Why buy in Australia?

[twood]

Why do we buy in Australia? This was a topic of discussion over coffee after our drive yesterday. 

 

I bought some BBS wheels for my 964 off E bay last year. They needed new centre caps and because they have internal valves I need a couple of inflator inserts.

I rang the Australian importer and agent for BBS -the prices quoted are below and in red the same items from Tirerack in USA.

Yes, they are over double the price to buy here but also look at the quote time and the estimated delivery times.

 

Aust -Cost for the Centre Cap          $110 each x 4                          $440    

Aust - Cost of inflators                      $20 each x 2                             $40                           

Aust – Postage                                 $15                                           $15                            Total Australia AUD $495   

 

USA - Cost for Centre Caps           $45 ea x 4                                             $180

USA – Cost of inflators                   $12 each x 2                            $24

USA – USPS small package           $16.45                                      $16.95

                                                                                                                                         Total USA USD $220.95

 

Time to receive quote Australia 7 days

Time to receive quote USA 24 hours 

 

Delivery Australia 12 weeks                                                  

Delivery USA approx 7 working days

 

I am more than happy to buy from Australian suppliers and even pay a reasonable premium but this and some other examples are just plain ridiculous. 

[Orion03]

Yeah in this modern Internet age, the aussie guys have got to be kidding with their prices. 

 

However our minimum wage is so high compared to the US... so that must impact on prices of things.

 

years ago when my Lotus Elise was new, I got it serviced by the official Lotus workshop... and the guys tried to charge me around $400 for a wiper!

 

OMG I made them pick up the old wiper and put it back on the car.

[Kerry]

Its hard to find a patriotic answer to that question... The global market is an imperfect model but it sure does favour the online savvy purchaser.

 

I had a very similar experience recently when buying a lens for a camera... Quoted price including delivery out of Hong Kong was around $500 (3-5 working days - normally 3 if in stock), Aussie supplier $ 795 and 2-3 weeks if in Aust, longer to wait from overseas!!! I felt like telling them to get it from Hong Kong!!!

 

I have to say though that, as far as photographic supplies are concerned, the Aussie companies are starting to wake up and generally you can buy much closer to the OS price if you're willing to forgo the Aussie warranty, and accept their third party one, which appears to offer the same deal anyway...

[murf]

Did you send the email back to the BBS supplier?

I think you'd find they are probably buying them o/s so they don't have to carry the stock.

Seen that done before! I had it happen recently with a Porsche supplier.

 

I try to buy Porsche gear here but its hard to get the 60's stuff.

 

Mustang gear is pretty close to the US prices with a slight premium.

But pretty acceptable.

[76 C3.0]

Try Performance9.com.au

He operates out of my suburb. No shop front so costs are kept down.

He claims he can almost always beat the US suppliers (pelican).

 

I could pick parts up for anyone if they like.

 

W

[JV911]

I had a very similar experience recently when buying a lens for a camera... Quoted price including delivery out of Hong Kong was around $500 (3-5 working days - normally 3 if in stock), Aussie supplier $ 795 and 2-3 weeks if in Aust, longer to wait from overseas!!! I felt like telling them to get it from Hong Kong!!!

 

Same here but for cycling gear.

 

 

I buy a lot of cycling gear and try and support local shops where possible but I find it hard with the markups. I'd happy to pay 10-20% more to buy locally but 100%+ markups are just taking the piss. And delivery times that are slower from o/s rub salt in the wound.

[twood]

Did you send the email back to the BBS supplier?

I think you'd find they are probably buying them o/s so they don't have to carry the stock.

Seen that done before! I had it happen recently with a Porsche supplier.

 

I try to buy Porsche gear here but its hard to get the 60's stuff.

 

Mustang gear is pretty close to the US prices with a slight premium.

But pretty acceptable.

Yes I did contact the supplier and yes, they were genuine BBS products from, I would say, the same factory. As I have said before - happy to pay a premium but their quote and delivery time was ridiculous. 

