless they were actually knowingly selling sub-standard, unsafe products in the US,

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118

That was clear, but the potential issues around certifications are also relevant, unfortunately, if something goes bad such as a house fire happens and the (technically) non-compliant product was at fault.

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119

As per my post I did point out that for some items the difference may be no more than a certification or standards compliance label/sticker.
The most important point I hoped to share is none of us know absolutely whether an OS sourced product is identical in every respect to one sold in the Australian market from the same manufacturers.
Legal requirements for importation and certification Standards Assoc of Australia.
“Seriously doubting” there is any difference is unlikely to pass any burden of proof test. For electrically powered appliances simply not having that hard evidence as has been pointed out by @PhilT may have consequences.

Another interpretation is that once anyone connects a non-certified prescribed appliance or item into the 240v mains a staturory offence has been committed. As well as the other one of importing and or selling a non compliant item.

Totally agree with yout pricing observations. I am always looking to other supply options for certain products.

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120

EEK! Not for me, of course - I am always scrupulous in ensuring everything I own has the right stamps on it :roll_eyes:.

You also didn’t mention the laws against plugging anything into the phone line - although they may have been relaxed in recent years.

Is this another area in which Choice may consider campaigning for regulatory change, @BrendanMays ? We have ‘free trade’ agreements that are anything but for 95% of the population, and the issues mentioned above are part of this! One would like to live in a world in which insurers could not dispute a claim simply because some appliance has regulatory approval from a different country, and is otherwise entirely the same - but the posts in this thread suggest that this is not the case.

There may be some sensible reason for specific standards to differ based upon local conditions, but in most instances they should be transferrable between developed nations. (I am aware that some countries use standards as trade barriers.)

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