Tirerack.com why would buy anywhere else?

[John Deere]

We are getting screwed, we get screwed on everything (cars, tech gear, sports gear etc) ....I guess cos we are a small market.

[G-rig]

yeah i'm planning to get some F1 Asymmetrical's from tirerack in the next month or two, hopefully the dollar stays good or goes up. May order two at a time to make sure it gets under the customs radar, but people ordering 17" would be able to get 4 at a time no probs.

Not much incentive to get tyres locally, my last ones were $450 each!

[gareth_oau]

John, I'm hoping that as more and more people become internet-savvy, then local retailers will have to rethink their business/pricing or they are going to go bust

[Dub_Star_V6]

We are getting screwed, we get screwed on everything (cars, tech gear, sports gear etc) ....I guess cos we are a small market.

I must say, that is a fantastic saving you've made. Good show wot.

Although it does seems we get royally shafted here, and if it's not tyres it's suspension (or sporting or electrical goods). I went looking for some winter riding gear in the middle of a stifling Brisbane Summer in the hope of finding a few out-of-season specials. I was surprised to find the same items online for 1/3 of the price (including delivery) the local shops wanted. And local bike shops wonder why I buy less and less from them...

John, I'm hoping that as more and more people become internet-savvy, then local retailers will have to rethink their business/pricing or they are going to go bust

Good point Gareth, as regardless of what we pay here, the fitters admitting these tyres were cheaper than their AU cost price (!!) means Australian business models regarding importing and distribution really need big a re-think, as all they seem to do is force people to look elsewhere for value.

I know where I'll be buying my next set of 18"s...

[The_Hawk]

Although every case is going to be different I have some sympathy for Australian retailers it's always going to be a hard (and sad) balancing act.

On your average purchase of under $1,000 worth of gear your not paying customs duties, which your Australian supplier would be since they order in bulk. I will concede that they should be able to get a further 10% discount since they would most likely have a "dealer" account and order regularly. The big cost however comes in having to have ALL the different parts on a shelf waiting for a customer to walk in and want one as well as shipping costs.

To run some numbers, the last couple of orders I have done with GAP cost me an additional 21%+ just on shipping, lets be nice and give the Australian guy a 10% profit margin and your price looks something like this when you start with the 60% of the AUD price your paying:

60% * 1.21 * 1.10 = 79.86%

Now that's before you factor in warehousing or other overheads.

Don't get me wrong I'm not trying to justify high prices and yes there may very well be lotsof other factors... like I said every case will be a bit different, but you can quickly see how Australian prices can be higher.

[G-rig]

Now that's before you factor in warehousing or other overheads.

Don't get me wrong I'm not trying to justify high prices and yes there may very well be lotsof other factors... like I said every case will be a bit different, but you can quickly see how Australian prices can be higher.

and don't forget GST as well..

However the difference is a bit too much and it's not all just overheads. I believe a lot of stuff in Australia has too big a markup. Bike shops are pretty bad too compared to stuff from the UK even when you factor in the exchange rate.

[andyhui01]

I got my Pirelli Pzero Neros 225/45/17 from Tirerack for $700-800 Shipped... they were on clearance at about $100 each if I recall correctly. Huge bargain, would not be able to get any relatively decent tyres for $800 in Australia.

And in regards to Australian products having a huge markup. I work for an online retailer for Telescopes and the same product is sometimes 50-60% more than the US, this is due to the high cost of Shipping items to such a isolated country like Australia (Low import volumes = higher shipping cost per item), this is because Australia doesn't have the demand like the US or EU due to the Small population. Also, it costs a fair bit to get items through Customs and Quarantine and alot of Paperwork is involved which also means more cost.

And from personal experience, its not the retailers who have a huge markup, its the Distributors/Suppliers.

[Peter Jones]

There's a lot of factors at play with the cost of goods priatlely imported.

Avoiding customs duties is the obvious one.

What's not so obvious is the long traditional of mail order goods companies in the US, they've been doing sales by catlogs for 100's of years and they're very good at it!

Labour rates help too.

When I attend trade shows I hear a lot of importers whinging about internet competition but they don't do anything positive about it. What they tend to do is cut supply to any retailer suspected of parallel importing. What they need to be doing is working with government through trade associations to fix up the regulatory framework that makes life so difficult for all of us.

Mind you the model of having distributors/importers is part of the problem, they're another cost in the delivery chain themselves and tend to make better margins than the retailers.

Have you ever wondered why there are no large on-line VW part sellers in AU?

HSY, Imparts or Tooleys could easily set up such a system but choose not to to "protect the interests of their retailers". i.e. We won't sell on the internet if you guys (the retailers) don't buy on the internet.

Some people would see this as a sort of protectionism.

It frustrates me endlessly, I can't build a relationship with a retailer as I can't get away from work to go shopping and I don't know what's for sale without a lot of phonecalls and phonebacks which I don't have the time for either.

I'd much rather buy direct from the importer, even at retail prices, via an on-line, phone or mail ordering sytem.

I think there's a middle ground yet to be found. The importing industry in general is still living in the age of sailing ships and a competition free environment. The current model is not sustainable.

I think Tim and his DubAddiction site is one example of where the middle ground might lie. There's a real need to be served and the traditional models just aren't doing it.

That's my 2cents worth

Pete

[The_Hawk]

and don't forget GST as well..

However the difference is a bit too much and it's not all just overheads. I believe a lot of stuff in Australia has too big a markup. Bike shops are pretty bad too compared to stuff from the UK even when you factor in the exchange rate.

Agreed, some stuff is expensive for no good reason, in many cases I think historically prices were higher and while costs have come down some industries have chosen to maintain sale price and make a bigger profit, but to be fair business is about extracting the biggest profit you can while being competitive, if that margin continues to be too large people will seek alternatives.

In reality, however, most people don't know better, in the case of cars they pay someone else to do all the work so will never find out. Of the remainder that do work themselves, 25% probably get their parts from the dealers, 50% from Supercheap/Repco which doesn't leave a lot of market for a specialist parts supplier in Australia.

[G-rig]

I agree with all things said above, but still think retail stores could do a bit more to become competitive.

A good example is buying computer hardware from places like MSY and Umart - they are very cheap for those in the know and greater savings can be had by ordering online (but picking up at the store) which cuts down the retail sales time. You could just go to Harvey Norman and other places and pay a lot more. These shops are just as cheap as other online only shops and the system works.

Perhaps it's just that industry but after a while you get sick of paying top dollar for everything here and ends up costing you a fortune. Still good to support the local guys though (I bought my last wheels and tyres from Bob Jane) but the discounts don't seem good enough to be honest.

I realize it's often the supplier/wholesalers setting the price though.

Importers should also be getting better shipping/buy rate than the individual shipping/buying one thing as well.