Pricing Disparity

For most of the larger stuff I use a well known Australian Brand.

I used to use spray cans as only used it infrequently, but a recent project was costing me $22 a coat (2 spray cans, or $33 a litre).

Bit the bullet and finally got a spray gun, but the pricing structure is .....

Well only word I can think of is outrageous.

If buying by 250ml can it costs nearly $40 a litre, if buying by 500ml can it costs $32 a litre, if buying a litre $26, if buying 4 litres $18 a litre.

I know buying in bulk saves money but really how is this justifiable?

I tried buying stull in bulk but find that I waste far too much and things like DO go off
now i just bite the bullet and buy small quantities
seen the price of meths lately, I used to strip old shellac with it but its getting ridikeros
astrid

FWIW Astrid, and a bit off topic, the new Organoil DO is said not to go off in the can.

Haven't had mine long enough to put it to the test though.

Quote:

---

Originally Posted by Cruzi

I know buying in bulk saves money but really how is this justifiable?

---

Cruzi, I understand what you mean, but the thing to remember is the packaging and shipping costs. It probably doesnt account for all of it.. but one 4 litre tin is the same as four 1 litre tins and the same as eight 500ml tins or sixteen 250ml tins.. thats a lot of tins.. .

the cost of packaging isnt just in the steel/ plastic/ whatever.. its in the forming of it, packing into boxes etc..

anyway.. thats my 2 cents

Quote:

---

Originally Posted by ftje

Cruzi, I understand what you mean, but the thing to remember is the packaging and shipping costs. It probably doesnt account for all of it.. but one 4 litre tin is the same as four 1 litre tins and the same as eight 500ml tins or sixteen 250ml tins.. thats a lot of tins.. .

the cost of packaging isnt just in the steel/ plastic/ whatever.. its in the forming of it, packing into boxes etc..

anyway.. thats my 2 cents

---

That's true but the cost of the packaging is a very small percentage of the whole deal and wouldn't account for the litre price differences quoted. I just think they want you to buy 4 litres of it and not use half.

If you buy anything in a large quantity you will usually get a discount.

To some extent there is extra cost in the extra tins etc but that has always been that way with most things even chocolate bars or even nails or screws ( noticed how much one of those small packs cost against a full box ). Just be greatful you have a choise. What if they only sold in 4 litres as they do for some products. That would be a real pain if you only wanted to paint somehing small like your letter box.

So judging how much you would use over the life of the material and only buying that much is the sensible thing to do. All paint has a shelf life, even if you don't open the tin it will go off so its always a good idea to buy from a distributor who has good turn over and be aware of how long the material may last on your shelf. A good guide is to take off 6 months from its shelf life to allow for getting from the factory to the shop before you buy. Eg: 2 pack paints only have a shelf life of 2 years, air dry enamel ( good brand) its about 5 years so if you can't use the poly in 18 months or the enamel in 3-4 years buy a smaller amount.

Astrid, solvent if sealed in a tin lasts for years, I would be buying metho in 20 or 60 litre tins even if you don't use it quickly you will be still using it while the price is getting more expensive by the month. The price seems to follow petrol so as it looks like thats going up big time soon I would be stocking up.

In the early 70's there was a thinner shortage ( actually it was a complete drought) Where I worked we bought several 200 lite drums before the panic set in ( by accident actually) and ended up being the only ones able to paint for months. We worked out not only did the initial cost work out cheaper because we purchased so much but when it became available again the price had risen 30%.

From that point on we always kept a large stock of thinner and usually a price rise kicked in before we had to order more so we always ended up in front. The boss never objected as I don't think the price even fell over all those years.

Selling a 5 litre Shellawax is much more economical than 20 x 250mls which is the main size the average person buys.

1 x 5 liter bottle =

• 1 bottle
• 1 lid
• 1 label
• 2.5 minutes total time.
• Ships as is, no box required
• Freight to Melb $7
• Markup at shop approx 20%

20 x 250ml bottles =

• 20 bottles (each similar in price to a 5 liter bottle)
• 20 lids (each one approx 10% dearer then the one for 5 litre bottle)
• 40 labels (1 each for front and back) approx 40% more than 1 x 5 litre label
• or 20 wrap around labels each the same price as 1 5 litre label
• approx 1.5 minutes total time each bottle.
• make and supply box for shipping.
• Freight to Melb $7 for a box of 20
• Markup at shop approx 60%

Just off the top of my head, it costs around 15 times more to produce 5 litres in 250ml bottles and 10 times more for 500ml bottles, than it does to produce 1 x 5 litre bottle which in the end sells for a much lower mark up because it is ordered in specifically for a customer.

