Are Australians being ripped off?

[barito7]

G'day

 

Love the CA site and I'm sure many other Australians do. It allows us to see what people think of technologies that haven't hit our shores yet.

 

One thing that certainly gets up my nose is the exorbitant prices Australian vendors see fit to charge us for kit that is remarkably cheaper overseas and for what I can gather for no major reason. For example:

 

Onkyo Stereo receiver TX8555

 

Online in Australia: $699 AUD

Online Amazon.com: $230.00 USD

 

Onkyo TXNR-808 network receiver

 

Online in Australia: $1999 AUD

Online Amazon.com: $999.00

 

Marantz SR7005 AV Receiver

 

Online in Australia: $2399

Online Amazon.com $1599.00

 

The list goes on. Considering that the AUD is on par or higher than the USD right now, duty on goods starts at $1000 and I can fedex this kit for less than $150 I do not believe there is a reasonable explanation for charging like a wounded bull.

 

Powerwise, there may be an issue but I thought in general this is not an issue because most manufacturers must cater for a global market. Warranty is one thing but if I buy anything on credit card these days my bank covers this and besides...what a very expensive warranty!

 

I am happy to convinced otherwise that this is not daylight robbery and thought that if there are any vendors out there following CA that they might provide an explanation.

 

Cheers

 

[PeterSt]

G'day there. Yes, nice subject ...

 

Now let's see for one example. The TX8555.

 

Suppose I get that from Amazon. That would calculate (incl. USD 7 for shipping) into euros like 237 / 1.4 (changes daily) = 169 euro.

Officially I'd be paying something like 20% tax, so it totals to 203 euros.

 

If I buy it from Amazon.co.uk, it's GBP 300. I don't see the shipping costs, but let's say GBP 10. That's 300 * 1.15 = EUR 345. Tax is already in the 300.

 

If I buy it here in The Netherlands, it would be something like EUR 400 (includes tax).

Hmm ...

Which is USD 560.

 

This only indicates what exchange rates (as seemingly the only influence) can do to you.

But of course there's distributors, importers, and maybe dealers. Also notice the difference -as in this case- that the Amazon-US Onkyo comes from Amazon directly, but the Amazon-UK comes from some company.

 

And then there is the ever so important this :

 

The other time I had to buy relatively heavy thingies, which makes shipping *normally* as expensive as the thingies themselves. I found the one and only supplier in the US, and shipping costs would be USD 280 (this was UPS which btw is the most expensive one amongst them). Then I found the same product on Amazon, sold via that same supplier. I took my chances and estimated normal shipping rates from Amazon. IIRC that was USD 40. So, USD 280 against USD 40, both shipped from the US but with the difference of UPS having a contract with Amazon - the original supplier not having that.

 

Forces may be at play beyond your knowledge and imagination, and with good preparation you most often can obtain a "discount" by going the proper routes.

Sometimes you must know about the "tricks" company apply to officially have arranged for taxes (not to be payed by you) while clearly they have been avoided. You have to know that the shipper is involved in this, and while UPS can arrange for such a thing, FedEx can not.

I buy from the US, but the warehouse long gone is in Germany next door (within the EC, free for commerce).

 

If I buy from Japan right from the factory, they still "manage" to direct me to a distributor because it doesn't go otherwise. I'm fairly sure that whatever I buy directly from the factory in Japan, is produced in China or Taiwan. STILL, if I buy the particular product in amounts of 50-100 overhere, IT IS 100 TIMES MORE EXPENSIVE.

That was no typo. One-Hundred-Times.

 

Why not see it from another angle;

I can buy one 0.1c resistor from two electronic companies (RS and Farnell) and shipping is free. Especially Farnell has warehouses in two countries, but not the Netherlands. So, if I buy two resistors of a different value, chances are 50% they come from two warehouses outside the country (UK and Belgium). UPS is the courier.

I can do this over and over again, day in day out, and UPS trucks are queueing up here.

What does this mean ?

 

I'm not saying that from the margin of the 0.1c resistor (which originally costs 0.0001c perhaps) UPS can be payed. But I do say that one way or the other things are way Way WAY overpriced in order to or let some get far too rich, or let some perform endless stupidities.

And so it is true that other things from the mentioned companies are usually 4-5 times over priced compared to other "shops". Other things ? ALL things. But one of the problems is : it is hard to get those things elsewhere.

