Ranting about NZ retailers

**Jantar** · 3rd December 2012, 20:42

Originally Posted by Ocean1

The distributors set those prices, it's called a vendor driven market.

And you're right, they don't represent the buyers best interests.

When distributors set prices they are breaking the commerce act. I recall F&P being prosecuted for this a few years ago when they refused to supply dealers who were offering products at less than F&P's set price. F&P lost the court case and they ended up with a huge fine.

Price fixing is highly illegal and if it can be proved that any importer is doing so then they could be for the high jump. I suspect Blue Wing Honda maybe doing so, but how does anyone prove it?

**Ocean1** · 3rd December 2012, 21:08

Originally Posted by Jantar

When distributors set prices they are breaking the commerce act. I recall F&P being prosecuted for this a few years ago when they refused to supply dealers who were offering products at less than F&P's set price. F&P lost the court case and they ended up with a huge fine.

Price fixing is highly illegal and if it can be proved that any importer is doing so then they could be for the high jump. I suspect Blue Wing Honda maybe doing so, but how does anyone prove it?

It's common. With or without the legal work-arounds it's the defacto business model for most large corperations in NZ. I'd quote detailed examples, but I don't need the hassle.

In my experience apart from a few notable exceptions like that F&P case the commerce commission fails to manage the anti-competitive part of their brief almost totally. Just look at the number of effective and actual monopolies present in NZ, and compare prices to the same entities sales in Aus.

**Kickaha** · 3rd December 2012, 21:51

Originally Posted by Jantar

When distributors set prices they are breaking the commerce act.

It isn't quite that simple but I'd have to go dig my books out because I can't remember the whole story

**SS90** · 3rd December 2012, 23:47

Originally Posted by Bassmatt

Slightly off topic but while I'm sitting here on my very high horse I'll have another moan.
The majority of times I have taken a car, trailer, pushbike or even a lawnmower into a mechanic/service center , the person I have dealt with has offered to try to find second hand parts in order to keep the cost of the repairs down. I have never had this when I have dealt with motorcycle workshops. When I was quoted $600 for a radiator fan, once I had stopped laughing, I asked about the possibility of a second hand one. This was met with a blank stare and an eventual "I suppose you (meaning me) could have a look on trademe". No real suggestions, no mention of motorcycle wreckers, no offer like " I'll see if I can find something and get back to you ".
The stupid pricks could have got the same second hand fan I did for $75 and charged me $300 and I would have been very happy at saving $300 and gone around telling people how fantastic (pun intended) they were.
End of rant. I feel better.

IF (and I mean IF) said shop had done this for you (provided a second hand fan), and, it has failed, woulkd you then ask for your money back?

**Bassmatt** · 4th December 2012, 04:53

Originally Posted by SS90

IF (and I mean IF) said shop had done this for you (provided a second hand fan), and, it has failed, woulkd you then ask for your money back?

That would depend on what they charged and how long it lasted.
$300 and failed in the first week? Probably.
$100 and failed on the day it went in? Probably not.
But I say that now, knowing the cost of a second hand fan. Had I not been made to find it myself and had no idea of its true value then at $300, thinking I had saved a true $300 I would probably not have asked for a refund at all unless it failed as I was driving away from the shop.
And that is their biggest mistake. Now I'm going to be looking at the second hand (or international) price of everything before handing over the cash for a new part at NZ prices.

**Woodman** · 4th December 2012, 06:07

Originally Posted by Bassmatt

That would depend on what they charged and how long it lasted.
$300 and failed in the first week? Probably.
$100 and failed on the day it went in? Probably not.
But I say that now, knowing the cost of a second hand fan. Had I not been made to find it myself and had no idea of its true value then at $300, thinking I had saved a true $300 I would probably not have asked for a refund at all unless it failed as I was driving away from the shop.
And that is their biggest mistake. Now I'm going to be looking at the second hand (or international) price of everything before handing over the cash for a new part at NZ prices.

Fitting a second hand part could easily come back and bite the workshop on the ass in a big way, all because they are trying to be the nice guys and saving their customer money. Not worth the hassle.

**SS90** · 4th December 2012, 07:14

Originally Posted by Woodman

Fitting a second hand part could easily come back and bite the workshop on the ass in a big way, all because they are trying to be the nice guys and saving their customer money. Not worth the hassle.

Amen to that!

**HenryDorsetCase** · 4th December 2012, 09:12

Originally Posted by Ocean1

It's common. With or without the legal work-arounds it's the defacto business model for most large corperations in NZ. I'd quote detailed examples, but I don't need the hassle.

