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

[steve_t]

I wonder what would happen if loacal retailers had the balls to tell brands that have their products available at significantly lower prices elsewhere they'd no longer stock/promote their gear.

If you remove the ability for people to try for size then import or even just the reduced advertising for these brands they may consider giving the dealers a fairer market to compete in.

I would not support any brand that is willing to bypass their large account holders to sell to the public at the same or less than they'd sell to their dealers.

Basically they're using the dealers as free advertising and try for size for their products.

I don't think there's many brand-name manufacturers selling direct-to-public, though I'm happy to be proven wrong. The issue of wholesalers selling direct-to-public is an issue for retailers though

[onearmedbandit]

I wonder what would happen if loacal retailers had the balls to tell brands that have their products available at significantly lower prices elsewhere they'd no longer stock/promote their gear.

If you remove the ability for people to try for size then import or even just the reduced advertising for these brands they may consider giving the dealers a fairer market to compete in.

I won't name the business, or the supplier, but one of our competitors got a special price on a certain plasma TV. Our buyer complained to the supplier, so they gave us the special price as well. Now of course our competitor was confident only they could sell at that price, so when customers started telling them we were price matching them, the competitor informed the supplier to either drop their price further or remove all their stock from their chain of stores. The supplier then dropped the price below cost just to keep their presence on the showroom floor (granted the special price only lasted one weekend).

Unfortunately I don't see the same thing happening at Blue Wing.

[Voltaire]

Hasn't it always been the plan of vehicle dealships to sell the vehicles at low margins and really coin it on spares?
I saw a tank on Ebay for a 900ssie and they said they retail for 2K US.......I got one on TM for $245.00( although it was second hand).
I was working for a supplier of computer room a/c and their margins were 30% on units and at least 60% on parts....saying that they could sit around for a year of two, so you have to factor in storage, interest, stocktaking....
I did cringe when quoting prices on parts.." its not like your paying for it yourself...."

[Robert Taylor]

Retailers bleating about overseas competition and GST avoidance, mate who are the tax payers in this country?

The GST avoidance issue is very positively being tightened up by the Government, and not before time. As is fraudulent invoicing, customs are now very attentive to this. If mainstream distributors have to pay clearance charges and gst on everything then why should they be effectively penalised by many private imports effectively avoiding all that?
Were it able to be worked out it would be interesting to see how many jobs ( for ordinary everyday kiwis ) have been lost through this factor alone............

[Robert Taylor]

I don't think there's many brand-name manufacturers selling direct-to-public, though I'm happy to be proven wrong. The issue of wholesalers selling direct-to-public is an issue for retailers though

The reality is fast becoming apparent that due to competition from the way the world has changed two margins ( wholesallae margin and retail margin ) are very much under threat

[Brian d marge]

I can say that the cost of Genuine Honda spares , here in Japan are very reasonable , ( sorry I just out the door in a few min so this is a quickie )

But For my Cr 250 the cost of crash damage and normal wear and tear is very reasonable

Example I throw a new chain and sprockets on every meeting , the chain 5k yen and sprockets 2k each Yen ( a lot of the time I may use an older sprocket and just bin the chain )

I went out the other night , and a typical cost for a nite on the piss is 3 to 4 k ( all you can eat and drink for one price )

The only time I get unstuck is for my older crs , eg the 85 , the rear shoes are no longer available , as are rear panels ,,,

Even if I was to buy a part now , over night , then 3 to 5 days to NZ is the quickest I can get parts to NZ

and there would be NO profit , in actual fact I lose a lot of time , sending individual parts ,,,

I would have to send a lot of headlights to pay a wage

Shit now I m late ,,,damn ..
Stephen

[Mungatoke Mad]

I just imported some stuff from the states for my bike and a friends. While I made some decent savings on my stuff, it was the part I got for my friend that blew me away. Honda want to charge over $600 for the seat cover for a 2009 CBR1000RR. That's $600+ for a piece of plastic smaller than the cover of a magazine. Yes it comes painted and with decals. However I bought the same part for him from America for US$164 (NZ$210), add on shipping, customs and GST it still came out at being under half price.

Seriously. It's a fucking joke. I know it's not the dealers who set the price (thanks Blue Wing) but $600 for a fucking piece of plastic? After this experience (took less than 2wks to get here right on xmas time) I know I'll be looking overseas first. Sure I'll still look at NZ suppliers, but I won't be wasting any time if I find a similar situation to what I've just experienced.

So yes Robert Taylor and other staunch supporters of buying locally, I'd love to keep my money in NZ, keeping NZ'ers in jobs, keeping the NZ economy ticking along, but if it stays like this the only NZ companies I'll be supporting will be couriers.

