The Aussie Dollar

[smeds]

One has to wonder when or if, we will start to see a flow on effect on all of the imported tools and machinery prices. Will the likes of Carba-Tec and the others start adjusting their prices so we can start saving some money on our purchases. Or am i dreaming?

[Dengue]

will someone please "tell 'im he's dreamin"

[chrisb691]

Jill told me to tell you yer dreaming. :D

[smeds]

Theoreticlly dreaming, but in reality when the dollar goes up then imports become cheaper. If the price of whitegoods, tvs, cars and the list goes on become cheaper for us to purchase, then tools and machinery, especially from Jet, Carba-tec and all of the others who import their products, can not remain immune and leave their prices the same.

This is known in the legal world as price gouging, they should be adjusting their prices to reflect the rise in the Aussie dollar and not just watching their bank balances get fatter at our expense. :no::no::no:

[BobL]

The Aussie is only really rising against the US$

So prices of tools will only fall if they are completely made in the US.

What will most likely happen is that tool prices in the US will rise or else they will go broke. They can't sustain those prices for much longer.

No Wait, they are already broke, I mean "more broke than they already are".

Cheers

[smeds]

BoBL, even though our dollar is rising against the greenback it still effects imports on everything coming through our ports. The vast majority of goods made overseas trade in US dollars, as it is, and has always been seen to be the strongest currency. It doesn't matter if the product is made in the US or Taiwan, the product is still linked to the greenback and as such the price is adjusted. There are even companies here in Australia that only trade in US dollars, my wife used to work for a company in Melb who exported their product overseas and they would only trade in US dollars.

So it doesn't really matter where it is made as just about every overseas manufacturer deals in US dollars, especially Jet who are a US company.
Like i said with white goods and tvs which aren't the last time i looked made in the US, their prices will shortly start to fall because of the strength of our dollar.

[BobL]

BoBL, even though our dollar is rising against the greenback it still effects imports on everything coming through our ports. The vast majority of goods made overseas trade in US dollars, as it is, and has always been seen to be the strongest currency. It doesn't matter if the product is made in the US or Taiwan, the product is still linked to the greenback and as such the price is adjusted. There are even companies here in Australia that only trade in US dollars, my wife used to work for a company in Melb who exported their product overseas and they would only trade in US dollars.

So it doesn't really matter where it is made as just about every overseas manufacturer deals in US dollars, especially Jet who are a US company.

Sure I know this, but just because the finances and trade are done in US$ doesn't mean that prices from 3rd parties will drop. In some situations currency devaluation causes prices to go up. What happens is the third party country (eg Taiwan) who make/sell product in US$ still don't want to be caught holding too many worthless US$ so they use the falling US$ as an excuse to increase their prices over and above the fall rates - after all its their profit that has to retain or increase in value. I don't blame them I wouldn't want to be left holding a less valuable currency in my portfolio.

If the raw materials and energy prices go up faster than the $US goes down then that just adds to costs. Our Aussie raw materials companies are just as much to blame about price rises as anyone else.

[hardwoodjoint]

I did a comparison on stuff from the US (Rockler) and Carba Tec, even with postage it's still cheaper to buy abroad.
I ordered an up-cut spiral bit on a Thursday and it arrived the following Wednesday.

Cheers
Tony

[Ozkaban]

With the dollar at these levels, for me it becomes interesting to look at buying direct from US and elsewhere for smaller items. Usually, if we're much about 80c/USD it's worth it.

Don't know if many prices will come down locally. The exception I've seen is the big print on the front page of Gary Pye Woodworking (http://gpwoodturning.sitesuitestores.com/) which shows price drops on pen kits. Wouldn't hold my breath on big machinery though!

Cheers,
Dave

[BobL]

With the dollar at these levels, for me it becomes interesting to look at buying direct from US and elsewhere for smaller items.
It sure does!

Usually, if we're much about 80c/USD it's worth it.
It depends what you are purchasing. eg Chainsaw parts are still worth it at as low as 60c. The big issue for me is warranty so I tend to buy stuff that is not likely to have these probs.

The us retailers are really hurting. I have never seen so many offers and specials from places like ENCO. Their prices will just have to go up. The only reason I'm hanging onto my few US$ is because I have to travel there from time to time.

