February 1, 2010: One of the regular observations in stories, readers comments and even editorials relating to the ‘Retail Coalition’ campaign for GST on private imports, is that Australian retail pricing is inflated by more than the 10 percent represented by the GST.
The conclusion by most is that Australian retailers are ripping off the Australian public. (‘Doing it for years, ref!’) In very few of these stories is there any acknowledgment that there are local camera distributors in the chain between the camera factory and the retailers. Or that local camera distributors actually set local RRPs! It’s as if these pundits assume old Gerry or one of his minions calls the Canon factory and says, ‘Hey, sport, chuck us another container load of those Powershots, will ya? We’ve just about flogged the last lot.’
Below, we’ve compared the RRPs of a selection of top cameras, software and a couple of printers against the US MSRP (‘manufacturers suggested retail price’). While street prices are lower in both markets, the suppliers’ suggested prices provide a reasonable like-with-like comparison. We also compared Australian pricing against UK pricing, and while the price differential wasn’t as great, in almost all cases the British consumer is getting a better deal – even after a 20 percent VAT is added!
The results below are quite revealing. For the most part, Australian prices are on average 25 – 30 percent higher than US prices, with some fairly appalling exceptions. It’s difficult to understand how Adobe, for instance, can justify a premium of over 60 percent on its CS5 professional software suite! Surely they can’t blame shipping costs, and there’s not even any physical product to warehouse and ship if you buy it as a download.
The prices here also incorporate the 10 percent Australian GST, while the US prices are tax-free, which reduces the differential somewhat.
Based on the figures below, the stand-out performer when it comes to providing Australian retailers and consumers with value closer to their US counterparts is CR Kennedy with its Pentax range. Here’s a comparison which should make the marketing folk at Sony wince: the Pentax Kr with an 18 – 55mm kit lens is $US849 in the US, while the Sony A55 with kits lens is also $US849. But in Australia, the same Pentax kit is $A899, while the Sony A55 kit (on the Sony Style website) has a local asking price of $1299! How does that work? Dollar for dollar, it It would appear that Pentax represents great consumer value in the Australian market – and probably doesn’t have much of a grey market issue as a consequence.
Ricoh, from Tasco Sales, is another brand which keeps itself fairly nice when Australian and US pricing is compared. Interestingly, both these brands are distributed by third-party businesses which are not owned by the manufacturing parent company, but have to turn a profit in Australia to survive.
Putting this list together was not rocket surgery (although it tended to give the compiler a mild headache). Some of the local RRPs are inordinately hard to track down, so there may be the odd out-of-date price here and there, but the big picture is pretty clear. While it was once quite feasible, and even made sound business sense, to maintain wide price differentials in different countries, the internet has changed all that.
The price differential between the High Street price here and the Main Street price over there needs to be narrowed.
And quite a few readers of Photo Counter would probably add that for some brands at least, the wholesale price differential between the biggest players in Australian retailing and the smaller mum-and-dad operations shouldn’t, and needn’t, be the yawning chasm it is currently. We used to call it a ‘fair go’.
CS5 Design Standard: US – $1300/$A1306.84; Aust – $2172
Photoshop CS5: US – $700/$A703; Aust – $1170
Photoshop Elements 9: US – $80/$A81; Aust – $104
Office Home & Student 2010: US – $150/$A151; Aust – $200
Windows 7 Home/Family Pack: US – $120/$A121; Aust – $250
HV40 camcorder: US – $1000/$A1006; Aust – $1500
PowerShot G12: US – $500/$A503; Aust – $800
EOS 1000D with 18-55mm IS: US: $550/$A553; Aust – $950
EOS 7D (body only):US – $1700/$A1709; Aust – $2400
Coolpix P7000: US:$500/$A503; Aust – $700
D3100, 18-55mm non-IS lens: US: $700/$A704; Aust – $950
D7000 (body only): US – $1200/$A1207; Aust – $2000
Mju Tough 8010: US – $379.99/$A382.28; Aust – $499
PEN E-PL1with 14-42mm lens: US – $499.99/$A503.01; Aust – $799
E-5 (body only): US – $1699/$A1709.26; Aust – $2199
TZ10: US: $350/$A352; Aust – $600
GH2 with 14-140mm lens: US – $1750/$A1760 (not bundled); Aust – $2300
Kx with DA18 – 55mm: US – $650/$A655; Aust: $700
Kr with DA 18 – 55mm: US – $850/$A855; Aust – $900
Optio RZ10: US – $219/$A223; Aust – $249
CX5: US $400/$405; Aust: $500
GXR (body only) US$511/A$516; Aust – $599
HX5V: US – $300/$A302; Aust:$430
NEX-5 with 18-55mm lens: US – $700/$A704; Aust – $1000
A55 with 18-55mm lens: US – $850/$A855.12; Aust – $1299
Stylus Photo 1410: US – $219/$A220; Aust – $699
Stylus Photo R2880: US – $800/$A604; Aust – $1500
Officejet Pro 8000 printer: US – $150/$A151; Aust: $249
Compaq Presario CQ series netbook (entry level): US – $380/$A382; Aust – $699
Posted By toban02/08/2011 11:59:42 AM
Why don`t we demand a discount when we order a sandwich ? What if we could import that sandwich for half the price? I had a customer come to my store and around his neck was a lanyard from Digital Rev (eBay store) asking me to sponsor his up coming exhibition! I also have the universities and other institutions asking for all this support. Those that support me I support back. My profit on a camera sometimes comes to me in rebate 6 month later in some cases, so where is this massive profit? Western society has almost stopped or given up manufacturing for importing what do we make from local products. What happens when China wakes up and starts to demand a higher price? The world has changed its habits and we also have to keep up as retailers, but just think of all those people who won`t be able to go out and shop in stores for `therapy` – they will just sit at home perhaps driving their partners crazy.
Posted By LANGA02/07/2011 03:31:03 PM
No real suprises here. The consumers think all retailers are loaded and have race horses and wild life sanctuaries as the norm. I have always put the price differential down to small economy in a big country, at least in part. Adobe totally blow that theory out of the water with the price difference for their downloadable software. I recently tested the price differences and couldn`t believe that a program coming from the same place could vary so much.
Posted By Michael 02/07/2011 03:12:23 PM
I have just returned from a trip to Germany, while I was there I stopped into a few camera speciality stores along with a chain called Saturn. Saturn I would consider to be larger and more wide spread then HN. Having locations it seemed in every shopping centre and on every other main shopping street. Providing all there was to offer. What I found interesting was from the small independent to the very large Saturn stores there was no pricing difference, and when it came to discounts, free gifts, free memory cards, bags or anything else, the answer was always `no sorry, the price is the price and there is nothing we can do for you` While the service in the Saturn stores was indeed much the same as HN, and a better the expected service in some of the small stores, there was absolutely no bargaining on the price of items. Nor did I find the price difference between Germany and Australia to be that much it any on some items. The experience left me wondering where did we go wrong Australia, as a retailer sometime`s I wonder why I put or do up retail prices at all. As it seems these days that my customers are all chasing a discount of something for free. Maybe it is time that someone did take a look at the likes of Canon, Nikon and Fuji and ask them what sort of margins they are working on, and just how many different price lists they have for the different customers groups they deal with. I for one get my Canon price list marked as Photo Plus price list, not Canon Australia. Make you wonder, well makes me wonder anyway.