More price-gouging in NZ

[Edbear]

[QUOTE=Paul in NZ;1130827011]

True - but as you infer, that the freight cost is just a small component of the 'cost' to a corporate. The query has to be responded to, payment arranged, processed, order dispatched, item picked in the warehouse and packed and dispatched. That means someone has to fund an IT system, a financial system and pay wages. If you allowed an hour labour you will add say $40, add some more for the infra structure, say $10 and the 'cost' is suddenly $70. Then you need to courier it to the customer so say $85 plus the actual cost of the thing...

I am in the fortunate position of low overheads, ie: no shop to pay for, no staff wages, (though my wife would like some...), and I am the direct importer and sole agency for two key products in high demand.

I worked out my dealer margin to be as realistically close to the US equivalent as possible to avoid the issue of parallel importing. It's just not worth while for anyone to import themselves from another dealer in the US. Plus my warranty is far superior to the Shorai one.

So I do the exchange rate conversion, add GST and freight, put on the minimum mark up I can survive with and rely on volume and the longer term growth. It means my margin to dealers is very tight and I am exposed to the fluctuations in the exchange rate more than others, but it has been the right strategy so far as four years down the track, sales have picked up rapidly and are now about three times what they were two years ago.

Also, I am only now, four years later, having to seriously look at raising my prices, as the exchange rate is now just under what I worked out the original mark up on, and projected to fall further. It's a hard decision to make, even if I'm only looking at 5%.

[Woodman]

Hit the interwebypipes with a number 7 hammer?

Trade discounts is one of the things that fucks me off. Not the you buy heaps so you can have 20% off sort one; but the cunts that set their base price 5x what they expect to sell at. I've walked in off the street and got 60% off fairly often. Other times, 10% or less. Artificial price fluctuations like a motherfucker.

Got two places I like though as their list prices are both stable and competitive, and their service is excellent:
http://www.bearingandengineering.co.nz
http://www.carbidenz.co.nz/store/index.php

euromarc seem good too for abrasives, but they don't list prices.
Steel, stainless, and ali are all pretty hard to get good rates on small quantities too.

Yes , but the suppliers that do have genuine trade customers who do spend a lot have to offer them a great discount because they then resell the product/part as part of a job and that is how they make a profit. If those same customers ever find out that someone off the street is getting the same discount as they are then the supplier may lose their business. I have seen it happen.

You are right about bearing and engineering. They just down the road and are bloody good.

[bogan]

Yes , but the suppliers that do have genuine trade customers who do spend a lot have to offer them a great discount because they then resell the product/part as part of a job and that is how they make a profit. If those same customers ever find out that someone off the street is getting the same discount as they are then the supplier may lose their business. I have seen it happen.

You are right about bearing and engineering. They just down the road and are bloody good.

I get that, and no problem with 20-40% discounts over walk ins for trades, buying power and all that. It is when the trades gets 80% off, and walk ins get 20-60% off, that I don't get the point. It is the same thing essentially, but with more price variation; for a completely unnecessary reason. We get fucked off with it and just source shit ex china. So if losing business is their worry, a change is in order.

[Woodman]

I get that, and no problem with 20-40% discounts over walk ins for trades, buying power and all that. It is when the trades gets 80% off, and walk ins get 20-60% off, that I don't get the point. It is the same thing essentially, but with more price variation; for a completely unnecessary reason. We get fucked off with it and just source shit ex china. So if losing business is their worry, a change is in order.

Trust me when I say that it is a friggen balancing act. When you get some walk in demanding full trade prices so he can save himself $20 versus risking the loss of 6 figure accounts, what do you think will be the answer?

[bogan]

Trust me when I say that it is a friggen balancing act. When you get some walk in demanding full trade prices so he can save himself $20 versus risking the loss of 6 figure accounts, what do you think will be the answer?

You're missing the point. I'm not suggesting walk ins get trade prices, just that walk ins get stable prices (list) which are not outrageously more expensive than trade (50% at most).

And it isn't just the walk ins that bring in cheap stuff ex china... Though it is worth mentioning that today's walk ins could be tomorow's 6 figure accounts...

[Woodman]

You're missing the point. I'm not suggesting walk ins get trade prices, just that walk ins get stable prices (list) which are not outrageously more expensive than trade (50% at most).

And it isn't just the walk ins that bring in cheap stuff ex china... Though it is worth mentioning that today's walk ins could be tomorow's 6 figure accounts...