[munruben]

Interesting to note though, towards the end of last year when the $AUS dropped in value against the $US that one of the big woodworking suppliers immediately increased their prices quite considerably on all stock including their current stock at hand. This increase was across the board and when I mentioned to one of the sales staff that surely all their stock would not be new stock and some of it must be at the old prices I was told that the store only had "new stock" and when I told them that Gary Pye had the same item I was going to buy, at the old price plus 20% off. I was told to "go and buy from them then".
I see now the $AUS is stronger against the $US that the same store hasn't brought down their prices.

[Bob38S]

Anyone willing to believe that our $ going up means that what we import will go down can contact me through this forum.

Boy! Do I have a deal for them.

There is this big bridge in Sydney which we are going to sell for scrap. I am prepared to let you in on the ground floor and buy in really, really, really cheap. All I need is for you to cough up some $ and we'll go from there.

Seriously, however, how often have you seen the price of a woodworking magazine go South because our $ has gone North. I have only ever seen the prices go North. More is the pity.

Just bear in mind that we need to continue to support our locals during this time [meaning those who also support us] - if we don't then when we need them there won't be anyone there.

Regards,
Bob

[BobL]

Interesting to note though, towards the end of last year when the dropped in value against the that one of the big woodworking suppliers immediately increased their prices quite considerably on all stock including their current stock at hand. This increase was across the board and when I mentioned to one of the sales staff that surely all their stock would not be new stock and some of it must be at the old prices I was told that the store only had "new stock" and when I told them that Gary Pye had the same item I was going to buy, at the old price plus 20% off. I was told to "go and buy from them then".
I see now the is stronger against the that the same store hasn't brought down their prices.

That's what I mean by volatility - whenever currencies vary quickly up-or down business people are spooked by it (or see a chance for easy $$,) so prices don't go down, they might even go up :o

[Ozkaban]

That's what I mean by volatility - whenever currencies vary quickly up-or down business people are spooked by it

Media love this - a perpetual story...

"The Aussie Dollar is rising - the poor exporters are doing it tough!"

then

"The Aussie Dollar is falling - the poor importers are doing it tough!"

repeat, ad nauseum

Cheers,
Dave

[glenn k]

BobL why are chainsaws parts cheaper in the US? I was going to buy a few new saws and a mate says don't buy them here buy them in Germany I paid 1/2 price in the US should be cheaper in Germany. So I went to a chainsaw shop a few km from Vibling(spelling) where they make many Stihl saws and they were the same price as in Melbourne.
Why does everyone say our $ is rising? We have one of the most stable currencies in the world, we did have a fall when the US pulled $'s out because they needed them.
When the Euro was introduced or $ was worth 60 euro cents it stayed the same + or - 4 cents for 10 years ( the US$ went from ~55 to ~98 in this time) we our now still around 60 euro cents even the Poms are almost back to normal. On the news they say gold's at record highs it's rubbish it's the US$ at record lows.
Pricing anything in US$ is like taking levels off a bouy in the bay with out a tide chart. The world should price every thing in Aus$ so we know if comodities are going up or down for real.

[BobL]

BobL why are chainsaws parts cheaper in the US? I was going to buy a few new saws and a mate says don't buy them here buy them in Germany I paid 1/2 price in the US should be cheaper in Germany. So I went to a chainsaw shop a few km from Vibling(spelling) where they make many Stihl saws and they were the same price as in Melbourne.

That is my experience as well

Sales tax is a small differential.
In Germany it's 20% and goods must be advertized as such, Tourists and overseas purchasers can get it back but it's complicated. If Germans are paying the same price as us that means Stihl is actually getting a little less and the German Govt gets more.
In Oz we're 10% inclusive in the advertised price and we pay more comparatively than Germans - the difference is in transport costs and given we are a smaller market so stores have to survive on smaller sales numbers
USA does not advertize sales tax inclusive even though they range from nothing to about 10% - if you buy from out of state or OS it's automatically nothing.

