Strong OZ dollar, means anything when buying at local?

[noone]

Yep, not easy.

When shopping for coilovers, I could not find anyone in Australia (or even a Singapore distributor) Who came within 30% of what I got it for (including the freight charge from UK).

As many have noted, the cost to the buyer often has little to do with the cost to the distributor.

I work for a company who's margin on a product ranges between 15% and 1000%. It is a strange game.

[gregozedobe]

Yes, you can get things cheaper at times from overseas but you need to think about the local product support you would be getting should anything go wrong or need warranty not to mention the level of direct customer service that you may be offered etc etc etc.

I've heard this (or something very similar) mentioned many times as part of the justification for higher prices in Australia, but I don't think it stands up to closer scrutiny, particularly in the case of performance software remaps.

I'm looking at this argument being used purely as justification for a much higher price in Oz than what simple foreign exchange rates would suggest is reasonable (for the same product in both countries).

I agree that having local support can be important to many people, but what is being stated (as a reason for different prices) implies is that there is NO local support in the other country but there is local support in Oz, and that is why the product is cheaper there than here (the only other explanation is that local support in Oz is MUCH more expensive than there).

AFAIK there IS local support offered in both countries, and the cost of local support is built into the price in both, so this is not a rational justification for a much higher price in Australia.

Am I right, or have I somehow misinterpreted what is being said ?

[Tim]

As competition in this segment hots up prices will come down. Its happening already. Prices will be set at what the market will bare. Not what the dollar will dictate

Does it make sense to do 500 transactions a year and make $100 off each one or does it make better sense to do 5000 transactions and make $10 off each one?

The industry is way too small in this country to compare to the US market.

I think an ecu tune at $896 aint half bad compared to where prices were not that long ago.

[mikepologti]

personally if i can i try to shop locally infact there the very first people i source. but with some mods being 60%- 70% dearer even after you've imported them from over seas , its hard to justify buying local.

[GOLFBALLS]

Tim's got the point.

Europe and the USA have MUCH bigger VW markets so the retailers there have massive buying power from manufacturers etc.

Because they can buy up and trade huge amounts of stock in one go, they obviously get better bulk discounts from suppliers, so theoretically can offer more competitive resale prices to the customer.
Most of us operating VW affiliated businesses here simply can't do that and subsequently have higher prices.
I'd love to be able to go nuts and order a container full of performance goodies and take advantage of the discounts but there simply arent enough vehicles/customers here to sell to yet. And half the potential buyers just buy online anyway. Obviously if more people bought locally, the prices should eventualy become more competitive as suppliers can give better deals.

Of course there's heaps more to it, but it's not just about exchange rates. There's a little thing called buying power to think about.

Go to a huge liquor retailer and buy a carton $10 cheaper than the little bottlo down on the corner... The big retailer gets looked after by the brewery because they buy and sell far more stock, and even though its going cheap, the volume they sell makes up for it tenfold. sooner or later the little bottlo wont be there anymore.....

[gerhard]

Does it make sense to do 500 transactions a year and make $100 off each one or does it make better sense to do 5000 transactions and make $10 off each one?

It makes more sense to me to do 500 @ $100. That's 10 a week, or 2 a day, with "only" 500 customers to support.

Doing 5000 @ $10 seems to give the same end result of $50,000, but it's 100 a week, or 10 a day, with an additional 4,500 customers to support. Hell of a lot of extra work there. Reduces your effective hourly rate to an uninteresting number compared to example 1.

What a lot of small business people forget is to pay themselves for their time - If you can make $50,000 in a job you really need to make double that in a small business, since you should make wages and the business should make a profit. And you don't get holidays, sick leave, super, long service leave.