Price Discrepency

[tbentley]

Originally Posted by mick pinner

...why bother advertising something so much dearer than an identical product.

Perhaps because he figures he will still sell enough at the higher price to make a reasonable profit and doesn't need to keep so much stock. Many business models are based on the low turnover, high profit scenario as it tends to provide a better return on investment. Why go to the expense of selling 100 units at $5 margin when you can sell 10 units at $50?
On the flip-side it can prove to be a short term plan if there is robust competition. Sad to say that the astronomy market in Australia is not very strong at all. Interested beginners who aren't internet savvy can find themselves believing they have no option. Perhaps this vendor believes this is a market he wants to deal with?
Travis

[Stephen65]

$525.00 in stock post immediately.
price 2. $671.00

That's only a 27% difference, I have seen much larger discrepancies on identical or near identical equipment between Australian stores. And when you start factoring in buying from the US as an option you can see price variations of 200% plus on scopes and even more on accessories.

The lesson is to always, always shop around, not just in Australia but also overseas via the net. You can save a lot of money with a bit of research. Asking in forums like this one about pricing and alternative options is often a good idea too.

[astronut (John)]

I'm a happy 12" Lightbridge owner for two years now.
When they came out in early 06 I was prepared to pay the extra dollars for a new model.
My gripe is that two years later with the dollar hovering around 90 cents US for quite a while, that the prices HAVE NOT dropped at any dealer.
When I purchased mine it was $1499 (the dollar was worth 65 cents US)
the similar model in G.S.O based scopes was $1200)
NOW the 12" LB is still $1499 and the G.S.O. 12" is $800!!!
What Gives !!!

[mick pinner]

l'd like to see a dealer explain that too.

[Louwai (Bryan)]

Originally Posted by Zuts

I go to the local telescope shop quite often and ask advice. People are only human. If I never ever got anything there then why should they give a rats about my problems and offer me free advice about what would best suit my stated goals. It would be, god, here comes that bloke again, i wish he would bugger off and try ebay or something.

Paul

Paul,
It's the old "word of mouth". If you did frequent a shop as you say, without ever buying, how many people would you tell about this shop & the great advice they give, how friendly they are, how helpful they are.
They are effectively increasing their customer base through you.

If they told you to bugger off, how many people would you tell. Probably just as many & so they are decreasing their customer base.

If I was that retailer I would welcome as many people as possible to my outlet, weather they purchased or not.
Word gets around, which is exactly what WE are doing here.

Cheers,
Bryan

[DJDD]

My rule of thumb:

if i intend spending a large sum of money from smaller retailers I always buy from the one whose car is not much better than mine.

[Omaroo (Chris Malikoff)]

Originally Posted by mick pinner

Chris, both vendors have dealt with this range of products for a while.

Hmm... with that said, it's all a bit rude then.

Obviously if their price for the same item is that much higher - they're either terrible at their marketing (not knowing their competition) or are trying to dissuade buyers on a certain line for whatever reason.

[Stephen65]

My gripe is that two years later with the dollar hovering around 90 cents US for quite a while, that the prices HAVE NOT dropped at any dealer.
When I purchased mine it was $1499 (the dollar was worth 65 cents US)
the similar model in G.S.O based scopes was $1200)
NOW the 12" LB is still $1499 and the G.S.O. 12" is $800!!!

I was looking at buying a CPC11 XLT about eighteen months ago. Australian price was then $5950. Same scope is still being listed at $5950 by some Australian dealers despite a marked appreciation in the A$.

Meanwhile in the US its price is US$2800 = A$3100. Even with GST and freight etc it's a huge difference.

However its not fair to say that no dealers take account of exchange rate fluctuations, I know that the Tak dealer in SA changes his prices to match A$/Y movements (which is why I am glad I bought my Tak when the dollar was at 104 yen) and Bintel did discount the price of TV EPs to take into account dollar appreciation (and also because people were buying direct from the US).

[Starkler (Geoff)]

Originally Posted by Stephen65

did discount the price of TV EPs to take into account dollar appreciation (and also because people were buying direct from the US).

Market forces brought to bear from educated buyers
The internet is a wonderful thing

[Suzy_A]

Usually when I buy something like some astro or photo gear etc, I try and find out as much as possible before I even go into a shop.

I then go into a shop and ask the salesperson’s advice and comments about the item in general. "Hi, I want to buy a camera. What do you recommend?"

