Why are parts so overpriced in Australia?

**rick130** · 26th October 2011, 06:50 PM

Originally Posted by Loubrey

We are never going to get past the point of a Safari Snorkel made in Australia that can be bought in the UK and express delivered in 4 days to rural West Australia for half the price you can buy it over the counter from a retailer in Perth.

[snip]

And it isn't the retailer at fault there

I know of a couple of brands (not car parts) where the importer (wholly owned by the overseas based manufacturer) wholesales their products to their dealers here at a price greater than they can buy and import them from the US, paying retail.

I've spoken to another importer (wholly owned subsidiary, yada yada yada) where they are charged a great deal more from one of their factories in Europe than their counterparts in the US too.
Each subsidiary had to negotiate their own deals, and just because they had the same parent company mattered not a jot, if they could screw over the Oz division, tough.

Volumes and freight was the reason given, (no backloading of containers, etc) although it appeared to really tick off the fellow I was speaking to.

**wagoo** · 26th October 2011, 07:15 PM

Originally Posted by omnibus

JUst my opinion but when ever i have dealt with anyone regarding Landrover parts and the said person has been of pommy lineage they have wanted exorbitant prices or if the price is right the parts have been of inferior quality. my examples are and you wont like it. but here they are and i stand by this .
Sunshine coast Landrover parts dealer YOU know the ones (exorbitant pricing) lots of poms in there and very ****ty service that I have experienced
1 member from aulro ( no names) here,, but he was pom( has parts, that I need. offered for ridicualous price then when i agreed told me parts werent for sale yet he sent me the message saying they were in the beginning
A local gentleman lives close to me wanted to sell me stuff and then come round to my parts stuff and take wat he needed for nothin that friendship didnt last long .

I may enjoy landrovers and they maybe from england but I am yet (and I am 36) but I am yet to meet a english gentleman .
thats my 2 bob
i know it is a bit of a pom bash but TBH that is the only problem i have had buying parts for my landies is when i have to deal with a pom
no offense intended

Geez, fancy that! A Pommy bashing post on Aulro without someone named Brian at the Helm.

Wagoo.

**slug_burner** · 26th October 2011, 07:17 PM

Originally Posted by lr90freak

wow........

Enjoy your land rover, shop around and stop complaining, its so boring!

I think the above says it all. "Let them eat cake" I think that one did not go down well either.

maroochy · 26th October 2011, 08:05 PM

g'day in post #31 a reference was made to a certain dealer on the sunshine coast.YOU know the one he said .well i happen to live on the sunshine coast and know this business,although i have not spent a fortune there,i have been there a few times,and yes the blokes i have dealt with are poms and they know what they are talking about,they are young,energetic,polite,and go out of their way to help you,which i can tell you is a very rare thing on the sunshine coast.
this place(the sunshine coast) is renowned for shocking service and hasn't improved in the 20 years i have lived here ,so perhaps we need a few more poms here.
no i am not a pom and have no connection whatsoever with this business..cheers

**CraigE** · 26th October 2011, 09:27 PM

Yep I am a bit sick of the BS purported by a lot of Australian suppliers. The original example of a U bolt $2. Yep and the retailer in the UK is probably making 50c to $1 on that, so wholesale would be around $1 for an Australian importer, add 10c for GST and maybe 50c for freight max as they would be buying a container load of goods min. All up costs the Australian retailer $1-60 max maybe $2 at a stretch, put 50% or even 100% mark up and it is still only $3 or $4 max not $15 and you can whinge about volume all you like. Judging on some of these prices there is well over 1000% mark up on some items. Either our retailers are being ripped and need to get smarter and pass on the savings or they are just ripping us off blind.

**HangOver** · 26th October 2011, 09:56 PM

I get that if you want convenience you pay more, pretty simple and fair enough. If you think its too expensive, just don't buy it, but.......

what really gets me is when you can by an "Any Real Brand"

locker in Australia where they are made for $xxxx, or you can wait till it gets shipped to a retailer in the US then shipped back again, to you including shipping, for less than you can buy it for locally !
Now that is just mental and no excuse about convenience there.

Tombie · 26th October 2011, 10:17 PM

Just remember all the savings made whilst sending $$$ outside our borders will all end up costing us in the end!

And those who manufacture here and export get export credits, tax breaks etc enabling the price to be much lower.

Also, sales per model in Oz...
Let's say 2000 per year.
Same model in USA say 15000 per year.

If the business wants xxx profit per year, not per sale then we can see how it can be done!!!

This is why TRT won't be running by the end of this year! I can't machine parts, buy materials etc for less than finished parts ex USA.

**Lotz-A-Landies** · 26th October 2011, 10:21 PM

Originally Posted by CraigE

Yep I am a bit sick of the BS purported by a lot of Australian suppliers. The original example of a U bolt $2. ...

But how many U bolts do they sell in a year? Did they buy it when the Aussie $ was 0.30GBP at the same time as oil was $170/barrel US so how long has it been sitting on the shelf using up storage space as a black hole in the vendors pocket, possibly part of the interest on the business loan covering all the stock. Just so they could have a set of 8 sitting on the shelf waiting for us to buy, or more frequently not buy.