Oh, you can ... but EUR 20 for shipping comes first. Yes, also for that 0.1c resistor.

 

Well, let's stop here. Enough reasons to have large fluctuations in prices. Just get it where it's the cheapest. Or where you can expect support (don't underestimate this).

 

Cheers,

Peter

 

 

[One and a half]

1. USA population 307 million, Australian 20 million, 15 times the size. The sheer volume of the USA market equates to better discounting from manufacturers since the market is 15 times larger for its buying power. Given the current state of economic doldrums in the USA, manufacturers are keen to keep prices low to maintain throughput.

 

If your volume is low, the main manufacturer won't deal with you directly, the choices are another distributor at a higher price.

 

2. You still need to support a service shop/warehousing locally if you import one or 10,000 products. These come at a cost.

 

3. Your prices do not allow for taxes in the USA when shipping between states and intrastate.

 

4. Amazon will !not! ship anything to another country if there is an existing distributorship in that country, especially electronic components.

 

5. Your prices don't take into account the fees from your bank for the transaction, some take a fixed commission, some work on a lower than normal exchange rate.

 

While the rates are on par, you can buy US goods and have them delivered to your country via 3rd party buying houses, even the Onkyo receivers. There are risks with that, some manufacturers state they won't honour any warranty if the product was bought in another country, period. Some do like cameras, but rarely for hi-fi electronics. These methods are to protect the distributors' interests.

 

The Marantz price you mentioned is at recommended retail pricing, a quick search reveals you can buy the same receiver for AUD1680 or less, your choice, in gold or black!

 

[Paul R]

The online services up here are highly competitive, and it is relatively easy to find the best price. I'm sure that isn't so in New Zealand, and I expect it is not true in Australia either.

 

You might want to do some more price searches - I would expect to find a difference of about +15% to +20%. That is what my buddy finds is true in NZ.

 

-Paul

 

 

[barito7]

One and a half, which site did you see the Marantz for $1680 aud on?

 

Cheers all for thoughts

 

 

 

[barito7]

http://www.thevine.com.au/tech/gadgets/aussie-tech-price-rip_offs-go-under-the-microscope20110923.aspx

 

[Jay192]

There are some differences - but ....

 

The US tends to be a price-maker market, Australia is a price taker.

 

There's scale differences too - but I don't fully buy that argument as most city sizes in OZ are decent enough in OZ to achieve scale. I think it's more a case of what the importer can get away with, and having said that, they can't raise the price a lot when fx is weak too.

 

Thinking about the things I've purchased recently from offshore: from OZ; I purchased my Canon camera in HK for 40% less than OZ (that was post bargaining price at both ends). I buy all my car tyres from the US. (I have them air freighted, tax paid, 30% cheaper than OZ). I buy my sporting stuff from California.

 

From Japan; I was looking for my DAC, Blu-Ray etc, - bought my DAC in HK, (Japan was 24% more). The Blu-Ray is smaller $, but still 35% more than the US (and it's a Sony!). Japan is quite strange when it comes to prices. IMO there's a lot more 'deflation' to happen until prices are 'normalised'. It's a sad fact, but many retailers know a lot of Japanese don't have easy access to overseas online buying. So they tend to have fixed & high prices. There are local Japanese based websites that have prices between local retail stores and the US online. I think some of my colleagues have seldom bought anything in Japan. It's a common sight to see the (overseas) courier man in the apartment block every night!

 

[onthebeach]

No I don't feel we are being ripped off as its up to us down here whether we shop locally or offshore. The AUD is very high right now so of course there are tasty treats to be had especially in the used market by shopping offshore. When the dollar comes down to a more realistic and sensible figure, say around 80c things will even up a bit more.

 

The seller in Australia pays his 10% GST on the cost of the item when it arrives in Aus and also 10% of the sale price. He also pays his 30% income tax on profit from that item. So sure with the dollar high it seems things should be cheaper and they probably should be but if and when the dollar levels out a bit things will be fairer. In the meantime buy off shore if the local dealer cant budge in price .There are risks involved buying offshore but with used goods the warranty is gone anyway so a reputable seller doesn't present too high a risk.