I then usually go on and ask about products A, B, C etc, all of which I have researched beforehand.

I also usually ask the salesperson what they themselves use.

I do all this to see if what the salesperson tells me is a load of crap or whether they actually know anything about the topic. If they can prove that they do know something, then I consider shopping there.

It's amazing how little a lot of salespeople know. I once went into one shop and asked about something and they said that they don't sell those items. I told them what page of their catalogue to look on and their catalogue number and how many they had in stock. All they did was want to know how and where I got a copy of the catalogue from and how did I know they had some in stock. All I’d done is had a look at their webpage, which had these details.

If a salesperson doesn't know these sorts of things, then I won't shop there as it shows me that they are not serious or interested in what they are doing, apart from, perhaps, making money. Obviously other lies that the salesperson tells me how much shipping costs (usually almost nothing), the weak Aussie dollar (???), warehousing costs (it cost $300 to keep a 10 x 10 x 10 cm 1 kg packet on the shelf for a couple of days?) and so on also tend to put me off.

[norm]

My gripe is that two years later with the dollar hovering around 90 cents US for quite a while, that the prices HAVE NOT dropped at any dealer.

Yeah, thats my bug bear too John. I know it went down mid last yr for a month or so down to $1295 - and probably should have bought it then. I can pay it the full price, but refuse to do so, knowing it should be selling cheaper. If the product itself has improved thru' modifications as a result of the initial batch (eg, heavier springs, bobs knob equivalent etc) I could understand, but it hasn't.

[tbentley]

Just as a thought, is there any duty payable on astronomical equipment brought into Australia? Not that this would account for such a massive price discrepency anyway but I hadn't thought about it before as I haven't had to consider importing a large piece of equipment. Still that is talking between foreign and local pricing, not between local dealers.
Has anyone talked to a dealer about this premium we seem to be paying on locally sourced product? Could it be that US dealers get much better pricing because they buy/stock in much larger quantities because of the bigger market. Not that I'm trying to justify anything, just thinking out loud. There's every chance that the locals are merely taking advantage of the uncompetitive nature of the local market.
Has anyone tried to put pressure on a local dealer by letting them know that their pricing was forcing them to shop overseas and import themselves? I'm sure it wouldn't work on a low price item but on some of the more expensive gear it would have to help. Maybe not get it down to the US price but at least decrease the difference to a level where the local support (i.e. warranty) could justify the discrepancy.
I'd be very interested in reading an article if someone was to go to the effort of speaking to a few suppliers in Australia. If all of them refused to participate I suppose we could draw our own conclusions.....
Travis

[astronut (John)]

Travis,
I won't bet my last dollar on it.............yet, but from my understanding the G.S.T. replaced all the taxes, levies etc that Governments have placed upon us over the years.
Whilst I agree that the U.S. market is infinetly bigger than our backwater, it still doesn't explain the exchange rate.

[Stephen65]

I know there isn't any duty on imports from the USA (free trade agreement) and when I imported a telescope from Taiwan I didn't pay duty. You do pay GST if the cost of the item exceeds A$1000 though.

[Louwai (Bryan)]

Originally Posted by tbentley

Just as a thought, is there any duty payable on astronomical equipment brought into Australia? Not that this would account for such a massive price discrepency anyway but I hadn't thought about it before as I haven't had to consider importing a large piece of equipment. Still that is talking between foreign and local pricing, not between local dealers.
Has anyone talked to a dealer about this premium we seem to be paying on locally sourced product? Could it be that US dealers get much better pricing because they buy/stock in much larger quantities because of the bigger market. Not that I'm trying to justify anything, just thinking out loud. There's every chance that the locals are merely taking advantage of the uncompetitive nature of the local market.
Has anyone tried to put pressure on a local dealer by letting them know that their pricing was forcing them to shop overseas and import themselves? I'm sure it wouldn't work on a low price item but on some of the more expensive gear it would have to help. Maybe not get it down to the US price but at least decrease the difference to a level where the local support (i.e. warranty) could justify the discrepancy.
I'd be very interested in reading an article if someone was to go to the effort of speaking to a few suppliers in Australia. If all of them refused to participate I suppose we could draw our own conclusions.....
Travis

Everything that comes into Australia is scrutinised by Customs.
There are many different duty amounts for many different things, ranging from 0% to 40% & in some cases more.
Most general items are 5% duty.
Some items eg clothing = 17.5% duty.

