$A=$US - Are we getting ripped off?

[blueoval]

Originally Posted by Hulsty

I'll check spec savers out, brands dont faze me, but I have a wide head haahah and nothing else fitted to well or suited.

Im the same. Wide head and limited options. But I found some frames that suited me well. Worth looking at a minimum.

[MAD]

Originally Posted by trippytaka

Erg... this again.

Owning a small t-shirt business on the side has taught me a few things about scales of economy. Basically, as a wholesaler, or distributor - when you order a thousand of the one product, you can buy it at a certain rate. When you order a million of the same product you get it a hell of a lot cheaper. Thus you can pass on savings and you keep your prices down in order shift more stock, and the cycle continues.

The problem here VS America is simple. There are 21m people in Australia. There are over 310m in America. All sales markets are much bigger, so manufacturers of items are able to reduce their costs because they will be selling so many. Wholesalers then buy more, because they have a bigger maket to sell to, so they enjoy the reduced costs too.

Is that example of 1000 vs 1mil realistic?
Saying there is a bigger market in the US is a bit ambiguous.
In our population of 21m people, let's say there's 100 companies like yours. In the 310m people in the US, stastically speaking, there is a high likelihood of there being around 14,500 companies like yours. (310/21 * 1000).
So there is a bigger population to sell to, but there's also more competition.

[EL97]

Originally Posted by blueoval

I just go to Spec Savers and they do frames and lenses for $200 total with a second pair free. Sure the frames arent big branded named but they look good and do the job well.
My sister in law used to be a Optical Dispenser and said the mark up on frames was sometimes 400%. Since Spec Savers came in I noticed all other companies having to drop prices dramatically to compete. Profits are still there to be made, just not the insane mark ups.

I agree with you on Spec Savers, I've brought glasses from them for $60, including lenses, which is great as I'm a poor uni student, can't really afford the brand names. Sure you could make an argument on their quality, however I've landed on them, bent them multiple times and they're still in one piece. Long lasting $60 that I've spent

[gtfpv]

Well there is supposed to be money in Sydney inner suburbs . I asked a Lebanese business friend I know where does the rich lifestyle come from . Answer , inheritance or buying and selling. And that is what has disgraced us as a. Nation. It's no different to investing . I'm not talking about inheritance it's the others that create free money for very few .

[MAD]

The new range of businesses making money for doing very little, are these 'free' comparison websites. Something that no-one needs, but is somehow marketed as invaluable and very necessary, and best of all it's a free service! right.....

[XP6]

Originally Posted by Yellow_Festiva

You really think postage is the same in any country????

I assure you we pay very dearly for postage compared to many other countries. Often we pay 3-4 times what many countries pay. This is internally as well as the globe.

Yes thats because we are out in the middle of nowhere and once it lands here it can be thousands of km to your door...

[vanman_75]

Originally Posted by trippytaka

I hear what you are saying about the buy Aussie only, but there is a more realistic way. Here's a really left wing crazy idea. How about we try to boost our locl manufacturers with the biggest thing in our economy at the moment - resources!

Basic protectionism is alive and well all over the world, so why don't we do it? Let's make it mandatory for mining companies to use 75% Australian products - arbitrary number, but you get the idea.

Spot on ! Stupid things like Queensland rail getting trains made in China , we are fools to ourselves .support ( subsidies to manufacturing ) like ford holden ; Toyota .make some effort to make it worth them being here and feeding our society with employment ....local suppliers , make it harder for all the cheap priced goods getting here , more support for farmers etc etc ....if we can't do these things , kiss our economy goodbye when the quiet times come back .
A lot of it is poor governing rather than people wanting to buy overseas .it amazes me that we are in such bad shape ( politically / financially) , and I'm not sure that will be fixed anything soon .
I'm living the Aussie dream , doing my best to support us .but I am only 1 , basic math tells me buying anything from anyone else is gunna see a lot more business go down the drain .

Rant over :/

[Rodp]

Originally Posted by trippytaka

Interestingly, there was a brilliant piece the other day on the burn out of China. Basically, the USA manufacturers are starting to fire up again because China's wage growth is starting to level out the manufacturing costs and the USA is starting to draw level with the Chinese again on locally produced goods. Very interesting.

