Tool Industry product mark-up

[John Saxton]

It isn't all driven by the US dollar, I recently purchased an ER25 collet chuck from a UK retailer, even with international courier delivery (7 days to my door) the total cost was . Same item at H&F, in excess of . Item comes from China, goes to UK, courier delivered to OZ and then costs 1/3 the Oz price? Just a tad out of whack me thinks.

Fair comment,It is hard when local retailers bleat about supporting the same product here and having us paying more for it here than importing it for less.
Whereas if I can I will support my locals, because they have often been more than fair to me but they only have a margin they can move to.

If negotiating a price it is now with the use of the internet that we can source prices far and wide to compare also with the market rates.
The retailers know this however getting stuck with old stock bought when the dollar was low does not help them.If only we're also not expected to carry that burden.

A lot of countries dont have the tax initiatives that are in place here which does not help matters so we struggle on mindlessly and in vain trying to make sense of it all.

Cheers

[Waldo]

Hi Waldo,
I have been a Mac user for 20 years. What sort of iMac costs $12500? Must be a beast!

Not an IMac, but a Mac Pro - Two 2.93GHz Quad-Core Intel Xeon with other bits.

[Shedhand]

"We have a very small market compared to the US or Europe, so the quantities purchased from overseas is also rather small"

This is no better illustrated than with the deal we get from Northwood for the Great Bessey Buys. If it weren't for the volume we would be paying much higher prices per unit. This country needs to double it's population for the market to be really competitve.
And as an aside, I track down a retailer who gives good service and build a relationship with them. Over time, they see you as a valued customer and WILL do deals with you.

[John Saxton]

"We have a very small market compared to the US or Europe, so the quantities purchased from overseas is also rather small"

And as an aside, I track down a retailer who gives good service and build a relationship with them. Over time, they see you as a valued customer and WILL do deals with you.

Shed, they still have a bottom line irrespective of the relationship you may have with them and whilst I have also garnered a respectable relationship with my locals they do understand my preference to source outside if the differing prices vary beyond their bottom line.

The relationship I have with them is on a good footing and no offense is considered if I'm open with them I believe.

Cheers

[Shedhand]

Shed, they still have a bottom line irrespective of the relationship you may have with them and whilst I have also garnered a respectable relationship with my locals they do understand my preference to source outside if the differing prices vary beyond their bottom line.

The relationship I have with them is on a good footing and no offense is considered if I'm open with them I believe.

Cheers

G'day John, the experience you cite is probably very true in the larger population centres but Tassie is a very small market and competition for custom in the hardware trade is fierce. Often the one which provides a discount - no matter how small -AND great after sales service is the winner. Other than 4 or 5 of the online forum sponsors, I use 2 retailers here and they have always looked after me -(even with products I've bought elsewhere).

[Istracpsboss]

It's just as bad in the UK.

This has always been bad but I think a recent one was really astonishing. For years, I've found identical things from US suppliers that were USD10 would be UKP10, even though they were made in neither and even when the Pound was 2Dollars.

I was looking for a specific Italian made router bit last night from CMT. I could switch between suppliers in different countries from their website and so compare prices. What was selling in the UK for UKP46, from another EU country, so without any import duties, as the UK and Italy are both in the EU, was available from four US suppliers at 35USD and from Amazon at 26USD, including free shipping within the States.
26USD is around 16UKP! The UK price was around three times the American price despite the US having to pay import duties to import it from Italy! I've had one sent to an American client, who'll bring it with him the next time he comes.

Why do UK consumers tolerate these blatant rip-offs? In this day and age, when buying over the internet is feasible, the difficulties imposed by having to get across the Channel to check prices in the next country are not so insurmountable.

Cheers

Peter

[John Saxton]

Doing some surfing on a product not sold here in OZ I accessed it in Europe the cost was 34 Euros not a problem in itself, but was told it would cost me 160 Euros using UPS to post it to OZ.

It was'nt as if the item was heavy this I could understand, their answer was that they only use the one shipping option....LOSERS in my view if advertising on the net and restricting yourself is a no win gain.

Obviously a ludicrous example of how not to shop in Europe even using the net.

There are cases where you just have to do without some things.