Specific duty on Astro gear, I don't know, but I will find out from my customs broker. He will tell me exactly.

Duty is only payable on the actual cost of the commodity as purchased.

GST is payable on EVERYTHING.
Cost of item + shipping + shipping insurance + $ value of import duty.

If you purchase an item from overseas, where the PURCHASE cost of the item is less than AU$1000 & it is not for resale, then you do not pay import duty & you do not pay GST.

Also, don't forget, when comparing US prices to AU prices.
Many will say that we have the shipping cost to AU + the taxes.
Most likely the US prices you are looking at will be RETAIL prices, therefore, those prices will also account for shipping to the US + US duties & taxes.
So there's not REALLY that much difference in costs.
Main difference is volume as someone noted earlier.

[Stephen65]

The other interesting tidbit of info to know is that when it comes to figuring out whether an item is under or over the A$1000 limit Customs will convert the foreign currency price you paid into A$ using the daily rates published by the Reserve Bank on its website as at the day the item was shipped.

Sometimes foreign shippers will declare the purchase cost + shipping as the customs value on the declaration that accompanies the item but the A$1000 limit is determined only by considering the actual purchase cost.

If you do go above the A$1000 you have to pay GST on the purchase cost plus shipping though.

[MortonH]

I must disagree with several things here.

Originally Posted by Night Owl

Hmm, let me get this straight... A salesman can find the highest price a customer is willing to pay, but if a customer does the same to a salesman he's a penny pinching scrooge and deserves what he gets! How do you spell hypocrisy! Oh man, some guys just can't help hanging themselves!

Depends on how you decide on something's 'value'. Is a Picasso painting really worth millions of dollars? After all, it's only some splashes of paint on a canvass. Is your wife's diamond ring really worth ten grand? Value is not absolute. If a salesman can sell the same thing to two people for different prices, good luck to him. As the consumer, you have the option not to buy.

Originally Posted by Night Owl

And its even better, apparently if you ask for advice about something they want to sell you are then under some non existant fantasy obligation to then pay what they want for it! Holy smoke, next retailers will be charging admission fees, and pay by the minute advice, but only after you give them your credit card details. How dare a customer expect 'free' information about a product or its suitablity!

There are many, many areas of business where you don't get free advice. You want advice on where to invest your money? You bet it'll cost you for that advice, even if you don't follow it. That person's advice is their intellectual property, which has a monetary value.

Originally Posted by Night Owl

Oh, I forgot that retail customers are the cash cows of the retailers, and must be milked for all they are worth. And heaven forbid if a cash cow ever breaks free of being milked, and goes to another dairy. It might start a stampeed.

There already is a stampede. People expect to walk into a shop in the high street (or wherever) and spend an hour asking all the questions they can think of, then they shaft the shop owner and buy elsewhere.

Originally Posted by Night Owl

And I thought talking about mowing the lawn was a pretty poor alternative to actually mowing it. But some people expect to be paid for talking about mowing the lawn! Man that's rich!

Same as talking about buying something is a poor alternative to actually buying it!

Originally Posted by Night Owl

I should start a company on the strength of this arguement and call it something like "Jim's Verbal Mowing"! I could charge even more because it would be environmentally friendly, as it wouldn't actually use any two stroke fuel. Hmmmmm, value adding.

Fair enough. But if you rock up outside my house and ask if my grass needs to be cut, I'll charge you for my intellectual knowledge of whether it needs to be cut, or if I even have any grass! (tall wall or hedge required for this to work, obviously.)

Originally Posted by Night Owl

I'm not a very good cash cow, and I'm proud of it. And I've got the saving to prove it.

No-one wants to be a cash cow. And guess what? No-one has to. But, suppose the most expensive shop had the best knowledge, the best range of products and the best service. If everyone flocks there to ask questions and take advantage of them but then buys from a cheaper online store, there's no incentive for the other place to maintain its service.

And this is the point that gets lost in these arguments. Everyone wants the product at the cheapest price but they don't want to pay for the service. So they effectively 'steal' the service from someone else first and go elsewhere for the "product only" deal. At least on IIS the 'service' is actually being offered up for free and we can all contribute to it. We're lucky Iceman doesn't charge us for using the forum. Thanks, Mike!

Morton