Aussie Consumers Say No To High Game Prices

[bozodos]

still not totally sold on G2P, from what i've researched, they can be fairly inconsistent, and dare i say it suss.

might try and squeeze 20 bucks off from EA support a la OCAU BF3 thread

[TerminalWraith]

Ill stick with cdwow/eb/jb mix

[mad082]

There is no excuse the retailers can make which will stand up to the un-deniable fact that the rest of the world pays far less for their games than we do.

We can argue whether its the governments fault, the importers fault or the retailers fault but the fact remains, something big had better change and it had better change soon or the retail sector is going to fall over.

Either all the involved parties can get together and discuss how to steer their ship away from that big water fall, or they can hang onto their greed and ride that thing over the edge.

Either way the buyers will win in the end because if the retailers all go belly up, it will just open the market for online sellers to take their place.

Good riddance to retail i say.

so the fact that in a lot of cases the wholesale cost is higher than the retail cost in other countries is somehow the retailers fault and they should just suck it up and sell if with no mark-up?

generally the people who argue that aussie prices are too high have very little knowledge of the retail indusrty and are simply consumers who see the australian cost and an overseas cost that is lower and think that it is the retailer who is making all the money. sadly they couldn't be more wrong. firstly, yes the minimum wage does play a part in the end price of goods. sure it may only make up a small percentage of the retailers cost, but it also makes up part of the wholesalers cost as well as the freight cost. and since wages are also a contributing factor in things like energy costs, housing prices (and therefor rent of both residential and commercial) it becomes a very large part of the cost of items. secondly, australias population plays a big part in the retail price as wholesalers don't get as much of a bulk discount compared to countries with populations much bigger than ours. thirdly, the strength of the aussie dollar plays a much smaller part than people think in a lot of cases. plenty of overseas companies will raise the cost of goods when the aussie dollar gets stronger. forthly, many australian wholesalers have to pay large royalties to the overseas companies. fifthly, 100% markup or more doesn't just happen in australia. it happens everywhere. some industries more than others. some industries get away with much higher mark-up without people giving a shit. jewellery is one of these. i'm sure plenty of people here work for companies that run large markup but don't know it. the companies you work for are all part of the circle of high prices you are complaining about. the prices they charge may well be much higher than overseas companies. does that mean that we should all get stuff from the overseas version of your work so that in the long term you end up unemployed?

a prime example of all of this is apple products. the retailer generally makes something like 7 to 10% on them. the wholesaler is apple. so who is the bad guy, the retailer or apple? 90% of people will say the retailer because they don't have a clue how the world works. they are also the same people who will criticise a company because their goods are too expensive, but then also criticise the company for moving its operations offshore to cut costs to be able to lower the prices.

summary for the TL;DR folks, if you are going to blame someone, at least blame the right person.

[bozodos]

tl;dr version:

compete or die shitkunt retailers.

[Chappy]

so the fact that in a lot of cases the wholesale cost is higher than the retail cost in other countries is somehow the retailers fault and they should just suck it up and sell if with no mark-up?

generally the people who argue that aussie prices are too high have very little knowledge of the retail indusrty and are simply consumers who see the australian cost and an overseas cost that is lower and think that it is the retailer who is making all the money. sadly they couldn't be more wrong. firstly, yes the minimum wage does play a part in the end price of goods. sure it may only make up a small percentage of the retailers cost, but it also makes up part of the wholesalers cost as well as the freight cost. and since wages are also a contributing factor in things like energy costs, housing prices (and therefor rent of both residential and commercial) it becomes a very large part of the cost of items. secondly, australias population plays a big part in the retail price as wholesalers don't get as much of a bulk discount compared to countries with populations much bigger than ours. thirdly, the strength of the aussie dollar plays a much smaller part than people think in a lot of cases. plenty of overseas companies will raise the cost of goods when the aussie dollar gets stronger. forthly, many australian wholesalers have to pay large royalties to the overseas companies. fifthly, 100% markup or more doesn't just happen in australia. it happens everywhere. some industries more than others. some industries get away with much higher mark-up without people giving a shit. jewellery is one of these. i'm sure plenty of people here work for companies that run large markup but don't know it. the companies you work for are all part of the circle of high prices you are complaining about. the prices they charge may well be much higher than overseas companies. does that mean that we should all get stuff from the overseas version of your work so that in the long term you end up unemployed?

a prime example of all of this is apple products. the retailer generally makes something like 7 to 10% on them. the wholesaler is apple. so who is the bad guy, the retailer or apple? 90% of people will say the retailer because they don't have a clue how the world works. they are also the same people who will criticise a company because their goods are too expensive, but then also criticise the company for moving its operations offshore to cut costs to be able to lower the prices.

summary for the TL;DR folks, if you are going to blame someone, at least blame the right person.

It might help you to pay a little more attention before posting.