I was hoping the same would happen with the outsourcing of IT to India. It's happening to a point, however, instead of bringing the work back (some of it has come back), management is just scouring the planet for the next cheap source of labour.

Having to deal with Malaysia and wait onsite for 2.5 hours for someone to re-zone a fabric at 3am in the morning..? (I left as they were no closer to getting it done after 2.5 hours) If they'd just handed me the password I could have had it done in literally 30 seconds flat.

[Rodp]

Originally Posted by MAD

Is that example of 1000 vs 1mil realistic?
Saying there is a bigger market in the US is a bit ambiguous.
In our population of 21m people, let's say there's 100 companies like yours. In the 310m people in the US, stastically speaking, there is a high likelihood of there being around 14,500 companies like yours. (310/21 * 1000).
So there is a bigger population to sell to, but there's also more competition.

Haven't you just outlined another reason to why prices are cheaper in the US?

[Yellow_Festiva]

Originally Posted by XP6

Yes thats because we are out in the middle of nowhere and once it lands here it can be thousands of km to your door...

Thats fine. I have sent items from OS to my place for cheaper than sending the same item from the next suburb.

I just looked at a postcard I sent from Tanzania to the inlaws earlier this year. I think it cost 800 shillings.

That's 48c in Aussie money. And that was flown from half way across the world!

Post card from Fiji... 60 Fiji cents if memory serves?? That's around 32c AUD. Was also sent by plane.

These things don't take into account distance. They could have been delivered to the top of Darwin or to the bottom of Tas.

Anyone who has bought stuff from Ebay on a regualar basis (eg from China) often gets the item and the postage for less than the postage alone in this country.... I just bought a passport wallet delivered for $5. If I wanted to send that item internally by regular mail it would be about $5.

These are just a few examples of how postage is much cheaper in other countries. Problem is, when it gets here, it still needs to be transported in just the same way as a locally delivered item... so how can it be half the price or less????

[MAD]

Originally Posted by Rodp

Haven't you just outlined another reason to why prices are cheaper in the US?

Sort of.
The manufacturer of the item sells a lot to the US, but it is shared across all of these businesses. Unless they are franchises, they don't have 'buying power' so similar prices from the manufacturer would entail.
If, both in Aus and US, the companies have access to an equal share of the market (around 21,000), then why would those businesses in the US be ordering more than you would here. In which case the only difference is shipping. And depending where the item originates, it may be cheaper to ship to Aus.
That gets us to competitiveness; The manufacturer is making millions of items because it is selling to the US market, it doesn't care about competitiveness at the retail level. That is up to the sellers to have some sort of edge over their rivals, be it profit cutting, extra service levels, less staff, whatever.

All of this is irrelevant if there are the same number of companies to support the increased population of the US, but I'm 100% sure that is not the case, but to what level is another story.

[Franco Cozzo]

Originally Posted by EL97

I agree with you on Spec Savers, I've brought glasses from them for $60, including lenses, which is great as I'm a poor uni student, can't really afford the brand names. Sure you could make an argument on their quality, however I've landed on them, bent them multiple times and they're still in one piece. Long lasting $60 that I've spent

$60 frames or $350 frames didn't matter when one of the other fat bastards at work stood on my $350 glasses....

I'm going to Specsavers this time.

[Rodp]

Originally Posted by MAD

Sort of.
The manufacturer of the item sells a lot to the US, but it is shared across all of these businesses. Unless they are franchises, they don't have 'buying power' so similar prices from the manufacturer would entail.
If, both in Aus and US, the companies have access to an equal share of the market (around 21,000), then why would those businesses in the US be ordering more than you would here. In which case the only difference is shipping. And depending where the item originates, it may be cheaper to ship to Aus.

All of this is irrelevant if there are the same number of companies to support the increased population of the US, but I'm 100% sure that is not the case, but to what level is another story.

Exactly.

The number of like business servicing the US customer base will be larger than the amount of Australian businesses servicing Australian customers, but to what degree? Who knows. I very much doubt each industry falls within the disparity of population ratios, you're more likely to find a lower ratio but larger companies. With more/larger companies fighting for the consumer dollar, one sure fire method to compete is lowering prices.

