A thread about America, Australia, ARB and many other points

[achjimmy]

Sounds like your cracked the code. Suggest you by black widow and few other companies. Your going to nail it.

[cucinadio]

Sounds like your cracked the code. Suggest you by black widow and few other companies. Your going to nail it.

 .. lol.. I was about to suggest the same to you ... hehehe  mate.. all good in love and war ...

is it tho about all that.. or just about what we pay?

[Swannie]

Geez another thread taken off track

Swannie

[Moggy]

I totally agree with you that major shopping complexes are little more than extortion rackets robbing shop operators blind.  I have lost count of how many long running shops have been forced out of 'Bay City' in Central Geelong, only to be replaced by yet another seller of $2 junk. But we are told 'that is how the free market works'.
I am happy to pay to cover penalty rates, would even be happy to pay $10% more in cafés and restaurants at weekends for the privilege of having others serve me when I am out with friends at what remain the most common times for people to be off work and enjoying the company of friends.

Interesting as i'm sure i read somewhere in the last week that 30% of shopping centres/malls in the US will be empty by 2030???. the trend is back to local shops apparently.

But back to the main topic, Australia is always going to struggle against imports, i mean we can all stamp  our feet but if you have to choose between the $5 shirt from Bangladesh Or the $50 Aus made what are you really going to be able to afford long term.

We've worked hard (as a nation) & therefore think we're entitled! & unfortunately this has transferred to our kids (and workers) & they just think their entitled (i'm talking collectively) so until their is a change in mindset across the nation this will be pretty common place i suspect.

Besides if you asked me to chose between the "Local" BW $3000 drawers & the "Titan $1000 Imported" drawers well i can spend the $2000 difference supporting local farmers by buying produce direct  which appeals to me more i'm afraid

[achjimmy]

Good post Moggy, as much as deplore the Westfield management of shops etc it's flawed industry long term and although are trying to do is prolong it. In the U.S.  private stores and online is smashing malls.

Interesting again to see those  bleating what they'll pay to keep Aussies jobs. Their the same ones lined up with you and me to buy Jules Chinese  maxtrax and Mcgills light bars etc lol everybody has a price.

You wanna see a parochial market go to Germany or Japan. Ohhhhh they just happen to be manufacturing Giants too

[ozbogwam]

Yes, you're right mate. I forgot the "volume" excuse for hiking up the price .. sorry 

Oh.. and profit margin is determined by your particular business model.. take for instance the current business model of www.4wdsupacentre.com.au .. they have chosen to use a business model that drastically undercuts certain players in the market .. even tho some of these competitors are selling the same product at the expense of Australian manufactures [albeit some Australian made product].
Take for example the fact you can order Supercheap snatch straps from china for .70cents a piece tailgate .. and then sell them for $70 a piece in Australia .. you see business models are integral to profit margins and they all have a choice to make as to where and when they are taking the piss

Yep and you don't have to buy their stuff either.

Kinda like how Toyota charge through the roof or you could buy a Great Wall.

It's about different products priced for different sections of the market. Nothing to do with taking the piss, it's about determining what a particular market is willing to pay to generate a sustainable profit to make a company successful.

Some businesses seem to do it well others don't

Don't forget none of these products are NEEDS they are WANTS so pay what you feel comfortable with but don't begrudge those who are willing to buy from a different market segment

[achjimmy]

.. lol.. I was about to suggest the same to you ... hehehe  mate.. all good in love and war ...

is it tho about all that.. or just about what we pay?

Mate if you knew me you'd laugh. My livelihood is tied to Australian manufacturing. I have been involved with just about all the major manufacturers, automotive , medical devices, Defence, the sciences  universities etc.

That is why I am so critical of the governments, they have let this sector down soooooo badly.  And not just the blue bloods either. The "workers friend" is anything but that when it comes to manufacturing in AU.

Buy me  a beer or two next meet and I will have you an anarchist in no time. 

[GGV8Cruza]

Geez another thread taken off track

Swannie

Fixed it Swannie, split the threads 

GG

[koshari]

I see where your coming from mate. You can buy Arb air lockers (made in Australia) from the U.S. Cheaper than you can buy them local. How ridiculous.
Shane

i recall a few years ago back when GB chainsaw bars were still manufactured still in Braeside rather than now in china i bought a bar from the UK cheaper than i could source it locally. pretty interesting when freighting it around the world is cheaper than buying it in the same place it was manufactured!

