On Markets and Pricing

Joe writes an interesting post about the New Zealand Skate Market. The advent of the Global Intertron has opened many eyes to the fact that we in the smaller more remote countries have been being royally screwed by suppliers and middlemen for years.

The phenomenon he describes is not exclusive to skating. Radio Control has the exact same situation (although the history is different: it has always been ‘fringe’). I can get a 9-channel Futaba transmitter landed for maybe NZ$600, but the shops will charge ~NZ$1000.

The standard debate is that you should buy local to get warranty support and so that you keep the shop and the helpful experts afloat. This is only the case in my opinion if the shop is worth it. I regularly will buy small parts directly from Airsail in Auckland, and through WattsUp‘s web store, despite the fact I know can get them cheaper elsewhere, because the guys at these shops are extremely knowledgeable and helpful. I think of it as paying them a few bucks a month for the great advice etc.

Larger items and things I can only get from the crappy hobby stores (with drones instead of experts behind the counter), I will import, with nary a thought for the poor buggers that lose out. Harsh, but I’m not about to throw good money at a store that doesn’t deserve to exist. I would expect the same if I were a retailer, and it is one of the key reasons that I have to slap myself when I think how easy it would be to open a computer store and ‘be my own boss’: the service would have to be out of this world to support the prices I would want to charge to support my lifestyle. I could do it, but it would be damn hard work.

The skating analogy? Buy skate wheels and bearings locally if you like the shop and find their advice useful, otherwise stuff ’em if they’re routing you on price and not using the markup to supply useful service.

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  1. You’re right Ben. The phenomenon probably applies to anything that doesn’t come in to NZ in enough volume and frequency to be container shipped. I’d rather spend my money in NZ and will pay a premium for good service and expertise. I’m probably similar to you: I’ll get the ‘big stuff’ from overseas when the savings are significant. I don’t mind so much paying double what they pay in USA, NZ$20 for an item that costs US$9 retail; it’s relatively small change. Savings of 20-30% on items over $100 are significant and for them I’m prepared to shop overseas and wait for delivery. Specilist books are the same: my university texts can be about US$80 (landed) from Amazon, or NZ$180 from student bookshops.

  2. It’s been a while since someone brought this up, even though it’s been happening forever, and if it takes the intertron to open some eyes, then good. When I worked in retail bike shops in Auckland, back in the day (let’s say early the 90’s), I could actually get parts BY MAIL from the US, pay full retail, and land them for 20% less than my STAFF DISCOUNT ON WHOLESALE from the local importer / distributor… Crazy stuff. We didn’t order the stuff often because return policies were horrendous. You can STILL get the same deal, but now at least you can (mostly) track what’s going on and get up-to-date ratings on sellers and all. But it’s a bit crazy when you can compare prices in seconds on, say, G4 Powerbooks – try checking Singapore vs San Francisco vs Auckland Apple Store Online – and see a USD200 difference, when shipping will NEVER account for that. Rise up!

  3. Yeah, buyer beware I guess.

    It’s the difference between getting a good deal overseas and having little or no recourse if the goods turn out to be faulty/misrepresented when they arrive. Not to mention the potential warranty hassles.

    Or paying a premium for local goods but having a chain / store owner that can honour your warranty or that you can vociferously berate/take to small claims court if something goes wrong.

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