I sheared the rear hub off my 97 XR 400 bout 9yrs ago & Honda wanted 2 charge me 840$ 4 a new 1 a 40$ pice of cast alloy & a 800$ wrapper a complete wheel they wanted over 2grand i ended up getting a 2nd hand "19"cr wheel 4 500$ & getting it engineered 2 go on the back .I've just been been thru the same sort of shit over X mas after my current KTMs last encounter with planet earth sourcing parts on the interweb Instead of shopping locally

[Houseman]

at the end of the day (love that saying), price point (for same product/brand) would be the biggest factor in peoples decisions on where to buy. Otherwise Pak n Save would have no customers.
For every 10 seat cowls sold by Honda dealers her in NZ at $600, there's probably another 30 purchased overseas at $210. If the price was a little lower, say only $300, they may very well double their sales.
(disclaimer, figures made up for example purposes only, but you get the gist)

Unfortunatley its not that simple, and most do not realise the effect of lowering your price has on mainitaing total gross margins. Pretty simple to explain on the back of a piece of paper using your example...

Say the landed cost in NZ for the part is indeed $210 and the shop sells 10 at $600, that means they make a total of $3900 from the deal ($390 per part).

If they were instead try and attract more business by lowering the price to a far more competitive $300 as you say, they now only make $90 per sale would need to sell an extra 34 parts JUST TO BE EXACTLY WHERE THEY ARE NOW (selling only 10). Even if they captured all of the 30 "missed" sales online from being at $600, they are still better off letting them go.

No matter what the business, it is a fact that if you have a standard margin of 30%, and you drop your price by 10%, you have to sell over 2x the volume to be any better off than where you were. Hence lowering prices to compete has a huge impact on bottom line and bikes shops close. Sad but true, the market always wins.

[MarkH]

Unfortunatley its not that simple, and most do not realise the effect of lowering your price has on mainitaing total gross margins. Pretty simple to explain on the back of a piece of paper using your example...

Say the landed cost in NZ for the part is indeed $210 and the shop sells 10 at $600, that means they make a total of $3900 from the deal ($390 per part).

If they were instead try and attract more business by lowering the price to a far more competitive $300 as you say, they now only make $90 per sale would need to sell an extra 34 parts JUST TO BE EXACTLY WHERE THEY ARE NOW (selling only 10). Even if they captured all of the 30 "missed" sales online from being at $600, they are still better off letting them go.

No matter what the business, it is a fact that if you have a standard margin of 30%, and you drop your price by 10%, you have to sell over 2x the volume to be any better off than where you were. Hence lowering prices to compete has a huge impact on bottom line and bikes shops close. Sad but true, the market always wins.

I agree with you 100% and I agree with the supplier and retailer having the right to set the margins to their best advantage. Of course I think that any supplier setting their margins to a level where they make less sales, but more profit, which is their right - they need to be willing to accept me being one of those who they miss out a sale to.

They make their decision and I'll make my decision. My decision may not necessarily be to buy the item from overseas, it could be to buy it 2nd hand through Trade Me or it might be to flag the purchase completely.
In fact I have visited a bike shop, got a price on a part and decided that I just didn't HAVE to have that part. So, yeah - there is some broken plastic on my scooter, better that then to be over $600 poorer. Everything works well enough despite the broken plastic so I'll live with it for now.

The GST avoidance issue is very positively being tightened up by the Government, and not before time. As is fraudulent invoicing, customs are now very attentive to this. If mainstream distributors have to pay clearance charges and gst on everything then why should they be effectively penalised by many private imports effectively avoiding all that?
Were it able to be worked out it would be interesting to see how many jobs ( for ordinary everyday kiwis ) have been lost through this factor alone............

What about when the customer decides to simply not make the purchase at all because it costs more than they are willing to spend? How many jobs would have been lost through this factor alone?

What about when I buy from one store instead of another and the one I don't buy from goes under because too many others have done the same thing?

I just can't spend my life feeling guilty for every decision to not give money to a business, no matter the reason.

I am aware that some overseas sellers don't put the full value of goods on the custom declaration and obviously that isn't right - though in my case I usually don't pay GST because the goods just aren't worth enough to make the GST sufficient to warrant the cost of customs collecting the GST from me. But it would be a rare purchase where the cost of GST would make it not worth importing the item. Mostly it would just be a few more dollars for the NZ Govt. to use for whatever. The majority of my packages from overseas have a total cost of under NZ$300 so we are only talking about $40 or so worth of GST and it would cost most of that to get me to pay it.