[UberKnee]

Originally Posted by MAD

This whole talk of prices to meet wages is BS.
The ONLY time this really becomes part of the equation is when something is manufactured here. (disregarding the relatively small increases in paying employees, insurance, etc)
Imported goods have no reason, other than gouging, to be as highly priced as they are.

As someone mentioned earlier, I don't mind paying a premium for Australian made goods. I do have a probelm with paying a premium to an importer that is nothing more than a box mover.

Agree. Paying what we do for Aussie goods is one thing, fair enough (at times), our prices are inflated to where that's what it costs to make it here. But paying 2-3 times as much as what an imported item costs in its country of origin is hard to bare. And at the same time you can buy Aussie made goods through America and get them for half the price as well, when they're shipped across the world twice.

Originally Posted by trippytaka

Erg... this again.

Owning a small t-shirt business on the side has taught me a few things about scales of economy. Basically, as a wholesaler, or distributor - when you order a thousand of the one product, you can buy it at a certain rate. When you order a million of the same product you get it a hell of a lot cheaper. Thus you can pass on savings and you keep your prices down in order shift more stock, and the cycle continues.

The problem here VS America is simple. There are 21m people in Australia. There are over 310m in America. All sales markets are much bigger, so manufacturers of items are able to reduce their costs because they will be selling so many. Wholesalers then buy more, because they have a bigger maket to sell to, so they enjoy the reduced costs too.

Other MAJOR considerations are:
- Excessively high commercial property rents (not going to start a debate here about property prices, but look at America for a comparison to how much a shop will cost you to buy or lease, and then look at Australia).
- Comparitively high wages for unskilled workers (look at miniumum wage in USA vs here)

Both of the above add to the overheads of the Australian retailers.

Is it sustainable? No.

Interestingly, there was a brilliant piece the other day on the burn out of China. Basically, the USA manufacturers are starting to fire up again because China's wage growth is starting to level out the manufacturing costs and the USA is starting to draw level with the Chinese again on locally produced goods. Very interesting.

I can understand all that, but its just off putting when you can buy the exact same part for half the price from overseas. Id rather spend my money wisely than spend more than I have too because the market reflects my wage.

[Cabbage]

Originally Posted by Rodp

It's already been pointed out several times in this thread but looks like it's being ignored for the purpose of being able to moan about it more.. Compare the median wage in the US to here. Ours is significantly higher. Combined with economies of scale, it dictates that the prices for the same goods in the US compared to here would be cheaper. End of story.

Agree. But we are generally talking about goods not manufactured in Aus but imported into Aus. Therefore the only extra cost besides import costs are distribution or sales costs. This would not add up to the extra amounts we are being asked to pay. No argument that a product fully designed and manufactured in Aus will generally be more expensive due to higher labour costs etc. I don't say these businesses are ripping us off or their prices aren't fair. But if a pair of identical Nike sneakers made in china, sold for 50% less in the US than in Aus, with the US and Aus having similar exchange rates, you have to ask why? Australians have been accustomed to paying more due to our historically weaker dollar, in the US they would never pay what we pay for shoes. You are crazy if you don't buy shoes online these days.

The commodore being sold in the US is interesting. Would be good to see the business case. The yanks would never pay what we pay for the commodore/monaro. How did they sell it so cheap.

Off topic but in a car magazine in the US they listed 10 cars they wanted to see make come back, things like the kombi van, buck riviera, they also mentioned the el camino and went into a short April how good the Holden ute was and talked about putting a corvette engine in it. Aussie utes would be a massive hit in the US.

Clinton

[blueoval]

From what I have experienced with online shopping, I will write below.

I usually buy cycling goods from a popular UK website. The prices there do not compare with the AUS market here, and to top it off, if I spend more than $85 in goods, I get FREE postage to Australia from the UK. The last 3-4 times I have also shopped thru this cycling website, I also get additional discounts for being a loyal customer.