 

Here is their reply:

 

Ken,

 

Thanks for your feedback and I see your point should the product you are comparing it with a be a Genuine BBS product.  I also agree if product is like for like then this price difference is certainly worth pursuing.

 

However RRP from BBS is 50 Euro and with freight form Germany import tax and GST which we have to pay it brings the RRP to $110..

 

Again ask the question to your USA supplier about if they are genuine as we see this all the time so get them to Guarantee fitment and ensure they are genuine.    if they can I completely see why no reason why you should not buy.

 

$220.45 Cents is well below our buy price as an official BBS distributor so I am  sorry we could not compete on this product.

 

However if we can ever assist in the future please contact me and happy to assist.

 

Kind Regards and Merry Christmas

 

Chris Podesta I AMG Australia

Director

5/218 Wisemans Ferry Road

Somersby, NSW 2250

P. +61 2 4340 1999 I F. +61 2 4340 1998 I M. +61 (0)400 006945

E. chris@amgaustralia.com I W. www.amgaustralia.com   

 

         

[LeeM]

A friend of mine restoring a 912 bought a bunch of gear from the USA.

 

Aussie quote (an SA business) was $2150. MAYBE up to 4 to 6 weeks to fill the order, postage price depending on size and weight.

 

Rennspeed USA quote was $940. Delivered within 7 days including postage

 

Why on earth would he spend and extra $1210 for the same parts that MIGHT arrive within 6 weeks?

 

Sorry, but If you want the business, you have to compete with overseas distributors, simple as that

[tazzieman]

 

Sorry, but If you want the business, you have to compete with overseas distributors, simple as that

Those in the political & financial world are always telling us we're living in a global economy now.

For better or for worse , that is the future - if not now. Deal with it - or adopt a hippy lifestyle.

[Tit]

Some of the arguments for remoteness and small population also don't make sense.

I used to buy a bunch of bike stuff from torpedo7 at massive savings. In New Zealand!! I fully dura-ace'd a new bike in 2010 for Less than half local retail.

I'd go to my local bike mechanic and show him the prices and ask him how I could not but their gear over his. He told me to buy from t7 and he'd be OK with it. I always made sure I serviced there and recommended people to his store, but the parts prices often made things difficult.

Same here but for cycling gear.

I buy a lot of cycling gear and try and support local shops where possible but I find it hard with the markups. I'd happy to pay 10-20% more to buy locally but 100%+ markups are just taking the piss. And delivery times that are slower from o/s rub salt in the wound.

[Caledonian]

While I'll agree some businesses need to take a look at them selfs, it's not really a fair comparison of markets with 22million in oz and over 300 million in the US. Does it not always come down to the availability of an item related the the amount of people wanting it, or in simple terms supply and demand.

I was reviewing a file at work the other day, there was a question over a used parts price for a Holden part that was not available. This was not for an old Holden but a 2010 model, some research confirmed this part was and had been unavailable for some time. Pre-empting this would be queried the supplier had sent a copy of the invoice from the wrecker with the note on the bottom " sorry about the price mate "supply and demand". The price charged to our supplier was twice the retail new price!

I recall a discussion with motorcycle manufacturer rep regarding why some models were not sold in Australia, to put things in perspective he stated that if his manufacturer pulled out of Australia tomorrow they would not even notice as the market was so small.

In saying that, I would not swap cheaper local parts for some of the current problems in the US.

[Coastr]

A good old topic.

To be straight - you shouldn't reward people with your business if they don't want it.

To be fair to the local retailers, a lot of it has to do with the wholesale price - you often here that a landed price from the USA or UK is cheaper from what the locals can buy it for wholesale. So the issue is with a distributor - and they are the ones that should feel the pain.

To me, this goes back to an underlying sentiment in Australia that it has always been easier to run to the government for protection than to try and compete. We sheltered a tiny car industry for 40-50 years and punished Australians with high prices for that entire time. The same thing has been repeated in industry after industry. In each case, protectionism was always the first response, and once a protected industry arises, they are hard to kill because of all the special interests they create.