[xcvator]

Carac, Dandenong, today $80-00 for a standard, garden variety hitch,no pin, no tow ball,  THAT'S taking the piss 

and NO I didn't buy it, found 1 on ebay in Hallam for $35-00 (in a shop ) 

[alnjan]

It may be a global market but each country still has it's own economy.  As we come off the back of the sheep and the mining boom becomes a pop, Australia is going to have to undergo some major changes for anyone to maintain their current living standards and for this country to be the great land that it is or was.  Unfortunately economics was only an elective subject at school.  Maybe in some cases it should have been compulsory.  Maybe then people would have some understanding of why lockers are a different price in different countries. 

[bobnrob]

I'm no scholar by a long shot, and I certainly don't have the answers, but I do have a theory based on experience...unadulterated greed!

eg: 2(?) yrs ago, we went looking for a new baking dish.

Tried shop (A), being part of a 'chain' store - $5X
Tried shop (B), not part of a chain store - $16

EXACT same baking dish, exact same wrapping with exact same writing, exact same baking rack, exact same size!

[Bird]

. pretty interesting when freighting it around the world is cheaper than buying it in the same place it was manufactured!

that's ARB Lockers.. made out the back, walk to the counter $1400. or made in office, through 20 sets of hands shipping to USA, to store, back to AU and to your door, $800...

All those 20 people whose hands it goes through have to make a profit or the close the doors...

[UIZ733]

We spent a month in the States recently. An amazing (if somewhat expensive) experience. In the States I could buy a 6 pack of any good Pale Ale for about $8.00 US. A ten pack was around $13.00  US. They don't sell 24 packs.
In Oz it is nearly impossible to buy  a six pack of any pale for under $15.00 AU. Some of the cheapest Pale Ales sold here are brewed overseas. 
Little Creatures make a reasonable/good Pale (approx. $18.00/six pack....$70.00?/carton in Brisbane) at Uncle Dan's. Stupidly I thought a possible explanation for the high price was the tyranny of distance (meaning it has to be transported from WA after brewing). Guess what it appears the Little Creatures we get in Qld is brewed in Vic. Why the ridiculous price then? I guess it must be the gold plated hops OR is it what business can get away with? Business is acutely aware of what they can get away with and use this fact at all times to improve the bottom line. We the consumer seem to be compliant so why change I guess? Wait until they (Government) 'tax' all online overseas purchases to polish off the rort. Jerry Harvey and other fat cats of business will have their wish granted sooner rather than later.
I could give many, many more, even better examples of unexplainable price gouging here in Oz. It is wrong to simplistically blame it solely on wages and the Unions alone. Business and all levels of Government are well and truly 'in it' up to their ears. Greed is God.
Rant over. 

[Wrex]

So what do you think the solution is?... Are you still in coffee?

No mate we sold our business a few years back.
Rental rates are beyond a joke here in perth. I have seen hard working families loose there businesses and homes due to rents rising 50% when the lease needs to be renewed.
Westfield, Centro and the like are ruthless and make obscene profits. We the consumer pay for it along with the lease holders.

A mate of mine works in the motorcycle industry. He orders a part for a Yamaha ( for example) motorcycle from the state distributor who is housed in a different business in a distribution company that has several different businesses using his distribution Warehouse. The state distributor  doesn't have the part so orders it from the Australian distributor who doesn't have the part either. The Australian distributor orders it from the australian importer who orders it from the manufacturer direct.

Same scenario in the USA, the little bike shop needs the same part he orders from Yamaha US, if they don't have it order placed with Yamaha Japan. All those middle men in Australia and there percentages
are gone.
Part cheaper, customer possibly spending more in future with little bike shop. Opportunity for the little man to make some money and keep up with the big boy who can absorb the costs easier.

[leachy_9]

And most of those middle men with their hand in the Australian consumers wallet add no value and provide no service. But complain when the consumer finds he can buy the exact same product significantly cheaper, with better service elsewhere.

[Garfish]

That is why I am so critical of the governments, they have let this sector down soooooo badly.  And not just the blue bloods either. The "workers friend" is anything but that when it comes to

As an accountantant who has specialised in manufacturing this is x 2. 

Unfortunately with the fixed costs so high in most business's volumes is the answer, given the limited ability to reduce fixed costs. Eg, rent, web site, insurance, , and a small cost wary market where you are becoming more and more required to make to a price point ( think new KK pricing) I would believe (hope) they have research that enough People do value quality gear but the premium they are willing to pay is x%. Now how and what can we make without compromising our quality to achieve this. And what additional volume would this generate to absorb fixed costs and increase the profitability on the top end spec'd product .  The balancing act is to grow their share of total market with minimal cannibalisation of current sales.   Now to go and try and find a job in this market. ( why did I choose manufacturing)

[Garfish]

As an accountantant who has specialised in manufacturing this is x 2. 