By the way 25 litres is even cheaper again by about 20% than 5 x 5 litres.
:ranton:
Spoke to a friend who supplies Sydney with 100%IMS (pure alcohol) on Friday. He has just been hit with a 20% price rise for his pure alcohol. We will probably cop the same from our supplier shortly.:damn:

We had our first price rise in 7 years a couple of months ago. A 15-20% increase. In the same period most of our raw products and almost all production costs have gone up by a minimum of 60% some by over 80%. Turpentine goes up month by month, all our bottles and jars keep going up almost month by month because they're petrochemical. Freight goes up almost on a quarterly basis, our suppliers no longer hold stocks of raw products so we have to wait and hope they get them in on time so we can continue production.

Just had to pay 1200 air freight for 3 bags of wax from Germany, part of a 1 tonne consignment we should have received 12 weeks ago, those 3 bags should have cost around $9 each for freight if delivered on time and by sea as ordered.

We have around $65,000 raw materials sitting in the factory going no where because we haven't been able to manufacture anything for almost 8 weeks and to top it all off the US $ keeps dropping so the yanks will be buying a whole lot less.

We should have had around a 70% price rise just to catch up but instead, like many of us local manufacturers we took a massive profit cut just keep the buying public happy. We actually had a couple of people come to us at the Melb WWWShow and complain that they payed much less from us last year. Weird because we still had the same price tags and special signs we've had since the 2000 show.

At the Wood Show we charged 50% more for a 500 ml bottle than for a 250ml bottle of Shellawax (that's half as much money for twice as much product) and still had lots of people saying they couldn't see the value in it.

I'm sorry to have to say this, but a large section of the buying public, really just don't get it. Everything is relative folks. You pay for the convenience of having a small quantity. :banghead:

Rant mode off! I'll pull my head in now and go back to working in the back room.

Humph..... Thought I'd got it all off my chest but no I just remembered.

We recently took over the manufacture of the Rotary Sander which enabled us to drop the price quite dramatically and last week got hit with a 120% price rise in the rubber used for the heads along with a 40% price rise for the bearings.

:rantoff:
RAND MODE DEFINITELY OFF NOW... I'm outa here before I think of anything else.

Oh yeah... Still haven't been paid for the massive shipments we sent to the US and Canada a month or so ago.:gaah:

As alcohol (either drinking or metho) is not a petro chemical it is interesting to see the comment that it tracks the price of petrol!? Whisky doesn't!

Pusser

It's because it is now being used as a fuel additive.

Also begs the question.... Why the 38.134 cents per litre fuel tax we now have to pay on mineral turpentine? Costs way more than diesel and petrol but for some reason they must seem to think we're going to use it to run a vehicle on as an alternative.

Just another impost on business, $381.34 extra I have to find every time I buy turps. Bloody ridiculous.

I remember when the first fuel crisis was happening some 20 odd years ago the price of pure turps went up because some DH reckoned it was a petrochemical. When they found out it wasn't they said oh well who cares it's on there now might as well leave it. Did the same with metho then too. :no:

Even better still around 10 years ago there was a bit of a famine happening in India and they ate up millions upon millions of shellac beetles along with a really large portion of the nations shellac which just about ruined the shellac trade and put 60% onto the price of shellac overnight. Has happened again once since. Also happened with carnauba wax about the same time but thankfully carnauba has had one of the steadiest prices of all our raw products. No price rise in almost 10 years.

Ooops, opened a can of worms here... :spyme:

Fully understand that convenience costs, was unaware at just how much it was costing.

Started buying larger quantities of most things now, just hope that shelf life is long enough to gain benefits :fingerscrossed:

Being a wannabe boxmaker I should understand it better, the amount of work that goes into a box is quite large, no matter if its quite small or a large blanket box.

Further to Neil's comments, most retailers rack up substantial cost by running the retail outlet. The labour to stack shelves is the same for a 250ml can as a 10L can. One major retailer was quoted at 40% of their potential margin gets lost between the receiving dock and the cash register. Of course they are going to recoup that cost.

The most concerning thing about alcohol in fuel is the impact it is going to have on food prices & supply. It is already more lucrative for Mexican farmers to sell their corn in the US for fuel than to their traditional customers for food. This has caused skyrocketing prices for food. It will happen to grains here if we let it. Alcohol is not a solution unless you have big tropical cane farms like Brazil.