who are the 21 retailers?

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Originally Posted by PhilipA

I have been thinking a lot recently about WHY Australian retail prices are generally so outof line with international prices.

I think there are several reasons.

1 Australians are just slack and we are so rich we think its reasonable to pay say a window cleaner $100 per hour when the real rate should be $15, we pay heaps for dog walkers ferrchrissake. I am always amazed at what we pay tradespeople who in just about every other country are at the lowest end of the pay scale.

2 The real estate industry (before the net) worked out they could charge astronomical rents to retailers because of the above.

3 Retailers margins had to go up enormously to cover these rents so that the nett at the end of the day was+.

4 Our wage laws are crazy so that 17 year olds with no experience are paid more than anywhere else in the world.

5 Retailers such as Harvey Norman's business plan calls for instant product delivery so every store has a warehouse employing X people.

So I think there will need to be enormous cultural change to make Australian retailing competitive.

1 Distribution will have to change to National rather than state. This will also remove layers of profit margins for "state distributors"
2 property values for shopping malls will have to fall enormously, which bodes ill for valuations and property trusts.
3 Efficient web based sellers will have to increase in Australia. There are a few now, But generally web based sellers are not in the same galaxy as USA sellers in customer service. If some come up or maybe Harvey Norman starts one then this will quickly change the whole retailing model in Australia.

When I was recently buying shock absorbers I was astounded and still am how Australian companies get away with their pricing. Even a well known parts supplier I recently dealt with charged me $90 each for Armstrong shocks which retail including 15 %VAT in UK for GBP 12.50. SEE 1 ABOVE.Next time I will buy from UK even though their web sellers are slack. One has not yet answered an email sent on 29 December and followed up 3days ago.
Regards Philip A

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if you compare our "quality" of living vs other countires you will see we are on par with those that are on par with us....The USA for all its bells and whisltes does not have the quality of living that we do.....and on top of that they have such a massive demand for product it pushes prices down and makes things more available, that in turn pushes prices down......but to have a market as cheap as there's is false....have a look at there unemployemnt and their avearge wage.....its a viscous cycle...

And as tradie I call absoulute BS on you comment about to high a wage....If you had an idea of what it costs to get out of bed and go to work as a contractor and knew what the dictated(by the market) wage was you wouldnt make that comment....

Crap, just spent 10 minutes typing a reply and google chrome crashed. Now to remember what I typed.
Well there are a lot of issues and circumstances around this issue and the simple answer is not just about buying local or in Australia.
The first issue is is the item available in Australia to start with?
I can buy quite a bit of gear OS cheaper, especially Land Rover parts, but there are a few suppliers in Australia that are easier and less hassle to deal with.
However I start to draw the line a bit when products are more than 50% dearer. There are many retailers in Australia that have profit margins of up to 2000% (hence why they always seem to be having big sales). Some have very slim profit margins.
A good example is the shocks I bought out of the US. Cost me $460 delivered from the US to my door in Esperance (inc $100 US aire freight and delivered in 5 days). Same shocks in Aus $1000 delivered Perth to Esperance by road.
A bit hard to feel sorry for a retailer that pulls up in an expensive car and has 2 houses and holidays OS every year and then wants to charge you 100% plus or more for the same item you can buy OS. And the I work hard so deserve it is BS, I work hard too as do most people.
I always also take into account freight and back up service too. Another example was a switch from the UK and from a retailer approx $60 delivered air freight, same item in Australia $365.
Do not get me wrong I will always buy from an Australian business if possible but within reason too.
A good example again is a new Jeep Wrangler 4 door $21k in the US $46k in Australia.
This is always going to be an emotional topic with retailers and business of course being on one side and consumers on the other.
Then there is just some stuff I would not buy from OS as there is no real warranty.