The internet has punctured much of that, but there is still plenty of it around. We still cannot buy cars from anywhere in the world, because....why is that? Why can't I buy a 993 from Hong Kong? There is no logical reason, yet try and overturn the rules and watch the industry swoon and clutch its pearls and bleat in the media about death traps on the road, and confusing the poor consumer. Even the ACCC seems to be hell-bent on protecting the consumer from the scourge of low prices more than anything else. Imagine the scourge of Coles and Woolies offering fuel discounts to customers! The cheek! They also sell cheap bread and milk! Stop them at once! We cannot have Australians saving money, or they might get ideas above their station and run out and buy German sports cars from another country!

It is changing and it will change, but not before some reactionist politicians try and convince you that protectionism will make your life better. Don't fall for it. And make sure your kids don't join a protected industry, for they are doomed.

[JV911]

Not sure whether to post this here or in the “Vent” thread…

 

Yesterday I was in a Sydney CBD camping/hiking store, a store in which I've spent many hundreds of dollars, looking for a new hydration pack. The one I was after was listed as $79.95 but having just been in another store a few doors up I knew it was $69.95 there. I enquired with the staff if they could match the price, which after a call to the other store to confirm, they did.

 

However when I presented my “loyalty card”, which entitles members to 10% off, I was told that no further “discount” could be applied as it was already being price matched (to a competitor’s retail price mind you). I was shocked but reluctantly made the purchase.

 

In hindsight, and on principal alone, (after all it’s only $6.95) what I should have done is gone back to the first place. Actually what I should have done is bought it online from for $49.95!

 

This this is not the service I would expect, especially when I’m trying to do the right thing in supporting my local retailers - something for which I’m happy to pay a premium over online prices.

 

So much for loyalty. Guess where I wont be going to get kitted out for my trip to Mt Blanc in August?

[edgy]

This is always and interesting discussion and I agree with OPs choice, I would do the same.

I think there has to be a point where businesses realise that we are in global market and ensure that their model provides relative pricing within the market places their products are sold.

[TrevMcRev]

The price differences between here and US/europe can be substantial, but i'd like to add that it is not always a case of the Aussie retailer taking the piss.

 

There are lots of reasons not always evident...

 

Under $1000AUD spent overseas (inc shipping) and you are avoiding Duty & GST.  An Australian retailer importing in volumes of anything that allows them to have stock of that item will have had to pay that to bring it in, and will also have to add GST for you.

An Australian retailer/importer will have had to pay for far away international shipping when a retailer native to the manufacturer/distributor will likely get free shipping.

 

Or if Aussie retailers are stuck in the old model of having to buy through an Australian Distributor of an international brand you have a "middle man" who wants their cut - further jacking up local prices.

 

This alone makes quite a difference.  Along with things like paying staff $25-30 vs $8-15.  We also have WAY higher costs for commercial premises, whether buying or renting.  I could go on..

 

What also happens alot is it is not quite as cheap as you first thought...  

Your currency conversion was under the published rates you checked when sizing up prices - banks are usually about 4c/$ less.

Then they stung you with an "International transaction fee" on some credit cards it will be 3%

 

None of that can be an excuse though....To compete with global online sales and stand any chance in what is essentially a converging world with fully informed buyers, we have to do an exceptional job of providing great service and provide a customer experience that outweighs, or at least softens the price gap.

[T-Man]

Interesting topic and certainly a very important one.

I believe there are two very distinct facets to this discussion that need to be differentiated.

Buy in Australia.....Certainly preferable, however I think we need to consider the origin of the product and distribution model.

I'm all for Australian made and will pay a premium to support the local economy. Last weeks purchase at Bev Marks for two double mattresses at a 25 % premium over the Chinese stuff supports my commitment. Happy to support the local furniture manufacturer where I can and as a local manufacturer ourselves I understand the difficulties and challenges that Australian manufacturing faces. But, when I refer to "Australian", I don't mean overseas owned companies propped up by government funding to retain jobs (sorry if I offended any GM people). My industry does not receive a single dollar of funding or any real protection from increasing imports, however it continues to hold steadfast, creates job opportunities for unskilled labour and supports local economy.