The line just below the part you made bold completely negates your entire point.

We can argue whether its the governments fault, the importers fault or the retailers fault but the fact remains, something big had better change and it had better change soon or the retail sector is going to fall over.

I know retailers are not the full picture and frankly i don't care, just like the consumer does not give 2 shits. If something is not done to fix this issue the entire chain is going to fall over, starting with retailers.

You may not see this as fair because the retailers will be the first to pay the price, and maybe it is not, but that won't stop it from happening.

The suppliers will get theirs once there are no retailers left to sell their over-priced products.

You can shift the blame, you can make excuses and it won't change a thing. If something big does not change with the retail industry in Australia, it is f**ked.

:edit:

As bad as it may be for retailers, i think Australia's retail industry needs a big crash, it seems like the only way to purge the country of the greedy suppliers and inefficient double handling that's going on, not to mention the shameless price gouging by people like Steam and iTunes.

These suppliers won't do anything until something happens to hurt them financially. Unfortunately for retail, they will suffer long before the suppliers do.

Edited September 1, 2011 by Chappy

[EeLeYe]

Digital media is what shits me. It doesn't require shipping or handling of any kind and there are no middle men involved. The cost of "bulk" orders is non existent in this case since there are no physical items.

Therefore the price should be no more than other countries. And since it is just digital, It should also quite easily adjust to the strong Aussie dollar.

Why are iTunes apps in the US $0.99 when here they are $1.19?? And don't get me started on the overpricing of downloadable music. No actual medium to manufacture and yet it costs the same to buy a cd.

As chappy mentioned, iTunes and steam are prime examples of this.

[oweban]

iTunes have revised their pricing lately; I picked up some apps this morning for $0.99. <--- http://www.macrumors.com/2011/07/13/apple-adjusts-international-app-store-prices/

As for Steam... that's another bag. The publishers force Valve into changing price so that their retail efforts/prices on both PC and console won't be horribly affected. Notice how Portal 2 is $30USD (was $50 originally) on Steam even for AU, but MW3 is $100USD? And Deus Ex HR is $70USD in the AU store? There's a $10 difference on the prices in the US store, but in retail stores in Australia, they'll be priced similarly.

[mad082]

It might help you to pay a little more attention before posting.

The line just below the part you made bold completely negates your entire point.

I know retailers are not the full picture and frankly i don't care, just like the consumer does not give 2 shits. If something is not done to fix this issue the entire chain is going to fall over, starting with retailers.

You may not see this as fair because the retailers will be the first to pay the price, and maybe it is not, but that won't stop it from happening.

The suppliers will get theirs once there are no retailers left to sell their over-priced products.

You can shift the blame, you can make excuses and it won't change a thing. If something big does not change with the retail industry in Australia, it is f**ked.

:edit:

As bad as it may be for retailers, i think Australia's retail industry needs a big crash, it seems like the only way to purge the country of the greedy suppliers and inefficient double handling that's going on, not to mention the shameless price gouging by people like Steam and iTunes.

These suppliers won't do anything until something happens to hurt them financially. Unfortunately for retail, they will suffer long before the suppliers do.

only way this will happen is the the rest of the economy goes down the toilet too. but as i said in my post, you can't have just the retailers drop their prices and not every other industry as well. you would also have to have a complete revolution of wages as well (large drops) in order for prices of goods to drop. and as i said, the problem extends further than simply retailers and suppliers. the manufacturers and parent companies are the ones who are really in control. the retailers and suppliers have to run the products at a margin that makes their business viable.

but you really do have to look at minimum wages and compare what things cost in comparison to that. both the UK and the US have minimum wages around half of that here. to explain this better, i'll put it simply. a person in australia on minimum wage could buy roughly the same amount of stuff with a weeks pay as someone on the minimum wage in the US or UK. actually, in most cases they could buy more.

example:

apple iphone 4 unlocked. here it costs $859aud. in the US it costs $649usd (prices taken off apple websites, and US prices are for phones not on contract)

so on minimum wage here it would take roughly 55 hours pay to buy one while in the US it would take roughly 80 hours work.

another example, since people were talking about apple apps being $0.99usd vs $1.19aud, someone on minimum wage in the US could buy between 7 and 8 (depending on state) while here you could buy 13. so even with the higher prices we are still better off.