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Originally Posted by Slunnie

I'm not sure how half of a transaction can be in Australia, if the purchase is processed overseas or from an overseas website as then it has all happened overseas. If I read out my card number over the telephone when I speak to the the vendor overseas, I'm not quite sure how the Australia government can make a claim on it. If thats the case, then perhaps for online purchases we should be encouraging the use of Proxy servers to make international purchases - or the Australian retailers become competitive by sidestepping the wholesalers who seem to often get the blame for high prices.

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Maybe not half the transaction but least some of it as the customer is in aust its not like we get on a plane if so we would qualify for duty free.


A big part of the mark up here is as phillipA says wages and property rent most retailers/wholsalers dont look just at a % profit they look at what it costs to run their shop then say we sell x amount of goods so need to make xx of those sales the less they sell the more they have to make per sale this can lead to large differences between vendors. The guy online with no shop and few employees has a big advantage over a shop that has to pay rent and wages to 20/30 empolyees. To make smaller business competative someone is going to have to accept less money workers and the owners:(

Yeh while I was typing my last, a courier turned up with my new exmoor canopy ordered last thur from craddocks in the UK delivered today for less than half what i was quoted here for the same canopy:D

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Originally Posted by uninformed

and on top of that they have such a massive demand for product it pushes prices down

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Laws of supply and demand state that high demand will increase prices, not decrease prices. Prices drop due to competition and over supply.

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Originally Posted by CraigE

Crap, just spent 10 minutes typing a reply and google chrome crashed. Now to remember what I typed.
Well there are a lot of issues and circumstances around this issue and the simple answer is not just about buying local or in Australia.
The first issue is is the item available in Australia to start with?
I can buy quite a bit of gear OS cheaper, especially Land Rover parts, but there are a few suppliers in Australia that are easier and less hassle to deal with.
However I start to draw the line a bit when products are more than 50% dearer. There are many retailers in Australia that have profit margins of up to 2000% (hence why they always seem to be having big sales). Some have very slim profit margins.
A good example is the shocks I bought out of the US. Cost me $460 delivered from the US to my door in Esperance (inc $100 US aire freight and delivered in 5 days). Same shocks in Aus $1000 delivered Perth to Esperance by road.
A bit hard to feel sorry for a retailer that pulls up in an expensive car and has 2 houses and holidays OS every year and then wants to charge you 100% plus or more for the same item you can buy OS. And the I work hard so deserve it is BS, I work hard too as do most people.
I always also take into account freight and back up service too. Another example was a switch from the UK and from a retailer approx $60 delivered air freight, same item in Australia $365.
Do not get me wrong I will always buy from an Australian business if possible but within reason too.
A good example again is a new Jeep Wrangler 4 door $21k in the US $46k in Australia.
This is always going to be an emotional topic with retailers and business of course being on one side and consumers on the other.
Then there is just some stuff I would not buy from OS as there is no real warranty.

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some good info and I agree.....but also remember their auto industry is heavily subsidised and very competitive....also they sell 1000-1 the cars we do....

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Originally Posted by BigJon

Laws of supply and demand state that high demand will increase prices, not decrease prices. Prices drop due to competition and over supply.

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true to a degree....but it seems alot of stuff (auto related) in the USA is a case of " ****, I could build that better and cheaper" ....its on such a large scale over there that even machineary is cheap because of the huge market which supports many brands and that equals competition....also their labour costs are quite low..

high demand only increases prices when there is limited supply ;) eventually people see there is money to be made and jump on board...

there is a clear attitude not to pay more than the genreal public feel a product is worth...this is amplified in the USA by huge markets and availability....but,demand is still high

The big problem for High Street retailers is that with the internet and basically a global market place their business model no longer works. Sell your Westfields shares now! ;-)

Yep, massive cultural change. This is really simple economics.
Retailers, tradies, manufacturers, etc are not making 1000% profit anywhere in Australia, gauranteed. (and if you can prove me wrong, I WANT THEIR NUMBER!) Their costs are high, their prices are high, and hopefully they make 15%.