I do however believe that Australian distribution of overseas manufactured product is a very different case. Elsewhere in this forum I posted that an Australian premium of 15% was fair game on imported goods. Obviously some businesses are oblivious to the fact that the internet does exist and people are starting to catch them out. Even if the government imposes the GST on any import regardless of price, there are a number of distributors who are basically far too greedy and have exploited local consumers for far too long. Their margins are typical of the aforementioned examples and their opportunistic businesses will progressively be forced to change or come to a grinding halt.

Hmmmm.........let me think. Bilstein PSS10s at $5k locally or $3k from the USA. No brainier!!!!!!!!!!

[Pauly]

bare with me here as i haven't read the comments. But i've been thinking about this topic all week (out of this forum, so only saw this now) I'll read them when i get home or later today.

 

IMO

The problem is that Australia doesn't really manufacture much, we source out many parts from manufactures overseas which increases in price by the time us (the consumers) buy it. We need to pay import tax for bulk buying, shipping fees and all the other fees that are included. Then we need to add tax like GST, pay a stocking fee and a sale fee so everyone makes money.

 

Why don't we manufacture in Australia? Because everyone wants "cheap" and only cheap you'll get is Chinese. How do you compete with $2/h compared 30/h work rates in manufacturing in Australia. Price of living is high in this country. 

 

Some of you have traveled out of this country before. If you've been to the States, you'll notice everything is cheaper from food to car parts. But their wages are lower so equals to their living rates. Same goes in the UK but it's slightly different there. 

 

If Australia limited what we could import from overseas and pushed companies to start manufacturing in Australia, things would be different. Even if we had brands from other countries like BBS wheels for argument sake. We wouldn't need to pay all the importing taxes on anything. Theres a few more jobs there a lone, more tax for our government and not for the other countries and did i mention more work?

 

Who's fault is this?

ours..

We want cheap.. we keep buying from china or USA.. Aussy manufactures go down hill because demands are low. When demands are low, people get made redundant. We loose companies. We loose taxpayers to support the country. Tax increases. we all suffer more. 

 

In Australia, our standards are so high, we're on par with the germans. We still manufacture things in Australia like earth moving equipment. We make cranes and send them to china so they can build their buildings. I was watching a documentary about a Chinese building getting built and their construction manager said "I hope this building is build as good as this crane" "these cranes are built by the Australians and they're the best in the world"

 

I asked a few mates this:

If the government said to you "you can modify your cars and we'll be more lenient if you use Australian manufactured parts but pay the premium price of the parts being manufactured by us. So $3500 for a set of wheels instead of $2000. They all said yes.  

Being manufactured in Australia, It will be made up to our standards here, which is higher than most countries!!

[tazzieman]

 

We want cheap.. we keep buying from china or USA.. Aussy manufactures go down hill because demands are low. When demands are low, people get made redundant. We loose companies. We loose taxpayers to support the country. Tax increases. we all suffer more. 

 

 

New cars are more expensive than OS , so "logically" because our wages are higher we can afford them and their local maintenance costs???

As far as classics go , good luck keeping them all on the road using local parts prices and labour. Unless you are an enthusiast , and we are in the minority i.e. it's a niche. You put in unpaid labour costs sourcing parts and driving about looking for bits.

I've certainly seen plenty of enthusiasts stung by local prices , who then skimp on safety items such as tyres...

 

As they say , you can only pick 2 out of 3 of "cheap , fast , reliable"

[JV911]

 

Under $1000AUD spent overseas (inc shipping) and you are avoiding Duty & GST.  An Australian retailer importing in volumes of anything that allows them to have stock of that item will have had to pay that to bring it in, and will also have to add GST for you.

An Australian retailer/importer will have had to pay for far away international shipping when a retailer native to the manufacturer/distributor will likely get free shipping.