[Madaz]

^^ that's a better comparison

[EeLeYe]

only way this will happen is the the rest of the economy goes down the toilet too. but as i said in my post, you can't have just the retailers drop their prices and not every other industry as well. you would also have to have a complete revolution of wages as well (large drops) in order for prices of goods to drop. and as i said, the problem extends further than simply retailers and suppliers. the manufacturers and parent companies are the ones who are really in control. the retailers and suppliers have to run the products at a margin that makes their business viable.

but you really do have to look at minimum wages and compare what things cost in comparison to that. both the UK and the US have minimum wages around half of that here. to explain this better, i'll put it simply. a person in australia on minimum wage could buy roughly the same amount of stuff with a weeks pay as someone on the minimum wage in the US or UK. actually, in most cases they could buy more.

example:

apple iphone 4 unlocked. here it costs $859aud. in the US it costs $649usd (prices taken off apple websites, and US prices are for phones not on contract)

so on minimum wage here it would take roughly 55 hours pay to buy one while in the US it would take roughly 80 hours work.

another example, since people were talking about apple apps being $0.99usd vs $1.19aud, someone on minimum wage in the US could buy between 7 and 8 (depending on state) while here you could buy 13. so even with the higher prices we are still better off.

You bring up a good point, but in the case of digital media, I still have to disagree.

The cost of goods should be irrespective of how much people earn. Apple shouldn't charge the prices they do because our minimum wage is higher than say, the US. Before they updated the cost of apps, they were capitalising/taking advantage of the strong Aussie dollar.

For example, an app now costs 0.99 USD and 0.99 AUD. With the current exchange rate (at time of this post) 1 AUD buys 1.066 USD. So now Apple are getting an extra 0.06 USD for every app an Aussie buys. Sure, it's miniscule but that's not the point. My point is, regardless of how much one earns, we are still being overcharged for something that requires no handling and no middlemen. Digital media pricing should not be so vastly different.

I don't use Steam, but I know their prices are just ridiculous.

On another note, how are Aussie exporters affected? Do they have to reduce their prices because our dollar is stronger and wages in other countries are lower? Everything here still costs the same so it means they'll lose in that sense; my understanding anyway.

[mad082]

You bring up a good point, but in the case of digital media, I still have to disagree.

The cost of goods should be irrespective of how much people earn. Apple shouldn't charge the prices they do because our minimum wage is higher than say, the US. Before they updated the cost of apps, they were capitalising/taking advantage of the strong Aussie dollar.

For example, an app now costs 0.99 USD and 0.99 AUD. With the current exchange rate (at time of this post) 1 AUD buys 1.066 USD. So now Apple are getting an extra 0.06 USD for every app an Aussie buys. Sure, it's miniscule but that's not the point. My point is, regardless of how much one earns, we are still being overcharged for something that requires no handling and no middlemen. Digital media pricing should not be so vastly different.

I don't use Steam, but I know their prices are just ridiculous.

On another note, how are Aussie exporters affected? Do they have to reduce their prices because our dollar is stronger and wages in other countries are lower? Everything here still costs the same so it means they'll lose in that sense; my understanding anyway.

that is assuming that they transfer the money the day the sale is made (since you are generally buying from the australian apple store). it also assumes that they have no fee for currency transfer. if they only transfer money to USD on a weekly or monthly basis then their actual gain will be less.

as for aussie exporters, they either have to reduce their prices or suffer loss of sales (and it is generally the latter). it isn't really much different to here where cheap imports are taking over (mainly food, but many other things as well).

and yes i get your point about digital media. in the case of music i think it is a little bit more complicated as you have different licencing rights, etc, in different countries. plus you have local music, not just international music, so you do have some aspect of different minimum wages in that.

[oweban]

Well having said that, I bought that 0.99 app on iTunes, and now there's a $3.90-odd pending payment on my netbank... Will be questioning that very hard.

[Chappy]

only way this will happen is the the rest of the economy goes down the toilet too. but as i said in my post, you can't have just the retailers drop their prices and not every other industry as well. you would also have to have a complete revolution of wages as well (large drops) in order for prices of goods to drop. and as i said, the problem extends further than simply retailers and suppliers. the manufacturers and parent companies are the ones who are really in control. the retailers and suppliers have to run the products at a margin that makes their business viable.

but you really do have to look at minimum wages and compare what things cost in comparison to that. both the UK and the US have minimum wages around half of that here. to explain this better, i'll put it simply. a person in australia on minimum wage could buy roughly the same amount of stuff with a weeks pay as someone on the minimum wage in the US or UK. actually, in most cases they could buy more.

example:

apple iphone 4 unlocked. here it costs $859aud. in the US it costs $649usd (prices taken off apple websites, and US prices are for phones not on contract)

so on minimum wage here it would take roughly 55 hours pay to buy one while in the US it would take roughly 80 hours work.

another example, since people were talking about apple apps being $0.99usd vs $1.19aud, someone on minimum wage in the US could buy between 7 and 8 (depending on state) while here you could buy 13. so even with the higher prices we are still better off.

Regardless of the minimum wage, consumers are already buying from cheaper sources because of the stupid retail prices in Australia. As more and more customers ditch retailers, more retailers will go belly up. Soon suppliers will have no retailers to move their goods so down they go too.

My prediction does not require any kind of revolutionary change to take place.