Now I don't agree that we should be able to buy an Aussie product cheaper from the UK than we can buy it here, but it comes down to volume and purchasing power. We used to distribute frozen foods, we would buy pallets of product from Edgel-Birdseye but at the same time David's Holdings were buying container loads. David's could sell Birdseye frozen peas through their Jewel Food Stores cheaper than we were getting the same product from Birdseye direct. We had to run a freezer truck 160Km to pick it up and keep it frozen until we delivered the product to the corner shop's door 60 Km further down the coast from our depot Yet the corner shop's customers were complaining that the price of the peas at the corner shop was a rip off.

Just consider the corner shop your local LR parts vendors, we were the equivalent of the Aussie wholesaler and Paddocks equivalent of David's Holdings. It may put a different light on the subject, but I bet a lot of you will keep shopping at Jewel!

**CraigE** · 26th October 2011, 10:53 PM

Originally Posted by Lotz-A-Landies

But how many U bolts do they sell in a year? Did they buy it when the Aussie $ was 0.30GBP at the same time as oil was $170/barrel US so how long has it been sitting on the shelf using up storage space as a black hole in the vendors pocket, possibly part of the interest on the business loan covering all the stock. Just so they could have a set of 8 sitting on the shelf waiting for us to buy, or more frequently not buy.

Now I don't agree that we should be able to buy an Aussie product cheaper from the UK than we can buy it here, but it comes down to volume and purchasing power. We used to distribute frozen foods, we would buy pallets of product from Edgel-Birdseye but at the same time David's Holdings were buying container loads. David's could sell Birdseye frozen peas through their Jewel Food Stores cheaper than we were getting the same product from Birdseye direct. We had to run a freezer truck 160Km to pick it up and keep it frozen until we delivered the product to the corner shop's door 60 Km further down the coast from our depot Yet the corner shop's customers were complaining that the price of the peas at the corner shop was a rip off.

Just consider the corner shop your local LR parts vendors, we were the equivalent of the Aussie wholesaler and Paddocks equivalent of David's Holdings. It may put a different light on the subject, but I bet a lot of you will keep shopping at Jewel!

Agreed, but generally a supplier will not just bring in 6 U bolts only, unless it is a specific and urgent order and I have no issue with being charged more for that, but most often a sea container or more are brought in, so to charge $15 for a part that retails for $2 in the UK is just utter crap, full stop.
Not talking about perishable goods so comparing perishable goods against hardware is not comparing apples with apples. I am more than aware of this as I live remote and we pay $1 extra for a newspaper. I do know what you are saying, my wife has run takeaway shops and another good example is Coke, was always cheaper to buy from Woolworths than Coke direct. The issue is coke could sell to smaller shops for the same and still make money, but they choose not too.
Even if importer x decided to pay full retail at $2 for a u bolt it still should not retail here for $15, that is just crazy and blatant gouging. I do know for a fact that as a retailer you can negotiate wholesale prices from companies like Bearmach, Paddocks etc and not even have to buy volume.
Look I am happy to pay a little more to buy local say around 20% more, but not anywhere from 100% to over 1000% including freight. Then there is the issue of delivery, quite often I find with certain practices it can take 12 days plus to get items delivered inside Australia and only 4 or 5 from the US or UK and in Australia it varies so much. Yes there are suppliers I will use and some I wont both inside Australia and outside.
Another good example was electrical plugs $27 here, $1 ea from Hong Kong, 2700% markup. Same item.

**JDNSW** · 27th October 2011, 05:47 AM

Originally Posted by CraigE

Agreed, but generally a supplier will not just bring in 6 U bolts only, unless it is a specific and urgent order and I have no issue with being charged more for that, but most often a sea container or more are brought in, so to charge $15 for a part that retails for $2 in the UK is just utter crap, full stop...........

The point you are missing is, yes, the importer will bring in more than six U-bolts - and most of them will spend years sitting on the shelf! With loans to the business owner probably costing 10% per annum or more, a simple exercise in calculating compound interest will show that the the real cost of these to the importer can easily get to several times the original price paid, even without adding the cost of storage and bad estimates of what to buy.

Which does not explain all the price difference, but it does go a long way towards doing so.

But ultimately, the price is dictated by what people are prepared to pay. And with it getting easier to know what you can get things for overseas, local suppliers (at all levels - wholesale as well as retail) will be forced to get a better deal from their suppliers, or go out of business, and will point this out to their suppliers, who will come at least part of the way, since they want to stay in business as well.

Local prices will always remain higher because of the points noted earlier, and most people will remain prepared to pay a bit more for local availability.

You get the same sort of effect at a more local scale. I have given up trying to get parts from the Dubbo Landrover dealer. I have never found a part they stock - they do not even stock filters for my Landrovers (but the local filter specialist does), and when I order in parts it takes them twice as long to get them as I can get by mail order from one of the independent Landrover specialists, and usually cost twice as much.

John

Thread: Why are parts so overpriced in Australia?

Thread Tools

Bookmarks

Bookmarks

Posting Permissions