Agree with you in every way, but like I say, to manage it is a balancing act on a daily basis.

[bogan]

Agree with you in every way, but like I say, to manage it is a balancing act on a daily basis.

Surely the first step is to lower the list prices far enough to remove any need for walk-in discounts though?

[Woodman]

Surely the first step is to lower the list prices far enough to remove any need for walk-in discounts though?

That is happening , but the guys depending on good trade margins then start asking questions why the RRP is not a lot higher than they are used to. They can and should charge a markup to suit their own needs, not just rely on their supplier to recommend it.

[Ocean1]

You're missing the point. I'm not suggesting walk ins get trade prices, just that walk ins get stable prices (list) which are not outrageously more expensive than trade (50% at most).

And it isn't just the walk ins that bring in cheap stuff ex china... Though it is worth mentioning that today's walk ins could be tomorow's 6 figure accounts...

But the results of most trade discounting practices is that the trades in question end up pricing their labour at cost. At best. They can afford to do that because they're making 500% on the materials.

The problem I have with that is they're not actually selling their trades skills, which is what I want to hire. They're simply taking advantage of a manipulated market, what they're selling is materials. Fuck all that, I want to pay for their ability to supply trade skills, not the size of their materials budget.

What's more; as a retail hardware buyer I don't expect to be subsidising professionals by paying 4-5 times the price they do.

[jasonu]

My mate used to be a grease monkey at Road Race and Rally in Penrose. He used to send me to various vendors for car stuff and I was told to say it's for Brett at RR&R and the trade price was given. Soon after I would go to the same vendors for my personal stuff. It's for Brett at RR&R but I'll pay cash. Never failed to get full trade prices.

[bogan]

But the results of most trade discounting practices is that the trades in question end up pricing their labour at cost. At best. They can afford to do that because they're making 500% on the materials.

The problem I have with that is they're not actually selling their trades skills, which is what I want to hire. They're simply taking advantage of a manipulated market, what they're selling is materials. Fuck all that, I want to pay for their ability to supply trade skills, not the size of their materials budget.

What's more; as a retail hardware buyer I don't expect to be subsidising professionals by paying 4-5 times the price they do.

Which is why we buy stuff elsewhere. Market forces simply don't tolerate such market manipulation now the cost of importing is so low. Especially now that 'elsewhere' has come local too.

[Ocean1]

Which is why we buy stuff elsewhere. Market forces simply don't tolerate such market manipulation now the cost of importing is so low. Especially now that 'elsewhere' has come local too.

Electrician to terminate my new garage? Nobody's interested, they don't get the materials mark-up.

Plumber to install a new boiler? Only if they supply it.

I don't mind paying a premium to a top tradesman for a top job. But I'm fucked if I want someone on the job who's primary interest begins and ends at selling me some cheep piece of shit for 4 times the price he paid.

Outfits like Telecom certainly import off-shore tradesmen to drive local tradesmen costs down, but that's a different story. One that also resulted in some fucking shoddy work.

[Woodman]

Electrician to terminate my new garage? Nobody's interested, they don't get the materials mark-up.

Plumber to install a new boiler? Only if they supply it.

I don't mind paying a premium to a top tradesman for a top job. But I'm fucked if I want someone on the job who's primary interest begins and ends at selling me some cheep piece of shit for 4 times the price he paid.

Outfits like Telecom certainly import off-shore tradesmen to drive local tradesmen costs down, but that's a different story. One that also resulted in some fucking shoddy work.

Whats the difference between paying a markup on a product than getting charged $100per/hr when the guy doing the job only gets $30per/hr?

[yevjenko]

[QUOTE=Big Dog;1130826591]

All were with the expressed: this will either fix it or fuck it completely guarantee.

That'd make a good t shirt

[yevjenko]

I've just experienced the ultimate in price gouging.

Both key remotes for my BF Falcon died in rapid succession. I called in at Dunedin City Motors to enquire about a replacement. They were available ex stock - price $193.00. The thing is, that was the price range I was (naively) expecting, so I bought one on the spot.

A couple of days later while aimlessly surfing the 'net, I thought I'd (rather belatedly) search for other prices. This is what I found for the identical article - right here in NZ:

http://www.trademe.co.nz/motors/car-...-840291572.htm

Lesson learnt the hard way.

Doh!

You know you can buy those at Mr minit stands in the mall these days...