Lower costs, and you get lower prices, in a competitive market. Key costs are rent, and wages. Cant lower wages, 'cause the cost of living for the wage earner is so high. Cant lower rents because the property owner has a loan to repay....etc, etc.....to fix it, requires massive change, and that change is not going to happen voluntarily. The only way it happens, is like how the GFC has effected the UK. They now have much lower costs....and all of the pain that goes with it....high unemployment, low demand for product, stagnant economy etc.

In a truly open market, the world would equalise. Wages, and product costs, in different companies, would even out. Because the workforce will go where the money is (CHECK OUT ALL THE BOATS COMING TO AUSTRALIA as an indicator of mobile populations chasing a better standard of living.) If you cant compete with that COuntry, then you dont make/provide that product anymore. On a coarse scale, this is what is happening with manufqacturing internationally. We dont manufacture anymore, becuase China, and India do it cheaper. Instead, we aim to provide something they need, but cant do. The obvious one is minerals. But we have also tried to provide higher level services, like education, technical expertise etc. These industries too are on the decline as places like China and India inprove their ability on these areas. Whilst we have resources, and they need them, it doesnt matter. We are in part shielded from the global economy. Thats why we have money to spend on cheap imports. It will keep working whilst we can share that wealth throughtout the Australian economy. It will stop working if we end up with a two speed economy.....or run out of minerals. (Although I have a solution for that :) ) And when that happens, it should level out globally.... But it wont level out, because the people at the better end, dont want to give up what they have, and the Government feels obligated to support that desire.

This is the Capitalist Model....everything is linked to "growth", and everything will therefore keep going up. If it doesnt, it breaks.

So, next time we whinge about having to pay 30-50% more for parts in Australia, just thank yourself that you have the option of supporting the local guy, or whilst sitting in your house, with a cold beer, kids in decent schools, you can access the inta-ma-net with your right hand, find something on the other side of the world, and justify to yourself that you can spend some of your disposable income on some "Ineeditrightnow ori'mgoingtodie!" parts. :) You can bet your bottom dollar that most australian companies out there do not sit on a 50% profit margin! If they could compete with you bringing stuff in from overseas, they would.

Choice is yours....and I dont judge you :wasntme:

For the record, I own an australian engineering design and manufacture workshop, that struggles to compete everyday, and often unsuccessfully....and I still order some parts from overseas.:angel:

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Originally Posted by PhilipA

I have been thinking a lot recently about WHY Australian retail prices are generally so outof line with international prices.

I think there are several reasons.

1 Australians are just slack and we are so rich we think its reasonable to pay say a window cleaner $100 per hour when the real rate should be $15, we pay heaps for dog walkers ferrchrissake. I am always amazed at what we pay tradespeople who in just about every other country are at the lowest end of the pay scale.

2 The real estate industry (before the net) worked out they could charge astronomical rents to retailers because of the above.

3 Retailers margins had to go up enormously to cover these rents so that the nett at the end of the day was+.

4 Our wage laws are crazy so that 17 year olds with no experience are paid more than anywhere else in the world.

5 Retailers such as Harvey Norman's business plan calls for instant product delivery so every store has a warehouse employing X people.

So I think there will need to be enormous cultural change to make Australian retailing competitive.

1 Distribution will have to change to National rather than state. This will also remove layers of profit margins for "state distributors"
2 property values for shopping malls will have to fall enormously, which bodes ill for valuations and property trusts.
3 Efficient web based sellers will have to increase in Australia. There are a few now, But generally web based sellers are not in the same galaxy as USA sellers in customer service. If some come up or maybe Harvey Norman starts one then this will quickly change the whole retailing model in Australia.

When I was recently buying shock absorbers I was astounded and still am how Australian companies get away with their pricing. Even a well known parts supplier I recently dealt with charged me $90 each for Armstrong shocks which retail including 15 %VAT in UK for GBP 12.50. SEE 1 ABOVE.Next time I will buy from UK even though their web sellers are slack. One has not yet answered an email sent on 29 December and followed up 3days ago.
Regards Philip A

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Well said Hamish