Could this be the start of change in Aussie retail?

[Jekyll and Hyde]

Retailers scared of 'online shopping monster' - Business (Australian Broadcasting Corporation)

Finally, the head of one of the biggest retail chains in Australia has come out and admitted exactly what we all already knew - GST on sub-$1000 imports won't make any significant difference. Will it be the start of more affordable prices locally, or will it get swept under the rug, allowing the death of Australian retail to continue accelerating?

[tea lady]

I don't buy online cos of price! I go online cos the shops don't have what I want. While the big green shed and others of their ilk still believes they have "everything you need" I shall be looking on line! And for better quality too. Chasing price just gets to the lowest of everything!

[Big Shed]

I had the perfect example of why Australian retail is in trouble last night.

Needed a 16Gb Micro SD card and wanted it today, so looked up Dick Smith website.

Their price was $79.96, Dick Smith branded so could be anything, which surprised me a little.

So went to Ebay and found the same 16Gb Micro SD card, Sandisk brand, from an Australian supplier for $15.94 delivered to my door.

Perhaps I can afford to wait a few days.

Margins have gone beyond reason, wouldn't be so bad if this was an isolated case.

Just look at the likes of Hare and Forbes and similar machinery importers.

When I bought my WL-46 lathe the dollar was at around $0.60, it is now over $1.00, yet the price of the WL-46 has increased by 25% +++ in that time.

[beer is good]

The fact that imports under $1000 don't attract GST was red herring from Gerry Harvey, and he soon shut up when consumers did not support him. A billionaire is surprised when consumers don't agree with his call for consumers to pay more tax???

Remember, it is not just the low wages in China that gives us cheap goods. Businesses don't have to pay 9% super, workers comp insurance, holiday pay, paid public holidays etc, etc.

But I think that the rents shopkeepers are forced to pay to the shopping centres and the landlords is a big contributor to the high prices for goods in Oz compared with other countries.

I fear that we are in an upward spiral - as our costs increase we want a pay rise (and the retailer raises prices) and then it all starts over again.

I would like to know how countries without Australia's wealth, like Switzerland, Germany and Sweden manage?

[Geoff Dean]

How long will it be before Australian retailers set up online shops that are based overseas so that they can then sell into Australian without a GST component, on goods under $1000?

[eskimo]

if aussie retailers are not ripping us off month after month, how is it then that they can have half yearly or end of financial year and other types of sales with 60 - 80 % off....ya cant tell me they are selling at or below cost...what a load of balonney...even gerry has sales with 50% off

[Stustoys]

How long will it be before Australian retailers set up online shops that are based overseas so that they can then sell into Australian without a GST component, on goods under $1000?

They need to be very careful doing that, I believe the ATO has said it would look very closely at any such set up. It likely wouldnt work anyway as if all they did was take the GST off their current price I doubt they would sell anything. For example a set of allen keys, $34 down the road, no postage, (if they set up an online store so they didnt have to charge GST) online $30.91 + postage. Same thing from USA about $8 + postage. GST isnt the main issue. I doubt I would buy much from OS if I could get it locally(still possibly online) for 10% more.

Stuart

[Master Splinter]

There was a report done recently by one of the policy/thinktank institutes (Australia Institute possibly) that compared what people thought was a reasonable markup vs. the actual markup - most thought a reasonable markup on costs was 30-40%; actual markup on the items surveyed was more in the region of 100-150%.

So retail has a lot of thinking to do - and Woolworths, this does not mean "Hey, if we introduce more of our own house 'select' brand that's priced just a bit under the category leader, while vastly reducing the range of our house brand budget generics, we'll pick up extra profit from cheapasses as they don't have that real cheap option anymore!"

Cynical 'the customer is dumb and won't notice' attitudes like this explain why I shop at Aldi while happily picking the eyes out of Woolies or Coles specials.

Another I hate is the publishing industry, were new fiction releases come out in that 'trade paperback' size (you know, the big ones that don't fit on your bookshelf and weigh a tonne and cost $10 more than standard paperbacks) and are the only version of the book available the first 12 months - I used to be a big book buyer, but since this profit maximising started I've switched to ebooks completely...and I don't mean the overpriced offerings from local ebook stores, either.

