Buy from NZ? I tried but come on...

[ynot slow]

I'll chuck another retail scenario out there,years ago travel agents were paid commission from airlines,was 10%,then Air NZ decided to cut to 5% domestic fares,then same with international and others followed.Roll on and next to nothing from them,internet trading at it's best.

Years ago in the USA at a world conference indusrty people stated to make money the internet,meant agents were to come advisers and charge as such for their product knowledge,the client could either book their own trip or use agent.After a few horror internet trips people are going back to agents.

[onearmedbandit]

This thread has taken an interesting swing. I started it as a gripe to the importers/wholesalers, not the retailers. I think most of us accept that motorcycle dealers are not making millions, but on a $620 seat cowl someone is making too much out of the NZ market, even taking into account the small numbers of sales compared to other markets.

On a part like the seat cowl, I'd expect the dealer to have maybe 20-30% in it, if that was the case then it would be cost the retailer around $480. I bought one for $210. Maybe I'm off on my margin, maybe the dealer needs 100% margin. So they are charged $310. I bought it from a retail store in America (where it was also imported into) for $210.

So what gives? Are the dealers here charging a lot more margin to cover operating costs that (as WT pointed out) we don't know about so they can keep the doors open, or are the importers creaming, sorry gouging the market here?

[Woodman]

So what gives? Are the dealers here charging a lot more margin to cover operating costs that (as WT pointed out) we don't know about so they can keep the doors open, or are the importers creaming, sorry gouging the market here?

I think what you will find is that the nz distributors/bikeshops just aren't big enough customers with the overseas suppliers to warrant a good buy price. Do you think that a small bike shop in nz gets the same price as a big one or a chain somewhere overseas?
Maybe the bike shops need to get together here(maybe they are already) and start up some sort of buying group using one account or something and leverage off it, maybe even bypass the importers/distributors. If the suppliers don't play ball then they could lose all of NZs business.

[Smifffy]

Mully.

Ten fucken percent? Are you joking man?

Example. I have 5 staff in my spares department to deal with phone calls, walk ins, and general timewasters, that's FIVE. At minimum wage, I have to sell three thousand, two hundred dollars worth of shit at EVERY opening hour at your ten percant margin just to cover them being there. Don't get me started on power, floor space rental for the dept. and many more charges Joe Blogs has no idea of.

10% is the price that Mully, and indeed myself would consider it not worth being the hassle to arrange our own shipping etc. If I understand correctly, he is talking 10% over the landed price (so including shipping cost etc).

I think he is also talking about this as a model for the things that are just outrageously expensive here, not the everyday stuff that your parts guys already do. We are talking about the occasional person that takes a lot of pride in their ride, and might be looking for an exhaust, or maybe some fancy luggage, rearsets etc.

You could either clip their ticket for %10, maybe the market would even stand 15-20%, wait for the crap to arrive, call em, tell 'em it's here, and maybe give 'em a quote to fit it.

Or you could call 'em a fuckwit who doesn't understand the cost of being in business and sit back while they order all of their shit online, and wonder why they now refuse to do any business at all with someone who calls them a fuckwit.

In my travels throughout the USA not a single employee of any business would call anyone a fuckwit, or even pretend they might be one. Without exception they went out of their way to make the customer feel valued. It's attitudes like the one displayed here that go a long way to driving consumers elsewhere.

[Ocean1]

I think what you will find is that the nz distributors/bikeshops just aren't big enough customers with the overseas suppliers to warrant a good buy price.

But individual internet purchasers are? It doesn't add up, dude.

What is true is that anyone with a permanent address is paying a fair wack in overheads. The principal importer is in the best position to manage costs, (wholesale operations generally have lower overheads) but they're also better protected by their traditional market access monopoly... Until recently.

[steve_t]

There is as always a strong belief in this country that any sort of margin added by retailers is a rip-off, and is perceived as pure profit. The "I'm generous - I'll tolerate 10% maximum" approach is quite common.

The reality is that even with 100% or more added, the retailers struggle to cover wages and overheads. Some give up the unequal struggle.

If you think it can be done at 10%, go ahead and try it - put your money where your mouth is.

The reality is that retailers CAN'T compete with overseas internet sales - to expect them to do so is short-sighted. As mentioned earlier, bike shops aren't closing in increasing numbers because they're sick of making too much money...

10% is the price that Mully, and indeed myself would consider it not worth being the hassle to arrange our own shipping etc. If I understand correctly, he is talking 10% over the landed price (so including shipping cost etc).

LOL

[Ocean1]

or maybe some fancy luggage, rearsets etc.

Good example. I happen to know what it costs to manufacture hard luggage type assemblies and I've recently purchased a whole slew of Givi hardware.

Man did I feel shafted. What's more the distributor didn't deliver.

[ukusa]

The reality is that retailers CAN'T compete with overseas internet sales - to expect them to do so is short-sighted. As mentioned earlier, bike shops aren't closing in increasing numbers because they're sick of making too much money...

I don't no what the actual markups in retail are, but the differences in retail cost here & overseas are too huge to be ignored. It's all well & good to say "support local business" etc etc. but in this country we get screwed on a shitload of things because we're a small country of 4.4 million. Wages are shit, costs are high, it's in our nature to look for a bargain.