 

True but wouldn't an Aussie retailer "importing in volumes" be getting a wholesale price while we are paying retail? Same goes for shipping - the cost per unit to ship say 50 (of whatever the part is) would be far lower than what we each pay when we import 1 of said part. These would offset the Duty and GST, no?

[SteveT]

I don't know that going back to import tariffs like we had in the 70's and 80's is a step forward. If we restrict imports the countries that we want to export our meagre locally made goods to tend to put tariffs on imports from us to even up the scales. So we lose in export. And there is then the added tariff cost to everything imported and as you all know we import waaaaay more than we export so it just costs us all money.

 

My golden rules are I try to buy local where available and "comparatively" priced. If not available or not close in  price I buy overseas.

[Coastr]

True but wouldn't an Aussie retailer "importing in volumes" be getting a wholesale price while we are paying retail? Same goes for shipping - the cost per unit to ship say 50 (of whatever the part is) would be far lower than what we each pay when we import 1 of said part. These would offset the Duty and GST, no?

Realistically for anything in any sort of volume, international shipping costs virtually nothing. It costs more to pay to have something on a shelf than it does to import a container of stuff.

There is a company in NY that does Australian logistics for major US retailers, so they can sell direct to Aus consumers online. They are sending a 747 full of stuff every couple of days here. The gst is not a major component - if it as within 10% most of us would buy local.

Aus retailers are stick with middleman markups. They can't buy wholesale for what we can get retail. The middlemen have to go broke, and that includes the 'official' distributors like Porsche Oz. Modern logistics mean the entire aus market could be handled out of Hong Kong or LA.

To some people this all reflexively sounds bad for the Oz economy, when in fact the reverse is true. If local car enthusiasts can buy parts cheaper, they have more money left over for getting local mechanics, local events and other non car related activities like extra bottles of good Australian red. As a country we have to do what we are best at. Warehousing German car parts is not a comparative advantage for his country, so we should stick to what we are good at and import the rest.

[Tit]

Plus it would be a boon for the Aus-side logistics and supply-chain industry.

 

Realistically for anything in any sort of volume, international shipping costs virtually nothing. It costs more to pay to have something on a shelf than it does to import a container of stuff.

There is a company in NY that does Australian logistics for major US retailers, so they can sell direct to Aus consumers online. They are sending a 747 full of stuff every couple of days here. The gst is not a major component - if it as within 10% most of us would buy local.

Aus retailers are stick with middleman markups. They can't buy wholesale for what we can get retail. The middlemen have to go broke, and that includes the 'official' distributors like Porsche Oz. Modern logistics mean the entire aus market could be handled out of Hong Kong or LA.

To some people this all reflexively sounds bad for the Oz economy, when in fact the reverse is true. If local car enthusiasts can buy parts cheaper, they have more money left over for getting local mechanics, local events and other non car related activities like extra bottles of good Australian red. As a country we have to do what we are best at. Warehousing German car parts is not a comparative advantage for his country, so we should stick to what we are good at and import the rest.

[TrevMcRev]

True but wouldn't an Aussie retailer "importing in volumes" be getting a wholesale price while we are paying retail? Same goes for shipping - the cost per unit to ship say 50 (of whatever the part is) would be far lower than what we each pay when we import 1 of said part. These would offset the Duty and GST, no?

Yes, the Oz importer would buy at wholesale, but it doesn't necessarily even out.

*Long post warning, and "you" doesn't mean YOU.

Example:

Euro Manufacturer make a widget and offers it for wholesale supply at 100EUR ea.

Aussie reseller orders 10 a month at 1000EUR + 200EUR shipping which converts to 1760 AUD.  

Because it's over 1000AUD, he has to pay an extra $176 GST, Duty could be 5-10% lets say 5% in this case $88, Customs Fee $55 & Security Fee $11.  So his Landed Cost is $2090, or $209 AUD per widget.

