Thread: who are the 21 retailers?

Just so you blokes know WHy small retailers are dying its because the market power of the Harvey Norman's means that the manufacturers/distributors give them ENORMOUS rebates to stock their products in the disguise of "advertising rebates, stocking rebates,national deal rebates etc " which add up sometimes to 50% discount on what a corner store would be able to buy for. When you see a Hardly Normal catalogue who do you think pays? If you said HN you are wrong. All the product distributors pay.

The importers do this as its like Coles and Woolies. If you do not have exposure there then your volume will decline enormously.

I among the many other things I have done was Sanyo Colour TV Product Manager for a short time in 1979-80 and I used to deal with Gerry Harvey then.
So its not an import squeeze killing small retailers , its the importers/distributors.( and the landlords )
Why do you think franchising is stronger here than just about anywhere.
Regard Philip A

Originally Posted by PhilipA

Just so you blokes know WHy small retailers are dying its because the market power of the Harvey Norman's means that the manufacturers/distributors give them ENORMOUS rebates to stock their products in the disguise of "advertising rebates, stocking rebates,national deal rebates etc " which add up sometimes to 50% discount on what a corner store would be able to buy for. When you see a Hardly Normal catalogue who do you think pays? If you said HN you are wrong. All the product distributors pay.

The importers do this as its like Coles and Woolies. If you do not have exposure there then your volume will decline enormously.

I among the many other things I have done was Sanyo Colour TV Product Manager for a short time in 1979-80 and I used to deal with Gerry Harvey then.
So its not an import squeeze killing small retailers , its the importers/distributors.( and the landlords )
Why do you think franchising is stronger here than just about anywhere.
Regard Philip A

Thats nailed it.
The only real way to make some of these business competetive is some form of regulation that ensures wholesalers sell to all retailers at a similar price. Everyone would then be happier (maybe except the big players that may lose some market share). This would mean then that smaller retailers can compete on service rather than price and would mean you would shop locally.
Would be a nice dream and a bigger dream that if implemented would keep prices low.

fair??? what about that Gerry who worked his butt off, took risks and came up with better ways to sell more....his and others like hims rewards are being able to buy in bulk and negotiate a good deal....which they then pass on.

like any of us as consumers, I dont think there would be one person here that wouldnt try and get a better deal if buying in quantity.

just like arb air lockers....the USA probably buys more in a month than the whole of Australia buys in a year. And its that bulk consupmtion that keeps manufacturing costs down and makes R&D of new products worth while.

just like arb air lockers....the USA probably buys more in a month than the whole of Australia buys in a year

Exporters in Australia are always exhorted by Austrade to use what is called "Marginal Cost Pricing" where the price of exports should be reduced by not spreading all costs onto exports but only the marginal cost of production of the extra production.
Often extra production will lower unit costs of all production as plant utilisation is greater, and for most high volume production , profitability increases greatly as break even is exceeded. EG if a car plant break even is 80% capacity then the profit increase from 90 to 95 % is much greater than from 80 to 85%.
So they may be cheaper for us because of US exports.
BUT the "small market " argument is now pretty outdated for Australia. Since computerisation, CAD/CAM etc the cost of developing tooling and changing tooling is much less than 20-30 years ago. This is the major cost of low volume production and low volume batches are much less costly than in the old days. IMHO its the multi level distribution and very high gross profit margins to make a small nett that are to blame.

BTW most US markets are about 10times Australia.
Regards Philip A

It must be hard for local compaines to compete with products made out of Australia, but we will never be able to compete with the likes of chian india who can mass produce things, and the general public want cheaper prices.

The tax on internet sales/etc would still make purchasing over sea's cheaper, as many of these goods are 30/50% cheaper in the first place. Plus i like to have choice on what i buy and that is something Australian retailers dont offer.

just did a quick squiz at myer balance sheet 2010
AU$3.3Bn turnover - thats awesme
"Total sales value (excluding GST) $3,324,240,000"
AU$67 mill profit -
"Profit for the period $67,182,000"

now i don't know about you guys, but that looks about 2%, yes thats 2% net profit. i dont know about you guys, but i wouldn't be bothering myself.
again i say , lets do some research before jumping to conclusions that theres huge profit margins with these guys.

Originally Posted by uninformed

fair??? what about that Gerry who worked his butt off, took risks and came up with better ways to sell more....his and others like hims rewards are being able to buy in bulk and negotiate a good deal....which they then pass on.

like any of us as consumers, I dont think there would be one person here that wouldnt try and get a better deal if buying in quantity.

just like arb air lockers....the USA probably buys more in a month than the whole of Australia buys in a year. And its that bulk consupmtion that keeps manufacturing costs down and makes R&D of new products worth while.

I diagaree with that a bit. I really doubt Gerry has worked any harder than any other business owner. Yes he has laid out a good plan and has a good mind for business with a lot of luck as well.
Not everyone wants to have a mega empire or have 10000 people working for them, but the family store should be able to at least compete. Just because they can only hold 4 or 5 televisons and Harvey Norman can warehouse 10000 units does not mean they should be excluded from the same wholesale price. Economics mean we will all buy from the cheaper supplier, but having said that I would always prefer to buy local if the business supports the community even if it costs a little more, but not if it costs an arm or leg more.

Originally Posted by Rosscoe68

just did a quick squiz at myer balance sheet 2010
AU$3.3Bn turnover - thats awesme
"Total sales value (excluding GST) $3,324,240,000"
AU$67 mill profit -
"Profit for the period $67,182,000"

now i don't know about you guys, but that looks about 2%, yes thats 2% net profit. i dont know about you guys, but i wouldn't be bothering myself.
again i say , lets do some research before jumping to conclusions that theres huge profit margins with these guys.

Yeah but that is volume. If business owners incorporated their salary that would be a more logical way to determine profit. It is a varied issue some quote profit and then take their wages out some take wages and then quote their profit. I think profit should be calculated after a reasonable wage is deducted first.
Myer for example employee a lot of people so a 67million profit may be a good thing for them. A 2% profit by a company before wages would be a concern.