I have shopped at Australian and US Online stores and while I like to support the local underdogs, it makes it harder to shop locally as the local shops I like to shop at usually have more expensive products and no free postage option for a minimum spend limit. Or if there is a minimum spend limit, it is far higher than I am willing to purchase goods with. (this does not include Ebay which I know you can get free postage with)

To compete, I feel you need to adapt and think of new ways to generate interest in your business rather than being strict in not reducing your own margin. Sure don't undercut yourself to oblivion, but look for other ways to make the customer feel like they are getting a good deal while still making some profit and still surviving.

Those that shop online who know what they want are usually interested in a) a good deal/cheapest price, b) a quality product and c) getting a warranty/return option on those goods if required.

Customer service I have found in my experience is mainly reserved for in-shop customers who want to ask questions, get advice, and prefer to deal with a person face to face, and they are happier to pay more for the privilege.

Take this how you will.

[Rodp]

Originally Posted by Cabbage

I don't say these businesses are ripping us off or their prices aren't fair. But if a pair of identical Nike sneakers made in china, sold for 50% less in the US than in Aus, with the US and Aus having similar exchange rates, you have to ask why?

..and as I already have stated, the answer has been provided several times already, you just don't seem to want to accept it.

To break it down as simply as possible.

Higher bulk volume = savings per shoe.

Lower cost to do business (wages, employee benefits, rent, other assorted services) = savings per shoe.

If you want price parity, take a huge pay cut, strip your employee benefits, charge less for rental, goods and services, grow the population exponentially and you might get there one day.

[Duffman]

I moved from Australia to the US (New York) and apart from the rent it is very cheap to live here.. then again rent is probably on par with Sydney. I pay $3.50 (pretax) a day for unlimited transport and around $15 a day for food which is breakfast, lunch and dinner all purchased out. The liquor is dirt cheap ($9-12 for a 750ml spirit bottle) and the bars are amazing and you will often receive free shots/beers every 2nd or 3rd round. A big boozy night will typically cost $60-80.

Australia is great as well though. They both have their ups and downs. Some days id like to get up and go for a swim in the beach and well the Hudson river isn't really up to par!

[Cabbage]

Originally Posted by Rodp

..and as I already have stated, the answer has been provided several times already, you just don't seem to want to accept it.

To break it down as simply as possible.

Higher bulk volume = savings per shoe.

Lower cost to do business (wages, employee benefits, rent, other assorted services) = savings per shoe.

If you want price parity, take a huge pay cut, strip your employee benefits, charge less for rental, goods and services, grow the population exponentially and you might get there one day.

I think youre missing the point. No one wants to give up our standard of living and employment benefits for a cheap can of coke and a pair of sneakers. I think almost all on this forum would happily buy Australia to support Aussie industries even where their products cost a bit more than imported goods.

What we are questioning really is the price gouging that obviously occurs across different products. To the bloke that imports goods into Aus and sells them at a decent price will still making a profit, no problem. However some imported goods are clearly out of whack.

Your argument about the cost of doing business in Aus does not explain the price difference between certain goods in Aus and the us. In a lot of cases the importer is doing little more than storing and distributing, the extra money for the higher Aus wages does not justify some of the price differences. You also conveniently leave certain costs of doing business that favor Aus out of your simple explanation. Tariffs on imported footwear in Aus are currently 5% whereas in the US it can be up to, wait for it, 67% depending on the price of the shoe. Australia has some of the lowest import tariffs in the world (correct me if I'm wrong).

Buying goods in bulk would provide some cost saving but as mentioned in an earlier post a bigger market provides more competition which may not necessarily add up to greater individual orders but more of them.

I think a lot of Aussies think they are getting ripped off on some imported goods which is why people are now buying so much stuff online.

So are you happy paying what we pay for all imported goods in Aus?

[Rodp]

Originally Posted by Cabbage

So are you happy paying what we pay for all imported goods in Aus?

Yes I am.

[2011G6E]

Basically, yes.