 

The US reseller orders 100 a month because his market is 10 times the size.  He gets a further volume discount from the supplier for such large orders.  They offer it to him for 90EUR ea totalling  9000EUR.  His shipping is not much more, 500 EUR.  It converts to 12935USD.  His import duty would be 300USD and a fee of 45USD.  His landed cost is 13280USD, or $132.80USD ea.

 

The Aussie seller, knowing he has high business costs to cover in this country, prices the item at a 50% Margin so he prices the item retail at $418AUD.  $38 of that is GST he has to charge you.  $380 is left for him.  Less cost of $209 leaves a tidy $171.  He sells all 10 that month, and makes $1710......Before paying any of his high business running costs.

 

The US seller prices the item at 30% Margin to retail at $190USD.  He knows with his high volume and low costs that this will work out nicely. He makes $57 per unit and sells all 100 that month (20 of them to Australia!) and makes $5700USD...before paying his low business running costs.

 

You see it online for $190 and think "Bargain!....they are $418 here!!..less than 1/2 price....Winning"  

You add it to your cart, go to checkout, see it's going to cost $70 to ship... you think "Well it's still way cheaper than here!"

 

So now it's $260...USD.  You check XE and do a quick calculation...$260USD = $280AUD...still good.  Click Checkout.

 

You get your credit card statement and find it actually cost $291...Hmmm the bank just made 4% on the foreign exchange conversion.  And the sneaky buggers just charged you a 3% International Transaction Fee... Now it's cost you $299AUD.

 

You still saved some.  You didn't contribute any taxes to your country.  You didn't support employment.  You didn't help feed any kids or pay any school fees in your country.  And you didn't help that australian business still be there when you need them for that urgent part that you want to drop in this afternoon and pick up, or have expressed to you by 10am tomorrow.

 

And after all that, the Aussie who was "ripping you off" made $500 Profit after all other expenses.

And the friendly American who was really looking after you made x $1750 the Profit after all other expenses.

 

So what I just taught myself is I should move my business to the US, where I can make 3.5 x as much & Porsches are way cheap!

[Hounddub]

Very interesting reading. As an expat for over 15 years I have to say that I find the banter around this subject quite hilarious.

 

All the "passionate rhetoric" around the preference to "buy Aussie, buy local" has been proven to be merely hot air. Customers for a like-for-like product will resort for the most competitive pricing in just about every category. Therefore, if Australian retailers and distributors of globally available products think they can gouge the market based on their "exclusive" distributor agreements.....they are sorely wrong.

 

The simple fact is very clear, the world is a global marketplace and you create your competitive advantage  based on either price or service (god...I sound like Michael Porter!). Sure, in larger markets like Europe and Nth America there is a distinct economies of scale advantage, but if a local player can justify a margin based on availability or expertise they will likely succeed due to a consumer's immediacy of requirements.

 

I attempted to bring a low cost IT peripherals brand to Australia 6 years ago and spent months negotiating with the Harvey Norman, Dick Smith, Betta Electrical, etc groups to make a play only to be cut off at the nuts by these major retailers expecting MINIMUM 45%GP, 5-7% LTI incentives, early settlement discounts, advertising support..etc....etc....etc. The same brand operates very successfully around Asia throughout all levels of retails distribution at 20-25% average GP. You can probably understand that I didn't pursue that opportunity.

 

My 997 service packs have been sourced from design911.com for 2 years now after I was introduced to the extortion of Porsche dealer servicing here in Singapore. Fancy being charged $2500 for front and rear lower control arm bushes by the local dealer.....when the genuine (manufactured by TRW) items are available online for about GBP240! So if you think this issue is only in Australia.....it's not.

 

So, if you are happy to keep being gouged....then power to you, I'll be bookmarking Tirerack.com, design911.com, chainreactioncycles.com and every other modern global retailer. As a new father I would say my baby products shopping online has saved me over $10K!

 

Happy days!

[tazzieman]

As a new father I would say my baby products shopping online has saved me over $10K!

Bloody hell! Are the nappies gold plated these days???!!!