Thread: My first ever post- Bunnings "Beat it by 10%" Bargain!!

Vernon,

I dont know about hardware but it has been the practise in food / grocery retailing for years. The big retailers make sure that their supplier offers the discount for the specials, "sponsor" the printed catalogues and deal with any issues with products. There are very strict (and expensive) quality criteria and assessments that have to be met before one gets the honour of supplying. Furthermore line fees have to be paid whenever a new product is introduced. Market forecasts for products have to be met or they get delisted and relisting fees are multiples of original fees. Similarly if products go out of stock they will be delisted and relisting fees apply. I know of one retailer who pays their suppliers 3 months after the goods are delivered, they are the fast payer.

16 years as a supplier to the FMCG sector has taught me what a stranglehold these companies have over their marketplaces. If WalMart hit Aus there will be a whole new level of competition and suppliers will be further hit. For example, Walmart insist their suppliers have toll free numbers so they dont have to pay the telephone bills. These companies do drive smaller competition out ruthlessly, they are economic parasites. Eventually the only people can supply tham are the Chinese or whoever will follow them as the lowest cost supplier. Local farms etc go out of business and the country suffers, ask American farmers.

I know from a freind in the game that the same happens in the musical instrument business.

I shop local, pay more and hope Australia can weather this madness.

It happens in other retail sectors. Different circumstances to the 10% B deal but all those 'below cost' products you see in supermarket brochures, the suppliers pay the supermarket the difference between RRP and its sale price - it is just an alternative advertising stunt. I'm not saying all suppliers/retailers do this, but a mate who used to work in the industry told me about it.

I realise that this practice (suppliers footing the bill) goes on with prearranged "specials", etc. but I didn't think it would apply to a one off discount of the type Bunnings do.

well i just got a Trito TRA001 at bunnies price matched and a further 10% all up came to $328.50 there display price is $380.00.

km

As a timber merchant in competition with the Big Boxes, I have seen several hardware stores in my area forced to close down due to the deals of undercutting prices by Bunnies.

Many people don't bother checking prices because they believe what's fed to them by advertising - "Lower prices are just the beginning" etc. You will probably find that many of requests for the 10% are not accepted for one of several reasons (sale, trade, not exact item etc). If Bunnies manage to do away with their competition (which must be their aim by offering the discounts), then the logical conclusion would be "Higher prices will be the end".

I support my local hardware store even if it's more expensive, but unfortunately I'm finding it harder to find stores that stock some of the things I'm looking for as many have closed down. (btw, this is one of my pet peeves)

nalmo, could you share some of the ways you compete with Bunnings etc.?

Do you offer a better standard of timber? Timbers better suited for woodworking? Wider choice of timbers?

my local bunnings wont match any price i bring them from Tile Importers they just say its trade pricing so no deal even though they (T.I.) just have the one price list and sell to public

Originally Posted by nalmo

As a timber merchant in competition with the Big Boxes, I have seen several hardware stores in my area forced to close down due to the deals of undercutting prices by Bunnies.

Many people don't bother checking prices because they believe what's fed to them by advertising - "Lower prices are just the beginning" etc. You will probably find that many of requests for the 10% are not accepted for one of several reasons (sale, trade, not exact item etc). If Bunnies manage to do away with their competition (which must be their aim by offering the discounts), then the logical conclusion would be "Higher prices will be the end".

I support my local hardware store even if it's more expensive, but unfortunately I'm finding it harder to find stores that stock some of the things I'm looking for as many have closed down. (btw, this is one of my pet peeves)

well its not really of great concern to me that it "peeves" you. but there are a few things to say on this. bunnings done the same thing in NZ with the same result the smaller shops shutting down yet they still do not have the monopoly, there are now two other major hardware stores taking the same approach IE mega store. its may well be unfortunate but it seems to be a natural progression and what the masses want.
you have stated yourself you are finding it harder to find stores that stock what you want and that is the primary reason bunnies does so well because for 90% of the people its a 1 stop shop.

i myself don't as i tend to buy middle to high end tools which are normally not found at bunnies, but should there be a case like today i will take advantage of it. and just for the record i could not find a cheaper one in Queensland so i used a company in Victoria for my price match

there is also the cost issue when buying from smaller shops that have inflated prices, if you have a fat wallet that allows you to not take this into account.. than good on you, well done.. but i reckon theres more people out there that need to be looking at the cost and in fact in some cases bunnies is the only way they can afford it.

i don't support bunnies 100% but they certainly have there place i buy most of my equipment els were. it just peeves me with the same old thing over and over about how they did this or done that, but should they sell the triton 1400w router for $99 all is forgotten

I'm sorry but to blame this all on bunnies is very short sighted for starters i would think the Internet has as much if not more to do with it as the people more likely to go to a small hardware shop can now source there items from any ware in the world

km

Originally Posted by Ron Dunn

nalmo, could you share some of the ways you compete with Bunnings etc.?