Unfortunately with the fixed costs so high in most business's volumes is the answer, given the limited ability to reduce fixed costs. Eg, rent, web site, insurance, , and a small cost wary market where you are becoming more and more required to make to a price point ( think new KK pricing) I would believe (hope) they have research that enough People do value quality gear but the premium they are willing to pay is x%. Now how and what can we make without compromising our quality to achieve this. And what additional volume would this generate to absorb fixed costs and increase the profitability on the top end spec'd product .  The balancing act is to grow their share of total market with minimal cannibalisation of current sales.   Now go and try and find a job in manufacturing  . ( why did I choose manufacturing)

[Artie01]

This really has little relevance to the ARB debate, except, with my work I was taken on a tour of the industrial areas of Thailand last year, the Thai are amazing and have built these super industrial complexes where most of their heavy manufacturing takes place. Completely self contained, recycle and resupply their own water and some even generate their own power, incredible.

During our tour of one park, it was pretty much auto based (was Hemaraj now I think its the Eastern Seaboard Industrial Estate) it was amazing to see some of those good ole yankee Chevy trucks manufactured there, next to Honda, Toyota Mazda a few of the other obscure brands and (aussie) Ford (who we were actually there to see).

Imagine my surprise when we drove past the ARB factory....

A few of us looked at each other (in shock really).... and watched as a small bent over old lady swept the concrete out front of the factory with a hand made twig broom.... all 3 hectares of concrete... she was going to be busy for a while.... and you can be certain ARB weren't paying her much.... sort of explains some parts of their pricing structure.....

At the ford assembly plant (for the Focus model) we were discussing the cost of a Focus in Thailand vs the same car in Australia, the Ford rep said the vehicle cost is based purely on the economies ability to pay. The car cost over twice here in Oz as it could be bought for in Thailand and they still made a profit in Thailand... it seems we ARE being squeezed....

[dales133]

You don't manufacture in Asia for any other reason than to dramatically reduce production costs, particularly Labour at the cost of local jobs.
If you take jobs off shore and do it as covertly as possible to retain the public perception it's still an Australian made product....why should you be rewarded by getting away with australian made retail prices.

[koshari]

You don't manufacture in Asia for any other reason than to dramatically reduce production costs, particularly Labour at the cost of local jobs.
If you take jobs off shore and do it as covertly as possible to retain the public perception it's still an Australian made product....why should you be rewarded by getting away with australian made retail prices.

I recall blundstone were pretty deliberately quiet when they moved production offshore,

Odd how the pricing didn't change to reflect the savings by outsourcing production.

I do agree that the public are often prepared to pay a premium if they believe manufacturing is still being undertaken locally, i suspect much of this loyalty would evaporate if the same public were aware of the outsourcing.

To add to Arties observations I also have had the opportunity to see some of the production facilities in Cambodia (typical of other S/E asian regions) where they literally have dry dock/Special economic zones where whole industrial communities operate that are not subject to general taxation, duties, labour requirements. very hard to compete with these areas if any sovereign country wants to tax the multinationals a fair and equitable Taxation requirement.

[Artie01]

A well known Victorian suspension group once sent a worn out Dodge ball joint to a Chinese manufacturer and was asked could they make these? The manufacturer replied that yes they could and in a few weeks sent back 12 samples of the unit they were supplied, identical, even down to them being worn out..... no joke, I was distantly involved....

You have to be careful what you ask for... you might just get it....

We all know that these Asian countries can make crap. What we tend to forget though is that if you pay enough money, they can also make very high quality...... you gets what ya pays for....

[chester ver2.0]

You don't manufacture in Asia for any other reason than to dramatically reduce production costs, particularly Labour at the cost of local jobs.
If you take jobs off shore and do it as covertly as possible to retain the public perception it's still an Australian made product....why should you be rewarded by getting away with australian made retail prices.

Happy to keep the jobs in Australia as long as most Aussies take a reality pill and stop expecting to be paid insane wages for what is largley unskilled labour roles

[Footy Shorts Shane]

Happy to keep the jobs in Australia as long as most Aussies take a reality pill and stop expecting to be paid insane wages for what is largley unskilled labour roles

 

Nailed it!

[dales133]

Happy to keep the jobs in Australia as long as most Aussies take a reality pill and stop expecting to be paid insane wages for what is largley unskilled labour roles

Your dead right everyone expects much more than what a jobs worth be it contracting or wages but with the cost of everything in Australia it's a nesecity.
Like the old adage what came first the cost of living (egg) or the high expectations of income (chicken)