It always frustrates me that people think that it's retails stores like my own that are "ripping people off", it's just not true in some cases.
First, please understand that running a business means that you need to make a profit. This profit needs to pay bills and wages, and to be blunt - make it worth the business's time and effort at the end of the day.
Most ebay stores don't really have bills to pay, so it's often a nice bit of bonus cash on the side, whether they make $50 profit or $5000 a week it's profit and can supplement any other work that they might make reasonable money off.
I can't live off $50 a week and neither can my staff, can you?
Prices for local resellers that want to offer local support are usually dictated by local wholesalers. For a very small business this won't mean anything, but as sales increase so do things like warranty claims and local support becomes a lot more valuable. There are quite a few "local" shops now that don't offer local warranty beyond a DOA (2 weeks in some cases). Amusingly enough this is actually illegal, stores trading in Australia MUST offer at least one year warranty, and that doesn't include having to deal direct with an overseas manufacturer (grey market goods won't be covered by local service depts).
One other thing that is effecting prices a lot is the weak $US, some suppliers are fairly agile and can adjust prices along with the fluctuating dollar value, anything we actually import directly we normally adjust immediately (or at least quickly), but anything we source locally we can't adjust unless our supplier adjusts their sell price to us.
Sennheiser and AKG are easily the worst brands here, they're both distributed by big, old fashioned companies who think the internet is a fad and it will go away eventually
This means they keep their outdated pricing and pocket the profits that the new buy rates get them. We buy the HD650 for the same price we did when the $AU was buying around 60 US cents, so guess who's making all the extra money off the dollar now? Not us, that's for sure.
There's only so far I can drop the price on something before it doesn't make any sense to sell it. Take the Sennheiser HD650 for example, the Australian distributor makes a few hundred bucks on this model (I'm guessing around $300 per unit, unless Sennheiser are ripping them off which isn't very likely) whereas we hardly make anything (far less than $100 per unit).
Some local wholesalers want to make the same (or more) margin that their retailers do when selling at RRP (or above!), which is ridiculous if you ask me, but I'm just one guy.
Next on the cards is freight. Individual products can be freighted "free" from US companies to Australia, even if the US company is only making $5 on this sale it's not like the majority of their business comes from Australia, they will make up for it with local sales.
On the other hand, to get large quantities of goods shipped to Australia costs money. I just recently had a shipment of a certain product arrive
and half the cost of the entire order was freight. Top this off with GST (10%) and import duty (5%) and the price will be at least 15% higher before freight is even added.
On top of that are quantities/quantity buy vs price.
I used to deal direct with a certain US headphone manufacturer, they had buy breaks of (from memory) 10, 100, 1,000 and 10,000 units. This was on a product that sold locally for around $600AUD at the time.
10,000buy? I honestly doubt the entire Australian market would be able to sell that quantity in 5 years, let alone one shop.
So I managed to get the 100buy price from them by explaining how small the market here is, awesome, I'll be able to compete in price right?
Wrong.
The 10,000 buy price was so much lower it meant that stores in the US who COULD order those kinds of numbers would mark it up by 40% and sell
$1 below my 100buy cost price before even getting them here. How can I possibly compete with that, other than selling at a loss?
I have freight, import duty and GST to add to start with, and then maybe make some money on top of it, you know... to make it worthwhile.
Just to give you some numbers to make this clearer:
Let's say the 100buy price is $140, and the 10,000buy price is $100.
This means it costs us $140 per unit, then we add import duty, freight and GST which comes to around $180 per unit. Now let's add the cost of our free delivery to customers and a little margin and say we sell it for $220 per unit.
So that means you can either buy from us at $220 per unit, or from some guy in the US for $140 per unit (or even lower in some cases because they have so much more room to move), we're both making $40.
Still think we're money grabbing monsters who want to rip you off and have a "monopoly" on the market?
AAanyway, what am I trying to say?
The only local stores that are "ripping you off" are ones that sell at RRP or above.
If you want to complain about local pricing,
contact the distributors and tell them that you'd love to buy from your favourite local store (Headphonic of course!) but their pricing is too high. The more people do this, the more local suppliers are likely to drop their pricing.
I've been championing the cause for 6 years now, I ring suppliers and give them an earful regularly, I complain to sales reps, I post them links, I write them emails, I even contact the manufacturers and tell them that local pricing is silly.
So far I've managed to get local pricing on quite a few brands down by doing this, in other cases I end up giving up and sourcing products elsewhere, which is not ideal but I'd rather help my customers out if I can.
No, I can't compete with US ebay stores that make $1 on some products, but I really do hope that even if you don't buy from my shop that you at least appreciate that I'm trying. I certainly appreciate all the support I get from local customers.
Sorry about the wall of text, but hopefully this helps people understand things a little better.
