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Old 03-12-2014, 04:32 AM
Mokusatsu (Australia)
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In all seriousness though, I know the fault doesn't really lie with local retailers. They have to apply a certain markup in order to cover their costs, which is on top of the markup applied by the wholesalers, importers, and GST.

It's really hard to be in retail, I know this because one of my first jobs was as a milkman, back when direct household delivery of milk was still a thing. Supermarkets would regularly sell milk retail for less than the wholesale price which I paid, and they could cover their costs on razor thin (or negative) milk margins because customers bought other things while they were there. It sucked, but at the end of the day I accepted that the people in my area did not owe me a living, that I was not a charity and the only way to run the business profitably would be to compete based on convenience (direct deliveries to the doorsteps, or sometimes the kitchen fridges of often immobile elderly customers), range (being able to get in any yoghurt flavour when the shops refused to carry anything but strawberry and vanilla for example!) or whatever.

I could feel sorry for the people in retail, but if they're losing money because they can't compete with discount Internet retailers, then maybe they need to examine their business models and find other income streams.
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  #22  
Old 03-12-2014, 01:54 PM
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John K
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Interesting discussion. My 2 cents worth.

Having worked in the wholesale/marketing area for a long time, the issues that work against Australian retailers can be:

1. They don't have high volumes compared to retailers o/s therefore what they can buy the products for and the rebates they can get especially with currency movements generally means products are more expensive for them than for retailers based in the product manufacturer's home countries e.g. telescope companies in the USA with their local retailers

2. Freight - remember that our retailers have to get the product shipped to them, hold the stock, and then sell to us.

3. Retail rentals - Rents can be quite high in OZ compared to O/S in terms of retail trading costs as can wages on an hourly rate. e.g. USA

The evolving model for retail is to look in-store, then order on-line, and get it shipped directly from O/S. The retailer becomes a portal and a viewing area. This already happens for the GSO RC products I think?? all you need is demo stock on the floor.

Prices have gone down, but when an o/s retailer is discounting, tough for our retailers to compete. BUT, retailers that offer good service, technical expertise and good staff, means that people can be prepared to pay extra for this service. I think Bintel is a good example of this. Also, if you want it NOW, and the retailer has it in stock, then instant gratification is worth something.

Another reason retailers like harvey norman want the government to charge us GST for purchases below $1000. That alone creates currently a 10% difference in pricing.

Clear skies,

John K.
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