Do you offer a better standard of timber? Timbers better suited for woodworking? Wider choice of timbers?

i rekon service is the key well it is for me id go back if the prices are fair and the service is good

km

My thinking on this issue regarding the large stores is similar to what is happening with the current enquiry into food retailing - put too much of the market into too few hands, and even though it looks like there is competition, there often isn't with prices kept artificially high. People are either unaware, too lazy or simply couldn't be bothered to look elsewhere.

Maybe we should be asking ourselves - if Bunnies are prepared to sell 10% below a competitor's price, then why haven't they put that as the shelf price in the first place? My business is involved in a lot of quoting to builders. I go in at the price I am prepared to do the job at, no more, no less. If I win the job then I'm happy; if I don't then I don't regret that I should or could have done it at a lower price, that decision should have been made earlier. By offering a price matching service, they are saying - I'll rip you off if I can, but I'll give in if you catch me.

I certainly don't want to see business go down the track of US with there being no variety or choice in the retail market, but merely a group of franchise stores, all the same no matter where you are.

The internet certainly has given people the opportunity to shop wisely. I purchase over the net, but I won't go running to Bunnies saying - look at this price, can you do better. I feel this is unfair to the people who put their prices up on display - I don't like having it done to me in my business, hence I don't like doing it to others. So long as I feel I am getting value for money, then I'm happy. If not, well, I can keep looking elsewhere. I prefer to look for service, quality and price - very rarely do you get all 3, especially at Bunnies.

Originally Posted by nalmo

Maybe we should be asking ourselves - if Bunnies are prepared to sell 10% below a competitor's price, then why haven't they put that as the shelf price in the first place?

and

By offering a price matching service, they are saying - I'll rip you off if I can, but I'll give in if you catch me.

The crux of the matter, well said.

One of the things I have noticed about this debate is there is a marked difference in opinions between those of us who run businesses and have to contend with these behemoths attempting to force us out of business and the average punter who is trying to expend as little cash as possible. Our worldviews are radically different. The daily battle for survival changes your opinions in unpredictable ways.

For myself Im hoping oil gets to and stays at US$150 a barrel because it will make imported Chinese and other imported goods that much more expensive that Aussie goods will become price attractive again. We will also see then what we have lost in the way of food producing and manufacturing capacity and expertise. We have allowed global corporations to rape and pillage around the world with no accountability in terms of the long term social affects of their behaviour. When energy gets really expensive we will see what they have stolen from us.

Meanwhile there is a special down the road, grab that credit card.....

Thanks for the support Seb, good to know there are others who feel the same. The influx of cheap imported goods will decimate the Australian manufacturing industries. My policy has always been to support locally manufactured goods wherever possible, but I see the number of local suppliers dwindling on a regular basis while cheaper imported goods are replacing them. This won't last forever - already we have been notified of a 10% increase from one importer, others have advised a 15% increase in costs due to China's demand for raw material. If this trend continues, there will be very little manufacturing industry in Aus, and when China and its workers realise they can get higher prices, there will be little infrastructure here to resume production.

Unfortunately, large multi national corporations look only at the bottom line and rarely at the effects their decisions have on the local markets. Next time you're in Bunnies (or any other large store/supermarket), take a look at where it's goods are made. If you want a viable economy for yourself and your children, think about buying Australian made. Every such purchase is an investment in our future. If you don't, then there may not be such a choice in the future.

You know these endless Bunnings rants are getting old.

It's the same arguments on both sides over and over. Do any of you think your going to change anyone's mind with this or are you just doing it because you love the sound of a keyboard being tapped ?

I'm tempted to point out that living in a market economy benifits us all tremendously, it's the reason you can open a business and the reason you can turn a profit from your customers and that it's somewhat hipocritical to complain when someone with a different business model comes in and wipes you out, but if I said any of that it'd just perpetuate the silly argument.

Send your petition to the ACCC or your federal member, or stand outside Bunnings with a placard pointing out the superior prices/service/quality of the opposition.

BTW Bunnings have twice honoured the 10% with me on web pages printed from interstate vendors. It didn't cost the competition because with postage they would have been dearer than local.

I sincerely hope eveyone has a nice evening. I'm off home now...

Not exacly right, Bunnies don't charge the supplier straight up, what they do is threaten the supplier that they willdelete the prodcut if they can't buy at an ongoing price to meet, beet the competition. So in the long term Bunny's win, the suppliers lose and if it all goes to bunnies plans they get rid of the competitors then they put up the margins so we all lose.
Gussy