The tip with buying car and motorbike parts and accessories from the states is to choose the most basic postage...if you choose something like express air mail, it will cost an absolute bomb. When I bought a pair of hard leather weatherproof saddlebags for a bike I had a few years back, the cost of the pair of heavy bags in a big box cost only $35 from California to my door...but I picked the cheapest sea mail, and it took three weeks to get here, the minimum time period they estimated (they said "from 3 to 6 weeks"). If I'd have picked the express air mail, it would have cost me, I seem to recall, over a hundred bucks postage.
Total cost, $235 to my door, Australian, back when our dollar was only about 80 cents to the US dollar.

So buy away (now more than ever), but don't order anything you urgently need right now, and be happy to wait a few weeks for travel time with the cheap postage rate option...the money you save will be amazing!

[Franco Cozzo]

It only took me 5 days from pushing the buy button to a lawn mower arriving at my door, only cost $120 freight too and it was a big box.

This was from Amazon USA.

[Angeldust]

the price of McDolnadls has gone up again, and for once i am now starting to really hurt especially when purchasing 'normal' items like food, cigarretts and alcohol. These things are now a 'luxury' to me. I am slowly sinking into poverty.

Time to elect a National Socialist party, close all borders, kick out all foreign mining companies and start again.

[Yellow_Festiva]

Originally Posted by Angeldust

the price of McDolnadls has gone up again, and for once i am now starting to really hurt especially when purchasing 'normal' items like food, cigarretts and alcohol. These things are now a 'luxury' to me. I am slowly sinking into poverty.

Time to elect a National Socialist party, close all borders, kick out all foreign mining companies and start again.

I know a few countries where a pack of durries costs between 50c and a dollar and an 'average' bottle of Vodka costs $3......

And to think I don't drink and smoke......

[Cabbage]

Originally Posted by Rodp

Yes I am.

Never bought anything online from overseas, buy all your car parts imported into Australia by someone else, never bought cheap DVDs from a dodgy bloke in Bali, pay what ever is asked no question?

[Rodp]

Originally Posted by Cabbage

Never bought anything online from overseas, buy all your car parts imported into Australia by someone else, never bought cheap DVDs from a dodgy bloke in Bali, pay what ever is asked no question?

The only time I have ever purchased something from overseas was when the product wasn't available for sale here.

[Angeldust]

well i had 'SPAM' sandwich for dinner last night.

Funny thing is, i like it, as from where i came from, this was once a luxury item (eastern europe).. hehe

+10 for 50c cigga's and $3 vodkas

[xisled]

Originally Posted by Cabbage

Never bought anything online from overseas, buy all your car parts imported into Australia by someone else, never bought cheap DVDs from a dodgy bloke in Bali, pay what ever is asked no question?

Try looking on ebay for items. You will be surprised how cheap they are.

For example.

My Alpine Type R subs retail in Aus for $399 each. I got them to my door in 5 days from the USA, for $200 each and this includes postage.

[Karnage]

So those who blame economy of scale and local wages for the price differences, please explain this:

4 Munroe shocks for an f100 allegedly Australian made. Made here, shipped to the states, taxes paid, warehouse costs etc etc wholesalers sell to retailer, and then sends them back to australia to my door for Aus$114 so that comes in at $28.50 including shipping. Locally the same shocks are $996 or $249 each.

So from what i understand, the cost involved in these items staying withing Australia and going from the manufacturer to the retailer is nearly 9 times as much as sending them around the world?

[Rodp]

Originally Posted by Karnage

So those who blame economy of scale and local wages for the price differences, please explain this:

4 Munroe shocks for an f100 allegedly Australian made. Made here, shipped to the states, taxes paid, warehouse costs etc etc wholesalers sell to retailer, and then sends them back to australia to my door for Aus$114 so that comes in at $28.50 including shipping. Locally the same shocks are $996 or $249 each.

So from what i understand, the cost involved in these items staying withing Australia and going from the manufacturer to the retailer is nearly 9 times as much as sending them around the world?

We have to go through case by case basis now?

It's impossible to give a definitive answer as to why there's such a disparity. Perhaps the US distributor sells tens of thousands of them per year and the Australian distributor sells 3?

I'd guarantee you that the US distributor purchases a significantly higher volume. The price that they purchase them at has to be a price that is competitive in that market (and hopefully a price the manufacturer can make a profit on), otherwise the distributor wouldn't have incentive to import them.