Cheers

[brisbanefitter]

business is business and it has a bottom line and business owners will charge what they can, usually what the market will pay, the market being the end user.
the bottom line varies depending on the business structure.
think for a second though, these massive price differences in the examples given. those who are selling at the higher price obviously dont rely on turnover as much as profit. those selling at lower prices probably rely on turnover more, lower price will attract the consumer and increase turnover, giving good cashflow etc.
price they buy at is probably similiar across the board i would guess.
some of those selling on the net at low prices have little to no overheads, possibly some kind of warehousing but minimal staff.
thos who charge higher amount you may find are large well established operations with multiple store locations, 100's of staff, warehousing costs etc etc etc.
how many web sellers have a store front with actual people you can talk to, face to face over a counter?

just my two cents worth

[Istracpsboss]

Hi

The Amazon one apart, the companies offering were CMT agents who I'd accessed from CMT's website. That was why I was so surprised. I would have thought their agents would have roughly similar prices. The UK one doesn't even have to factor in import duty, as both supplier and agent are in the EU. The US ones would have had import duty to factor in, yet were still dramatically cheaper. UK mark ups are huge compared to other countries, for all sorts of things, cars particularly. It was traditionally harder for Brits (and Aussies) to compare prices because they couldn't readily visit neighbouring countries without a lot of hassle. The internet makes it so much easier.

Cheers

Peter

[ubeaut]

Want cheap - Hold off buying till the new year. the AU$ is tipped to be possibly as high as $1.10 to $1.20 against the greenback. Terrible news for U-Beaut Polishes but fantastic for anyone wanting to buy tools, etc, as it could be like getting as much as a 50% discount on their already cheaper prices and will also mean freight which is charged in US$'s will be cheaper as well. Win, win situation for Aussie buyers.

Absolutely devastating for Aussie exporters like us.

Cheers - Neil

[bobcarter]

For a while now I have been more than a bit peeved at the price charged by Australian distributors on quality tools and equipment. I've been buying on-line from the US and even with freight saving about 1/3 ... sometimes more.

I recently looked at the Incra LS table saw system. I can buy from the US at $379 US from Woodpecker.com ... but the Australian price is $1125 inc GST. Even with exchange rate, freight and whatever the mark up is hefty to say the least. And remember at $379, the US guy is still making his PROFIT!

I would prefer to buy from the Australian guy but at these mark ups it's not on and one wonders if and when the ACCC might want to look at this scenario. Sadly the practice of excessive mark up seems widespread in the industry and the only ones being hurt are the local agents/distributors who are losing business, custom and credability.

Any others as frustrated as me dealing direct with the US?

[wolften]

I agree with most of the folks above whose opinion is that Oz retailers overprice their goods.
Enough has been said on the subject and my buying preference on smaller items will be US sites.
Larger machinery and few larger hand tools will be sourced here.
Shipping is the contentious issue here for all us OS buyers.
I was recently told of a shipping agent... BONGO...check it out and let your impressions flow forth.
Cheers

Glenn

[Waldo]

I would prefer to buy from the Australian guy but at these mark ups it's not on and one wonders if and when the ACCC might want to look at this scenario

I think that some consideration must be given to shipping costs and that any distributor in Australia of US products must be able to markup to cover their costs plus make a profit. Brisbanefitter has raised from very good points.

[bobcarter]

C'mon Waldo - let's be reasonable and honest here! The US price equates to about $420 AUD so that gives the Australian distributor a margin of $705 to play with. And you also have to acknowledge that the Australian distributor would have to buy at less than the US retail price. As I said, I have no problem with people making a profit (I own and run my own business so know the finer points of profitability) - just looking for a sense of fairness.

[damian]

I recently looked at the Incra LS table saw system. I can buy from the US at $379 US from Woodpecker.com ... but the Australian price is $1125 inc GST. Even with exchange rate, freight and whatever the mark up is hefty to say the least. And remember at $379, the US guy is still making his PROFIT!

No, your wrong. It'll cost you about $500US to ship that system to australia. The rails are vastly oversize and USPS won't ship them, so you have to go with UPS/Fedex etc.

Get a quote from woodpeckers on that system delivered to Australia. Be sitting when your read it.

Also timbecon list it at $949AU plus shipping, pws lists at $1125.

Ultimately a seller can ask whatever price they want and a buyer gets to decide whom they choose to buy from. It's all good. You don't always make a purchasing decision on price alone.

Before you go wishing for a bigger population in Australia consider the wider consequences. We're already out of water, and the only reason living standards in aus are higher than NZ is our mining industry. The more people in this country the more competition and the thinnner it's meagre resources are spread. If you want to live in a densly populated slum and work your guts out just to eat you have plenty of options overseas. I'd like to see us back at 13 mill, less traffic, less pollution, less crime, easier living. Maybe young people could even afford to buy a home again.

2c