In my experience apart from a few notable exceptions like that F&P case the commerce commission fails to manage the anti-competitive part of their brief almost totally. Just look at the number of effective and actual monopolies present in NZ, and compare prices to the same entities sales in Aus.

Two words for you Kim: The building trade.

egregious ripoffs galore.

**HenryDorsetCase** · 4th December 2012, 09:16

Originally Posted by Kickaha

It isn't quite that simple but I'd have to go dig my books out because I can't remember the whole story

From memory, the distributors can set "non binding" "recommended retail" prices. The other thing that bit F & P if I recall was the fact that their distribution agreement provided that "If you sell F & P you cannot sell competing brands".

So you get a Bond and Bond store right next door to a Noel Leeming store: one sells F & P the other does not. Same store though.

**HenryDorsetCase** · 4th December 2012, 09:21

Originally Posted by 98tls

Nothing much has changed then,ive spent some years selling both cars and bikes and remember back around 19 years ago selling Toyotas (for 7 years) which were then and still are i guess a pretty popular car,dealerships then wouldnt have survived without there service depts/parts depts.They struggled back then so its not a new thing,surely somebody should have come up with a new game plan eh,if they havent which it doesnt sound like then...

It would be a good time to be a toyota dealer in chur chur I reckon. It seems that EVERY tradie I see has a brand new SR5 with all the fruit. Plumber, drainlayer, electrician, plasterer, painter whatever.

artificial economy I know, but presumably Bruce Miles is giggling all the way to the bank.

**BMWST?** · 4th December 2012, 09:50

Originally Posted by HenryDorsetCase

Two words for you Kim: The building trade.

egregious ripoffs galore.

thats a perception only.I work in a prenail plant and i can tell you our margins are tiny.And i know others are too.Sometimes people come in saying so and so have given me this price.When we look at it we cant even buy the timber we need to make the job for that figure.In a normal job we are often within a couple of hundred dollars of each other.
Any business can set whatever price they want for an item.The commerce commison will become very interested if it knows for example that supposed competitors have agreed to sell similar products for a similar price.How do you know that though?.In the market competitors know what the market price for 100x50 and gib board are.Their customers tell them.

**Katman** · 4th December 2012, 10:05

Originally Posted by HenryDorsetCase

From memory, the distributors can set "non binding" "recommended retail" prices.

And they set their wholesale prices according to their recommended retail prices.

For a retail business, already just surviving on modest margins, dropping their own retail price doesn't make very good business sense.

**Bassmatt** · 4th December 2012, 12:49

Originally Posted by Woodman

Fitting a second hand part could easily come back and bite the workshop on the ass in a big way, all because they are trying to be the nice guys and saving their customer money. Not worth the hassle.

How would it be any different from me taking a second hand part in and asking them to fit it? Is that gonna bite them on the ass too?
It was a fan, its not like I'm asking for second hand brake bloody brake pads or 10 yr old tyres. As in all the other cases I mentioned I would of had to give my approval for the second hand part to be fitted so my problem/responsibility not thiers.
If they had surreptitiously put a second hand part on without mentioning it then different story.
Selling a second hand bike which by definition is made of second hand parts is all good but its too dangerous for them to attempt to find a second hand part..okay, got it.

They have also happily sold me a road bike when I didn't have a motorbike license in the full knowledge I intended to ride it on the road, do you expect the police would be charging them if I had come off it ?.
Ive bought 2 brand new bikes , chains, tyres, oil filters etc easily spent 40-50k with them in the last three years. If that aint worth the hassle then I look forward to seeing them go out of business.

**Ocean1** · 4th December 2012, 15:04

Originally Posted by BMWST?

The commerce commison will become very interested if it knows for example that supposed competitors have agreed to sell similar products for a similar price.How do you know that though?.In the market competitors know what the market price for 100x50 and gib board are.Their customers tell them.

The commerce commission couldn't give a shit. If they did they'd be looking into why a sheet of Gib made in NZ costs $22 in NZ and $12 in Aussie. You don't need to go far to find simmilar indicators in most markets.

Originally Posted by Katman

And they set their wholesale prices according to their recommended retail prices.

For a retail business, already just surviving on modest margins, dropping their own retail price doesn't make very good business sense.

As it stands it lookes like most bike retailers are subsidising artificially tight new bike sales margines by inflating service and spares margines.

To me that means the distributor's taking an unfair slice of the overall industry spend. I'd prefer the distributors stuck to fixing the wholesale price and kept their sticky fingers out of the broader industry retail till, but unless the shop's completely free to price as they want the end user doesn't get much say.

Market manipulation is rife, everywhere, and I hate it, it removes much of the control of the market that rightfully belongs to the customer.