If survival in the business means price, then the importers must be accountable, or they'll end up killing their own business. Then we'll end up buying all our shit overseas.

[ukusa]

I think what you will find is that the nz distributors/bikeshops just aren't big enough customers with the overseas suppliers to warrant a good buy price. Do you think that a small bike shop in nz gets the same price as a big one or a chain somewhere overseas?
Maybe the bike shops need to get together here(maybe they are already) and start up some sort of buying group using one account or something and leverage off it, maybe even bypass the importers/distributors. If the suppliers don't play ball then they could lose all of NZs business.

nicely put!

[Smifffy]

Ok so maybe fixed percentages aren't such a great idea, let's use OABs numbers to see how this could work.


His seat cowl cost him $210 to land. I'm picking that if he had gone to local shop, and they said "No problem we can get you one in for $295 (more than 10%) we need 50% deposit and the rest on pick up. There's a warranty if it's defective, but if you decide you don't want it for any other reason there will be a charge to return it.

I'd say odds are pretty good he would hand over his credit card, you could order the gizmo online, he would get his part, you'd take a cut and everyone would be happy.

I'd wager that there would have been precious few stores in NZ that would have had that item on hand anyway.

Of course there will still be those that would want to save themselves $85, and good luck to them.

[Smifffy]

LOL

Wages & overheads are wholly applicable when stock is held. When it is ordered in from the wholesaler on request, the only value that is being added is the retailers connection with the wholesaler.

If the consumer can source the item from somewhere cheaper than either the wholesaler or retailer can provide it then that particular supply chain is not adding any value at all, and in fact it becomes a liability.

The public holiday surcharges being charged at restaurants etc this week, is another example of greedy NZ businesses trying to gouge the consumer IMO.

[steve_t]

Ok so maybe fixed percentages aren't such a great idea

And in reality, it's not a fixed percentage mark up. Actual dollar margins are applied often, especially for high value goods.

Wages & overheads are wholly applicable when stock is held. When it is ordered in from the wholesaler on request, the only value that is being added is the retailers connection with the wholesaler.

If the consumer can source the item from somewhere cheaper than either the wholesaler or retailer can provide it then that particular supply chain is not adding any value at all, and in fact it becomes a liability.

The public holiday surcharges being charged at restaurants etc this week, is another example of greedy NZ businesses trying to gouge the consumer IMO.

I agree with the holiday surcharge being ridiculous especially those that are charging it for 4 days over Christmas and 4 days over new years! However, it's interesting that you make an allowance for wages to be considered wrt stock on hand at bike shops, but the time and a half plus day in lieu for employees working at cafes and restaurants don't get the same

[Woodman]

But individual internet purchasers are? It doesn't add up, dude.

What is true is that anyone with a permanent address is paying a fair wack in overheads. The principal importer is in the best position to manage costs, (wholesale operations generally have lower overheads) but they're also better protected by their traditional market access monopoly... Until recently.

I wasn't talking about the places where we buy goods online, I was talking one supply channel or more back from them, possibly even the manufacturer.

Retail margins are very rarely a cost plus exercize nowadays, its generally based on demand, competition, availability, volume etc. Of course cost comes into it, but depending on time and circumstances you have to sell stuff with very skinny margins just to compete.

[Virago]

I don't no what the actual markups in retail are, but the differences in retail cost here & overseas are too huge to be ignored. It's all well & good to say "support local business" etc etc. but in this country we get screwed on a shitload of things because we're a small country of 4.4 million. Wages are shit, costs are high, it's in our nature to look for a bargain.

If survival in the business means price, then the importers must be accountable, or they'll end up killing their own business. Then we'll end up buying all our shit overseas.

We're a small country with a small population, tucked away in a dusty forgotten corner of the world. The cost of putting a range of good on our shop shelves is always going to be higher than elsewhere. On top of that, we have to pay 15% GST on our retail purchases.

Let me put it this way. Rural petrol stations have always had to charge more for fuel - their supply costs are higher, their turnover is lower. The rural locals learnt that, where possible, they should fill their cars more often when they went to "town" - as you said, it's in our nature to look for a bargain and to save money where possible. When the local station eventually closed, the locals suddenly realised that they no longer have choice, and they now MUST go to town for petrol - they often waste petrol making the trip to do so...

So who was at fault - the local station for "failing to compete", or the canny rural locals who effectively cut their own supply?

The NZ retail market is no different. Sure, you can get a better deal shopping on the 'net, but once the bike shops have closed, there will be nowhere to try that helmet on for size before buying on the 'net - as many happily admit to doing.

[Smifffy]

And in reality, it's not a fixed percentage mark up. Actual dollar margins are applied often, especially for high value goods.



I agree with the holiday surcharge being ridiculous especially those that are charging it for 4 days over Christmas and 4 days over new years! However, it's interesting that you make an allowance for wages to be considered wrt stock on hand at bike shops, but the time and a half plus day in lieu for employees working at cafes and restaurants don't get the same

I worked New Years day & the day after, and will get a time and a half plus a lieu day for eac day, as will everybody else who was there with me. I can guarantee that our customers will pay no more for the product we manufactured on those days than the product we manufacture on any other day of the year.

Management made a commercial decision not to shut down on those days, they can't expect their customers to pay for that decision.