 

An interesting case in point here is the much anticipated Berkeley Alpha USB. It has a general worldwide RR of $1699 USD (although it appears that may be creeping up to $1899) while in Australia it seems to have a RR of $2299 AUD. The last edition of the Len Wallis mag (I think they are the importer and distributor) said it would be about the $2K mark which I thought would be fair. By jumping it up an extra $300 it makes the idea of buying it offshore more tempting.

 

But...Berkeley wont let any of their distributors ship to other countries. This is of course to protect their distributors. Fair enough. But what about keeping the prices more regulated in that case. So in this case we either buy locally and pay more or pick one up on holiday overseas sometime or arrange for a friend in another country to buy one and send it.

 

Its much easier with the used market but who wants to wait for a new product to come up on the used market. Not me.

 

 

[barito7]

G'day on the beach,

 

I think your comments say it all. It is our choice yet manufacturers are applying protectionist regimes. There is a retail slump here which some are blaming the internet, however, this is a two way street - charge like a wounded bull and you will find out that no one comes to your china shop.

 

I am happy to pay for service and warranty for some products - so paying a premium for a shop front with helpful staff that will support me with a product is considered value for money.Remembering that most prices only include a manufacturer's warranty and you need to pay extra to extend to a more comprehensive warranty and service.

 

However, protectionist regimes and refusal to align to fx movements do not add value and I refuse to accept them as a consumer.

 

I don't believe that tax and import duty are an issue as other countries pay the same if not more.

 

I agree with you that scale is not an issue as components have standards that are designed to be able to scale i.e. work anywhere based on power etc.In addition, Asia (in Australia's part of the world) is a major manufacturer of components and often does the assembly. Some high end gear may have QA done back at Head Office but for mid-fi and below, I question its value when machines are essentially testing other machines against pre-determined tolerances.

 

Your example of the Berkley DAC is a good case in point.It will be interesting to see what the actual price is but I cannot believe that a difference of over $600 can be justified.

 

[barito7]

http://delimiter.com.au/2011/10/31/treasurer-swan-awaits-it-price-hike-report/

 

[Mark Powell]

You can never tell. I live in the UK, which is in the EU but keeps its own currency and does not use the Euro.

 

Honda sells lots of motorcycles. There is an official UK sole concessionaire (imports cars also) called 'Honda UK' but it is not financially allied to Honda Japan in any way.

 

Honda Japan states frequently in the UK motorcycle magazines to buy only from Honda UK and not from the 'grey' importers because of warranty, service, etc. issues.

 

At the very same time Honda Japan sells motorcycles directly to the 'grey' importers, travelling sometimes on the same ship, while simultaneously telling us to buy only from Honda UK.

 

Of course they just want to keep their factories working at full capacity and don't much care what happens to the product so long as they get paid, but what is the end buyer to think of it all?

 

US made HiFi equipment (and all other US made products) sell here (taxes paid retail price) at about a 'pound for dollar' rate of the US tax paid retail price, which is a bit high considering the usual exchange rates but does not seem to impact actual sales. The numbers look the same, no one much cares whether there is a dollar or a pound sign in front.

 

[RankStranger]

in Melbourne for 8 years up to the start of this year and I can back up all of the reasons given here as true, particularly One and a Half's post.

 

The thing is, I know that there are some huge mark-ups on hifi gear in Australia. I know landed costs for distributors, wholesale costs for shops and the mark up to retail and it adds up to a lot but the fact is that no one is really making that much money anymore (compared to when I started anyway). I can only put it down to the increasing cost of doing business in Australia against the falling costs of product. Margins are falling and companies are struggling to turn a profit and you would be mad to start a company selling hifi in Australia right now (much as I think it would be a lovely thing to do).

 

So I suppose someone might be getting ripped off somewhere but it's not in any direct way so it's kind of hard to rail against. The extra cost must be in transport or real estate prices making warehousing more expensive or wages being higher or something.

 

I hope this makes sense, I'm a little tired.

 

RS

 

 

[onthebeach]

Funny I ended up getting my Berkeley Alpha USB from my local retailer here in Coffs Harbour. He sourced it from the importer and distributer in Sydney. After getting my friendly local discount it ended up being about on par with how much it would have cost picking it up in Indonesia and a few hundred dollars LESS than if I bought it in Thailand.

 

So in my case as it ended up I would have been more ripped off buying it O/S plus I get all the benefits of warranty and purchasing locally.