Quote:
Originally Posted by Bassnut
OICURMT, out of curiousity, why are you assuming a starting price of full one off retail $US each for a wholesale purchase of 210 identical items ?.
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The exercise was not with respect to absolute costs, but relative costs. In particular, what an end consumer could achieve in the way of relative savings. I do admit (thus the "Classing" comment) that there is an inherent level of uncertainty over the entire process chain from source to sink.
I also recognize the "purchasing power" of the USA through "economies of scale", however, as a single source of product, delivered through a single source of branding, the absolute differences with respect to the overall wholesale price should be relatively minor. My rational? Part of my career deals with being able to cost on a global scale, taking into account FOREX, regional trends and commodity prices. In this particular exercise, I asked myself. "How much granularity is required in order to prove or dis-prove a point?" The answer, not much when viewed through the eyes of an end consumer. I didn't start the exercise to prove that thing were more expensive here due to inflated scathing pricing practices. I purposefully set the final target per advertised pricing and worked backward to a solution. The data I used is real, not made up. But as you pointed out, my flaw in the analysis is the retail angle.
Thus............. if you consider a "retailer" here in Australia buying from a "retailer" in the USA and then shipping a million dollars worth of product to Australia and then reselling at AUSTRALIAN retail prices, you can see that the Australian retailer still makes close to a 25% margin on the goods purchased OVER THE COUNTER in the USA. Thus, this exercise demonstrates the worse scenario for the retailer, not the best.
I hope this explanation was "clearer than mud", but somehow I feel I may not have been as articulate as I could have been.
OIC!
<Late Edit: I should state for the record that I do not consider a 25% profit margin to be excessive, considering the locked market that is Australia (read between the lines here)>
<Another Late Edit: I should also state that I've never actually shipped a single, individual container anywhere, except for personal effects. The quantities I've tended to deal with are much large in both volume and weight, thus, I can not *exactly* stand steadfast on my number without actually picking up the phone and making some inquiries>