Thread: Can someone tell me why???

Originally Posted by Hoges

Saw one G Harvey bleating about onlinesales on the TV last night... went on and on about supporting local retailers etc..

What was clever was the manner in which he implied that "..we're Australian" and Aussi online buyers were supporting overseas sellers by importing...


Deconstruct the argument for what it is: He's discovered to his horror...!!! THAT We, the consumers of this world have the freedom to import stuff from China cheaper than he, G Harvey a.k.a. middleman... can buy from China...

Get over it Gerry, that's what global competition is about...

The bit in blue I can agree with. I would be very surprised if the bit in red was true. However it just means that they have to improve the way they are selling to us and revise their profit margins.

The reason that we no longer have a manufacturing sector (employing hundreds of thousands of Australians) in Australia anymore is because of the big chains, like that of Gerry Harvey and Solomon Lew, chasing the cheapest price for bulk purchases, irrespective of the social impact of unemployment.

When the Australian manufacturers like Email, AWA, Hoover, Pacific Brands and Fisher & Paykel (yes it's NZ), could no longer compete with the lower cost of labour to Asian manufacturers (as mentioned above) they moved their plants to Asia.

The current situation is now of Gerry, Solomon Et Al's own making.

Originally Posted by Lotz-A-Landies

We used to be a frozen food and ice-cream wholesaler on the South Coast of NSW. Jewels stores were selling Birdseye products to the public cheaper than we could buy from Birdseye direct and then we had to carry it in our own freezer trucks from Sydney to Nowra. We would have been better off buying boxes from Jewels. Go figure!

I seem to be hearing this a lot lately... so does the actual problem stem from the wholesaler? Chasing the bigger market, rather then one price for all type set up when they sell a product?

On a separate note, how does this apply to the car parts market for land rovers? Surely they would get the product cheaper then I ever could from like Paddocks or indeed Brit part themselves... why are they chasing massive mark ups.. They would sell a heap more. Which again would be better for the brand. I know of a case in America, where there was/is tax on imported goods etc, and Honda would sell spare parts for an absolute mint! Much to the disgust of the American pollys and indeed the general public.

The internet has certainly opened peoples eyes to what is possible these days. You can sell stuff without out even owning an actual store front. Who would have thought that that was possible 15 years ago.

Originally Posted by Lotz-A-Landies

The reason that we no longer have a manufacturing sector (employing hundreds of thousands of Australians) in Australia anymore is because of the big chains, like that of Gerry Harvey and Solomon Lew, chasing the cheapest price for bulk purchases, irrespective of the social impact of unemployment.

When the Australian manufacturers like Email, AWA, Hoover, Pacific Brands and Fisher & Paykel (yes it's NZ), could no longer compete with the lower cost of labour to Asian manufacturers (as mentioned above) they moved their plants to Asia.

The current situation is now of Gerry, Solomon Et Al's own making.

All of the above is probably correct, but I see the main problem being Population, the USA has 300million potential customers at home alone, we have 22million, do the numbers, it's the same as Woolworths competing against privately owned, Mum and Pop corner shops.
We pay more tax than the yanks and I would be willing to pay more just so we don't end up with the Social system they have in the USA. So I will buy goods here in Australia and support the lifestyle and Social system we have, Regards Frank.

Originally Posted by Tank

All of the above is probably correct, but I see the main problem being Population, the USA has 300million potential customers at home alone, we have 22million, do the numbers, it's the same as Woolworths competing against privately owned, Mum and Pop corner shops.
We pay more tax than the yanks and I would be willing to pay more just so we don't end up with the Social system they have in the USA. So I will buy goods here in Australia and support the lifestyle and Social system we have, Regards Frank.

Yes, not a problem. But what I have a problem with is someone marking up stuff by 400%. At what point do you say, stuff that I am being ripped off ?

Originally Posted by Hoges

Saw one G Harvey bleating about onlinesales on the TV last night... went on and on about supporting local retailers etc..

What was clever was the manner in which he implied that "..we're Australian" and Aussi online buyers were supporting overseas sellers by importing...


Deconstruct the argument for what it is: He's discovered to his horror...!!! THAT We, the consumers of this world have the freedom to import stuff from China cheaper than he, G Harvey a.k.a. middleman... can buy from China...

Get over it Gerry, that's what global competition is about...

slugburner you are right, I stand corrected the bit in red would be better expressed as "who also imports similar stuff from China, is prepared to sell it for in Australia..."

Originally Posted by klappers

I seem to be hearing this a lot lately... so does the actual problem stem from the wholesaler? Chasing the bigger market, rather then one price for all type set up when they sell a product?

On a separate note, how does this apply to the car parts market for land rovers? Surely they would get the product cheaper then I ever could from like Paddocks or indeed Brit part themselves... ....

There are a lot of factors, If Davids Holdings (the owner of Jewel Stores at the time) are prepared to buy product from a manufacturer by the 40foot container load, then this cuts the cost of warehouse space, refrigeration, staffing, cleaning and maintenance so a net saving for the manufacturer. Small wholesalers may buy by the pallet load but the manufacturer still has to warehouse the rest of the 40 foot's worth of product.

It's the same with Paddocks etc. Where ever you establish a company there is a certain cost before you get in stock to sell. There is the cost of the warehouse, the cost of services and cleaning, business taxes and other costs like accounting, office and warehouse equipment and that all comes before the first item to sell or employing the first member of staff. It is also why many companies are having third party companies do logistics and dispatch for them (think Toll, Mainfreight, even Australia Post). Now think about the numbers of Land Rovers on Australian roads compared to other brands of 4WD and then compare that to Land Rovers and population in the U.K or the USA.

It becomes very clear and a dilemma for us.

However I will support an Australian retail store if they have a history of supporting Australian manufacturers but seeing as most of them don't, then why should we continue to support their poor customer service and high prices.

There was a great documentary on Foxtel recently about the USA Garment Industry, tracing its development from sweat shop to premier industry to skeleton.

With the post 1920's Unionisation of industry improving wages and conditions and USA industry making over 95% of clothing sold in USA, with trade liberalisation of USA economy by succeeding Presidents starting with Kennedy in the 1960's the proportion of USA made garments dropped steadily from 95% to around 5%.

Despite Union Advertising to buy American made and save jobs in the garment industry consumers preferred buying cheapest clothing from imported south east asian and sub continent suppliers and clothing retailers savaged local manufacturers margins to equal import clothing costs. So that the 5% market is now the premier labels of clothing in the high end clothing manufacturing.

USA Garment workers are a rarity, story seems familiar to you

Same story can be done in electronics and manufacturing

If consumers want to buy cheap products, wholesalers and retailers will supply it and sell it to them, the local economy of manufacturing cannot compete given wages, superannuation, health care insurance, safety laws, fire laws etc and off shore their production.

In the 1980's in Melbourne PBR dismantled their brake manufacturing plant in Moorabbin Victoria and shipped it entire to Malaysia and built a new factory there and imported all its products from overseas, putting couple hundred Australian workers out of work.

Before the Button car plan, Australia had 5 local manufacturers employing 135, 000 people selling cars in Australia plus importers, now we have 3 employing less than 30,000 and still have imports.

So story is consumer gets what they are prepared to pay for, are you prepared to pay for Australian made products employing people with standard living we all want or are you after cheap products from overseas.