Size of market is the bigg difference
The US market for CS products is huge, probably 10 times more that CS ownership in Germany (where its very difficult to just go hog wild with a CS). Germans automatically buy maybe one Stihl, US folks have more choice and buy a hell of a lot more saws. Just like everything they do, 1 car and 1 saw is not enough they need 4 cars and 14 saws and so will the wife, plus a few guns on the side - hell they're so cheap why wuldn' y'all do that :oo:! They also continually buy new stuff and as soon as it's out of fashion or needs a service they trade in or up. They have very big rubbish bins and the sheer bulk of STUFF dumped and sold is HUGE. This HUGE turnover puts a lot of pressure on everyone (including Stihl) to keeps it's prices down and it does not matter if they get only 50% of the profit margin per German saw because they sell 10 times more saws. The same goes for parts

But it cannot last - their funny money economy is in big trouble.:D

[Expat]

Same discussion is happening on all the Canadian forums! We're going on a drive across NY, Pennsylvania, Ohio and into Michigan for their Thanksgiving and the Black Friday sales and hoping the Loonie stays high against the Greenback. There are a few stores I want to visit - can't get down to Grizzly in Muncie, PA. though - and prices there will be very tempting if we're at par or better. There are some items though that are always better value here than across the border and the "neighbours" are forever driving up here to take advantage!

[orraloon]

The point of business is to make profit. To think otherwise would be dreaming. Taking advantage of the currency ebb and flow is always going to happen. We poor consumers are a resource that gets farmed. Whether we get harvested, milked, fleeced or bled dry they aim to get our money. The best we can do is to shop around and encourage competition. The bigger the business the more likely they are going the profit maximization road. As I get older and come to understand my small place in the system I am still disgusted with this culture of greed but no longer surprised.
Am I still hopeful a good serve will make any difference?

[rrobor]

Most world prices are based on the US buck and as thats in the toilet prices are low. Now I see there are moves afoot between the Chinese and mid east oil producers to set the value of money against a raft of currencies, plus gold. If that happens prices will rise and the US will be cut loose to sink or swim. The US is doing a poor doggy paddle at the moment, getting hit with that she will be spluttering. Interesting times ahead.

[smeds]

well i think that answers all of my questions on the subject, one good thing that i did learn is from expat, my mate is going to LA next year for 12 months and if what you say about the price of things over there when it comes to the odd bargain, i think he will be mailing a lot of things back for me. Now how much is freight for a table saw i wonder LOL.:2tsup:

[Expat]

I get asked all the time why I never, ever keep any of the equipment I sell in stock. Two reasons really.
Number 1 is not that I am cheap, it's because the vast majority of the products I offer in my business are "custom" or at the very least customisable. So what the heck do I keep in stock and how many of them and in what sizes? It's almost impossible to do it as the previous distributor for my main vendor in Oz found out 15 years ago when they went bust!
The second reason and the one that affects any business that imports it's product line is that an idiot named Paul Keating - with the blessing of that class traitor Lil' Johnny - floated the Aussie dollar and handed the Australian economy over to the profiteers and speculators. So if I had 20 or 30 helmets bought from my vendor 6 months ago on the shelves why would anyone buy one of them when they could get one at a better exchange rate now?
That's why companies selling imported products do not drop prices immediately if the Aussie gets hot - unless of course they running an account with the vendor overseas or if they are keeping stock levels low and constantly moving product in and out of the warehouse.

[Big Shed]

That's why companies selling imported products do not drop prices immediately if the Aussie gets hot - unless of course they running an account with the vendor overseas or if they are keeping stock levels low and constantly moving product in and out of the warehouse.

Have a lot of sympathy for that argument Expat, but would have more sympathy if the reverse were true also.

As was said above, when the dollar drops prices go up almost immediately, when the dollar then recovers they (almost) never drop to previous levels.

This doesn't only apply to tools and machinery, it applies to almost all imported goods.

One only has to look at the speed of petrol prices rises when oil goes up, and the extremely leisurely pace of it dropping when oil goes down. LPG punp prices are another example.

[bsrlee]

Some stuff on the Carbatec web page has dropped - the 400mm wide drum sander is $799, and it was over $1000 a few months ago - the drop may be from a different manufacturer, but it is a drop. But the disk sanders look to still be the same price they were when the $AU went down, so who really knows.