[ynot slow]

The gst issue is similar to the old sales tax from years ago,when you'd bring back stereos etc due to exhorbitant sales and excise tax on them,except in that case the govt scrapped the tax(along with import duty on clothes which meant thousands were unemployed,but cheap clothes were available)on most goods,this scenario is the opposite way.

Hell in 1983 I went to Sydney(airfares $1200 return for 2)high season at xmas though,we bought a microwave for $119,and car stereo for $229,the receipts were kept and with microwave I kept the newspaper add as proof as it was almost 35%off.The stereo guy offered to mark receipt as $129 stereo,$50 speakers to lower tax on entry home,it worked out we had to pay $25 on microwave(thanks to paper advert)as customs lady couldn't believe cost and without it she was going to hit us for tax on $180aus(converted to kiwi),think tax on kitchen items was 45%,but stereo was 125%IIRC,we ended up paying $125 on stereo approx.Both items had value here of $600 each,man microwaves have improved since the old Sharp ones lol.

As an aside checking cost for sprockets and chains the cost is cheaper here than online from what I've seen,i.e Cycletreads on trade me $220 starting cost for me,several offshore places $2-300GBP,$2-300US,sure chains are better quality maybe,but was late when looking.

[ynot slow]

What about when I buy from one store instead of another and the one I don't buy from goes under because too many others have done the same thing?

I just can't spend my life feeling guilty for every decision to not give money to a business, no matter the reason.

True competition comes in form of shops in your town or area,take Taranaki as an example,Hawera has 3 electrical outlets,Stratford 2,Inglewood 1,New Plymouth heaps,and only 50mins drive from Hawera is Wanganui or New Plymouth.This also not counting Warehouse and Mitre10 which sell similar items,and other shops which I may have ommitted which may sell limited electrical stock.

I knew an owner of a small local shoe shop,he asked every rep if they sold to the Warehouse(was opposite him at the time),if they did he said I haven't the buying power,and his customer base was not up market but not entry level,the hard part is finding your customer base,fine line between stocking lower quality and top quality,and making money.

[rwh]

take Taranaki as an example,Hawera has 3 electrical outlets,Stratford 2,Inglewood 1,New Plymouth heaps,and only 50mins drive from Hawera is Wanganui or New Plymouth.

Damn - I guess there are lots of extension cords and multiboxes in Taranaki.

Here in the big smoke, I have 4 outlets in one room, and some of them are doubles!



Richard

[Robert Taylor]

I agree with you 100% and I agree with the supplier and retailer having the right to set the margins to their best advantage. Of course I think that any supplier setting their margins to a level where they make less sales, but more profit, which is their right - they need to be willing to accept me being one of those who they miss out a sale to.

They make their decision and I'll make my decision. My decision may not necessarily be to buy the item from overseas, it could be to buy it 2nd hand through Trade Me or it might be to flag the purchase completely.
In fact I have visited a bike shop, got a price on a part and decided that I just didn't HAVE to have that part. So, yeah - there is some broken plastic on my scooter, better that then to be over $600 poorer. Everything works well enough despite the broken plastic so I'll live with it for now.



What about when the customer decides to simply not make the purchase at all because it costs more than they are willing to spend? How many jobs would have been lost through this factor alone?

What about when I buy from one store instead of another and the one I don't buy from goes under because too many others have done the same thing?

I just can't spend my life feeling guilty for every decision to not give money to a business, no matter the reason.

I am aware that some overseas sellers don't put the full value of goods on the custom declaration and obviously that isn't right - though in my case I usually don't pay GST because the goods just aren't worth enough to make the GST sufficient to warrant the cost of customs collecting the GST from me. But it would be a rare purchase where the cost of GST would make it not worth importing the item. Mostly it would just be a few more dollars for the NZ Govt. to use for whatever. The majority of my packages from overseas have a total cost of under NZ$300 so we are only talking about $40 or so worth of GST and it would cost most of that to get me to pay it.

If you read all of my posts you will see that I concede there are issues with big price discrepancies, its just that being in wholesale and also being a consumer I can see both sides of the problem, and it is indeed a very big problem. The days of protectionism are gone but somehow the problem needs to be fixed. The solution is not simple and involves a lot of pain.

[Ocean1]

If mainstream distributors have to pay clearance charges and gst on everything then why should they be effectively penalised by many private imports effectively avoiding all that?

That's a Katman mistake.

They're not being penalised by the private importers.

They're being penalised by the Governments import duty and GST rorts.

[steve_t]

That's a Katman mistake.

They're not being penalised by the private importers.

They're being penalised by the Governments import duty and GST rorts.

Read the quote you took from RT again. He didn't say private importers were directly penalising retailers. They are "effectively penalised" by the government's lack of consistency in charging duty on private imports.