[Jekyll and Hyde]

Remember, it is not just the low wages in China that gives us cheap goods. Businesses don't have to pay 9% super, workers comp insurance, holiday pay, paid public holidays etc, etc.

China has nothing to do with it. Bilstein shocks are made in Germany. I can buy a set of 4 for my car for over $800 locally, or I can have them landed at my door out of either the UK or USA for around $400. That is through normal bricks and mortar retailers, one of whom has been running in the UK for over 35 years.

[Big Shed]

We can't put the blame completely on the retailers either.

The distribution chain in Australia, particularly for imported goods (and what isn't these days) invariably involves the importer. In a lot of cases this is owned and operated by the manufacturer. Check out what digital cameras sell for here as compared to OS, eg New York and London. The photographic retailers have laid the blame for the high retail costs here failry and squarely on the Canon, Nikon etc.

Of late some of them have seen fit to reduce the wholesale prices to retailers with the result that at least some digital cameras are now selling here for close to world prices.

[barkersegg]

Previous poster summed it up nicely.............the retailer will sell a commodity at a price he thinks people will pay for it - the more $ the better for him.....I'm not talking manufacturing as that is different with factors like materials, labour and overheads both direct and indirect....but the retailer doesn't have all those costs......essentially he just buys a product and sells it for a profit rarely without contributing to the value adding of the goods........granted he may employ staff and has their wages, super, payroll tax and overheads like rent, rates, services etc - there are heaps of them .........and they are essentially paying 40-50% less for their goods now due to their forward echange contracts anyway that they hold usually for 6 months......strangely their prices haven't dropped and they seem to be collectively blaming overseas cheaper imports - then I'm afraid the consumer doesn't have much sympathy for them....no retailer pays the same price from his supplier that that supplier will sell on the open market - so the retailer is still getting it much cheaper than we can ....if we as consumers can buy our goods cheaper - then either the retailer matches what the customer is willing to pay or we go elsewhere - that's where the internet is just another way for consumers to find the best price for what they want......there, rant over...sorry about that....I hate knowingly getting ripped off...

[electrosteam]

The other day I enquired at a local hobby retail outlet about some items ordered quite some time ago.
The proprieter telephoned the importer, in front of me, and blasted him for being dis-organised, losing orders and general incompetence.
They both knew that I could go directly to a retail outlet overseas that had ample stock on the shelf, probably with a better price, even with postage.

The discussion moved around to trying to solve the problem.

On idea floated was for the retail outlet to order directly from the factory, get a tracking number, then the goods would be delivered though the normal wholesale channels.
This allows the retail outlet to maintain catalogs, have samples on the shelf and encourage walk-in to view other items.

I like the idea of having people available that can provide quality advice, plus catalogs and samples.

John.

[Pete F]

If you want to get annoyed, look at the cost of software. The precise same piece of downloaded software or music when purchased through an Australian distribution network (eg Apple) will cost more than the same thing from the US distribution network. Nobody can claim anything like economies of scale etc as it's the same software, possibly off the same US based server! There is no middleman, distributer, etc etc. So why is it more expensive in Australia? Because they can. That's what DVD regions are all about, gouging the most they can from who they can.

Pete

[RayG]

The other day I enquired at a local hobby retail outlet about some items ordered quite some time ago.
.

Hi John,

I remember ordering some parts through a local outlet, and the shop owner, was relentless about blaming the distributor for not sending the orders on time...

After being fobbed off with a whole series of increasingly ridiculous excuses, I rang the distributor myself, and found out the retailer in question had his account put on credit hold, and they weren't taking orders from him until he settled the outstanding accounts... all the excuses he told me were just lies.

I got the parts I wanted on line, posted from the US in less than a week...

That retail shop no longer exists... I wonder why...

Regards
Ray

[Pete F]

Ray, that's another thing that erks me about buying locally, the -poor service. Good luck if anything ever goes wrong and you want to get it repaired. The major retailers tend to be better, but the smaller guys, you'd think you were asking for their first born son! They'll inevitably try to blame the customer, when that fails come up with some other excuse as to why they shouldn't have to stand by the warranty. The irony is that the burden of warranty (if you can call it that in Australia) typically falls on the distributer and not the retailer. I think it's simply a cultural thing here. Mind you it's better than the Chinese "warranty" where they just laugh at you while locking the door so you can't get back in!

Pete