Exorbitant pricing by distributors

[Hi-Phibian]

Nope, they count 3% on a few european products and regular tarriffs on eveything else that incurs duty.

Add everything up, like it was your business.

One item I forgot to mention is forward cover. Most mass brands require pre orders for production, so your stock leaves a factory 90 days after order. As you want to stabilise things and not get whacked with an unknown forex rate in 90 days, you buy forward cover. Again, this adds to your basic FOB cost and is also one of the reasons price increases and reductions are sometimes delayed and lag behind big ROE swings.



As far as local product goes, I guess one could write an essay.
Many South Africans love imported is better. We also prefer flash malls where we can buy everything inone trip and have a coffee and an icecream for the sprogs. These places cost huge money and put huge pressure on retailers to curtail costs and focus on what sells. Selling imports with international best buy awards, reviews, flash websites, glossy brochures is found to be easier and has a better hit rate. For local manufacturers to get to that levelthey would need to become more international and this would require large investment thay may either not have access to or perhaps do not want as they may loose part of their identity and beliefs in the great commercial machine.
In greater markets, having a small percentage of amplifier sales is far more significant. Sadly it seems the old go big or stay home applies. De Paravicini and Manley have shown how specialist product sold in larger markets can get one to run with the bigger dogs and how operating from here was a struggle by comparison.
Money talks. Any marketer will tell you that a good product with a great campaign will outsell an excellent one with a poor campaign.


The Eurekon phono stage, made here is hardly sold in SA but enjoys a good folllowing in the UK, where folks seem to trust dealers in back streets and buy with their mind and ears, not ego or status need. For some reason they are less aversly affected by its south african heritage then we south africans seem to be.  Designs Unlimited exports their stands worldwide and imo their local dealer base has actually shrunk.

[chipwelder]

I hear you, I agree that there has to be a profit and overheads etc... but can it realistically get - for a camera I'd like - MSRP 1299US$ translates roughly to ZAR10400 and the price in South Africa is R17999??? and R15999 over the internet stores in SA, which I wouldn't go for???

[Robert_E]

... and R15999 over the internet stores in SA, which I wouldn't go for???

Sorry but why not? I've bought a lot of things at local online stores and have never had issues. One day I was looking to buy a Nikon Lens from an online retailer, but found one cheaper at an actual store close to me   Anyway if you're in doubt whether the store is selling legit wares, phone Nikon or Canon (for instance) and ask them about the store. That's what I did and Nikon actually came back to me!

[chipwelder]

If the brick and mortar store has a webfront too, sure.
I use a lot of old lenses and secondhand stuff, so if I want one of those repaired, or get some advice re: a particular lens, I take it to a person... that is a service, and I really don't think they make a lot of money on that, so I prefer to support people who do this specialist business and can help me sort out stuff when it is necessary, so a specialist store is what i want, not even a all in one big box store.

[FWP]

My first post--could not ignore this. Six years ago I was standing at a wholesaler while they were repairing my receiver that cost me R 16 000,00 less 10%. I overheard a telephone conversation quoting a retailer on the same receiver---R5 600,00 excl. I could not believe this ---went home and phoned the wholesaler the next day claiming to be a salesperson at the retail store I bought my receiver from.   Price--R 5600,00.
R 8016,00----That's the profit the retailer was making. No shipping or BS. The receiver gets delivered to his shop. He also sells loads of other manufacturers products. With that type of mark-up I can understand that at some retailers the owner can afford to leave a young sales person in his shop while he is playing golf. Most of the time the sales staff are incompetent as well. Now if the mark-up was more realistic he would be more service orientated and we would have a sales person who actually knows his products. There would be healthy competition. They are making enough money that they don’t have to care. There are definitive exceptions to this of which HFX is probably the best example. Unfortunately there are only a few good guys. Many of the not so good retailers have more than one owner and a couple of sales people. What a great business where two people earn a healthy salary and are hardly ever in their shop. Maybe we should open a few more retail shops. For those who don’t believe me---try it before you deny it.

[Hi-Phibian]

That sure is way higher then the norm and really is abnormal. My explanation would be that there may have been a special to clear out a model to be phased out for eg. Sometimes silly stuff happens. 12 years ago I remember there was an excess of DSPA1092 amplifiers. The "special"  cash price was nearly half, due tomassive price reduction offered from Japan. We sold several dozen in a fewweeks at R9K or something, a few weeks before the same amp was R16K. Our margins in % never changed though.

[stereo247]

Nope, they count 3% on a few european products and regular tarriffs on eveything else that incurs duty.

Funny the guys at customs said it was anything produced in EU 

I've read this thread and think that maybe, as springbok supporter usually do, we paint everyone with the same brush. I know that from product type to product type the "industry" markups are similair but I think what hacks most guys off is that dealers are just a ripping us off in good old SA. So I would defend the whole lot of them with such passion. 

Take the 3 series BMW... we make it yet pay 30% more than an they do in Argentina where our exported car is sold.