Thread: Price gouging why are we paying so much?

Definitely Ripoff territory here in Aus. I just took an alternator in to have a new Diode pack fitted, $220!!!! I appreciate the blokes got to make as living but I can get a brand new Alternator for 95GBP about $140 from the UK!!!!
Cheapest new Alternator I saw over here was over $400!

Ivan

Check these guys out, found the link on a Crikey article about price gouging a couple of days ago.

Price USA | Shop where you want

Thanks Simon

Wish I knew about that site a week ago!

Have been attempting to get the platform mount to attach an M60 (CPMG) to a pedestal on the Gun Buggy I'm restoring and they wouldn't ship outside the US.

The local price gouging on the Roverdrive issue is a bit more serious, we have been waiting for a Roverdrive for the LT95 box, but because of low sales volume on the Sx and Dx models to Australia, Roverdrive Gear Corp is starting to believe that there is too much financial risk on producing a Roverdrive for an obsolete box like the LT95. If there were a greater sales volume subsequent to lower prices on the LT230 and series models, they may not have the same concerns.

Originally Posted by Ivan

Definitely Ripoff territory here in Aus. I just took an alternator in to have a new Diode pack fitted, $220!!!! I appreciate the blokes got to make as living but I can get a brand new Alternator for 95GBP about $140 from the UK!!!!
Cheapest new Alternator I saw over here was over $400!Ivan

And they are all probably made in China!

Diana

I think that there are several reasons for the price differences, although which are most important is probably both a matter of opinion and varies in different cases anyway.

1. Small market - this means imports are in small quantities (so overheads are spread over fewer sales), and tend to spend a long time on the shelf.

2. Red tape. The amount of red tape to run a business in this country is very large compared to the USA, for example, and the cost of compliance is high.

3. Lack of competition - this is largely a result of 1 + 2, but means that the local businesses can get away with gouging. Helped by exclusive sales licences with overseas suppliers who won't sell to Australia except through their dealer.

4. Dollar hedging - even though the dollar is high at the moment, a lot of the stuff on sale today was bought with overseas currency that was hedged when the dollar was lower, so the effective $A is a lot lower.

5. High interest rates. Very high interest rates in Australia by international standards (particularly US) means the cost of running a business is a lot higher here.

6. High cost of employment here. High wages and benefits plus other employment costs mean that the cost of running a business here is a lot higher.

Probably some other reasons I haven't thought of as well.

John

Originally Posted by Lotz-A-Landies

Thanks Simon

Wish I knew about that site a week ago!

Have been attempting to get the platform mount to attach an M60 (CPMG) to a pedestal on the Gun Buggy I'm restoring and they wouldn't ship outside the US.

The local price gouging on the Roverdrive issue is a bit more serious, we have been waiting for a Roverdrive for the LT95 box, but because of low sales volume on the Sx and Dx models to Australia, Roverdrive Gear Corp is starting to believe that there is too much financial risk on producing a Roverdrive for an obsolete box like the LT95. If there were a greater sales volume subsequent to lower prices on the LT230 and series models, they may not have the same concerns.And they are all probably made in China!

Diana

Who and where? What are the dimensions and mass? I will be in the US from 5/6/11 to 15/8/11 and may be able to help if on my route and postable.

Originally Posted by Brian Hjelm

Who and where? What are the dimensions and mass? I will be in the US from 5/6/11 to 15/8/11 and may be able to help if on my route and postable.

Thanks Brian, but I seem to have sorted it out by joining the MLU forum and a member in Texas has offered to re-post the item.

The frustrating thing is that I've been trying to work it out for a month and only finalised (I hope) the deal yesterday. Still have to send the re-post money.

Diana

Originally Posted by JDNSW

I think that there are several reasons for the price differences, although which are most important is probably both a matter of opinion and varies in different cases anyway.

1. Small market - this means imports are in small quantities (so overheads are spread over fewer sales), and tend to spend a long time on the shelf.

2. Red tape. The amount of red tape to run a business in this country is very large compared to the USA, for example, and the cost of compliance is high.

3. Lack of competition - this is largely a result of 1 + 2, but means that the local businesses can get away with gouging. Helped by exclusive sales licences with overseas suppliers who won't sell to Australia except through their dealer.

4. Dollar hedging - even though the dollar is high at the moment, a lot of the stuff on sale today was bought with overseas currency that was hedged when the dollar was lower, so the effective $A is a lot lower.

5. High interest rates. Very high interest rates in Australia by international standards (particularly US) means the cost of running a business is a lot higher here.

6. High cost of employment here. High wages and benefits plus other employment costs mean that the cost of running a business here is a lot higher.

Probably some other reasons I haven't thought of as well.

John

I'd agree with this. In our experience it comes down to a lack of competition and a small market. Small orders from overseas with a high shipping cost do impact on the sell price when you take into account clearing customs, brokerage and freight release and seperately currency fluctuations. But I honestly feel the biggest reason people pay high prices here is because there are so few people marketing the products. If I tell you an item worth 2 GBP in the UK is going to cost you $50 and you can't find another Australian Seller who disagrees that $50 is fair then you pay it. It's only the saavy buyers who shop globally that even realise just how far off base Aussie prices are. We personally don't operate like that but have seen in price research that others must be - or are getting really really crap wholesale deals.

Sheer greed has a bit to do with it. During my career in the truck and machinery industries, one employer marked up spare parts and accessories by adding 250% of cost into store. This place did not give trade discounts, claiming all customers were end users whether they were owners or repairers. They begrudgingly gave 10% discount to a major coal miner whose annual purchases were in millions. Another added 210% of cost but at least gave 10% trade discount to genuine trade customers and 17 1/2 % to their dealers.

I sell a line of obsolete taps and dies. My principal (virtually only) competitor sells the same items. I sell the dies for $18 ea. from 3/16" to 1/2" and am quite happy to do so. My competitor starts at $38 for 3/16" and 1/4" and the 1/2" is over $70. His overheads are no greater than mine. He works from a triple garage in his back yard. His only staff are his wife and his son who is a Disability Pensioner. How is this justifiable other than by greed. Suits me anyway.