Also, you cannot tell me that suppliers don't have any room to move with their prices, we have Australian made products selling in the USA for LESS than they sell them here, and they were made in Australia.

Products that are bought from overseas for cheap, shipped here in bulk then sold in retail stores should be a buttload more competetive.

Edited September 4, 2011 by Chappy

[Nee-san]

Regardless of the minimum wage, consumers are already buying from cheaper sources because of the stupid retail prices in Australia. As more and more customers ditch retailers, more retailers will go belly up. Soon suppliers will have no retailers to move their goods so down they go too.

My prediction does not require any kind of revolutionary change to take place.

Also, you cannot tell me that suppliers don't have any room to move with their prices, we have Australian made products selling in the USA for LESS than they sell them here, and they were made in Australia.

Products that are bought from overseas for cheap, shipped here in bulk then sold in retail stores should be a buttload more competetive.

Surely that one is hard to explain away.

[mad082]

Regardless of the minimum wage, consumers are already buying from cheaper sources because of the stupid retail prices in Australia. As more and more customers ditch retailers, more retailers will go belly up. Soon suppliers will have no retailers to move their goods so down they go too.

My prediction does not require any kind of revolutionary change to take place.

Also, you cannot tell me that suppliers don't have any room to move with their prices, we have Australian made products selling in the USA for LESS than they sell them here, and they were made in Australia.

Products that are bought from overseas for cheap, shipped here in bulk then sold in retail stores should be a buttload more competetive.

yes it does, the amount of retaillers who would need to go belly up to force a change would be a rather large and the consquences of this would stretch much further than the retail sector. it would require a complete collapse of the australian economy (don't under estimate how much industry is reliant on the retail sector).

Surely that one is hard to explain away.

not really. there are a few factors in it. first of all is that a lot of the time they are buying larger bulk amounts so can often negotiate better prices. secondly, all the other goods overseas will sell for less so they have to accept that they have to sell them for less profit to be competitive in the market. this generally is in the hands of the manufacturer, not the supplier, as the manufacturer (in the case where they are not the same company) will see that in the australian marketplace they can get more for their product so why should they sell it dirt cheap? and at the end of the day they are a business, not a charity, and i can garantee you 1000% that in the same situation everyone here would do the same thing, and every business that people work for are doing the exact same thing as well. try going to work tomorrow and telling your boss that you've had a brilliant idea. they should halve their profit margin in order to be cheaper than everyone else and see what they say. i'm guessing that they will call you stupid.

[Chappy]

as the manufacturer (in the case where they are not the same company) will see that in the australian marketplace they can get more for their product so why should they sell it dirt cheap? and at the end of the day they are a business, not a charity, and i can garantee you 1000% that in the same situation everyone here would do the same thing, and every business that people work for are doing the exact same thing as well.

You said it yourself, they base their prices on what they can get away with in Australia, not what they can afford.

This is why nobody cares when the retail sector whines that it is losing profit.

These companies have taken the protectionist nature of our government and abused it to their own advantage, screwing the Australian consumer.

In the past they could get away with this because there was no internet shopping.

The world has changed now, and their greedy business model does not fit this new world.

They can either change to adapt to this new environment, or go under with the rest of the retailers who failed to adapt.

Why the hell should we care?

And as for your theory on economic collapse.

Have you been to a Westfields lately and seen how many vacant stores there are?

I really cannot see our economy falling apart just because a few thousand people lose their low paying jobs and nobody can get products from a retailer any more.

Retailers are only losing out on imported items, and that's because we are now buying them online. If retailers stopped selling these items all together it would just mean more people will buy online.

Edited September 6, 2011 by Chappy

[mad082]

You said it yourself, they base their prices on what they can get away with in Australia, not what they can afford.

This is why nobody cares when the retail sector whines that it is losing profit.

These companies have taken the protectionist nature of our government and abused it to their own advantage, screwing the Australian consumer.

In the past they could get away with this because there was no internet shopping.

The world has changed now, and their greedy business model does not fit this new world.

They can either change to adapt to this new environment, or go under with the rest of the retailers who failed to adapt.

Why the hell should we care?

And as for your theory on economic collapse.

Have you been to a Westfields lately and seen how many vacant stores there are?

I really cannot see our economy falling apart just because a few thousand people lose their low paying jobs and nobody can get products from a retailer any more.

Retailers are only losing out on imported items, and that's because we are now buying them online. If retailers stopped selling these items all together it would just mean more people will buy online.

ok, a few points. firstly, when i said "they run off what they can get away with, not what they can afford" i was refering to the manufacturers.

you say "greedy business model". you obviously have no idea about running a business, and if you went into it with your current ideals you would be behind in the bills after 1 month, i can garantee you that. every industry in australia is running off the "what you can get, not what you can afford" mentality, not just retail. i'd actually say that the retail sector is one of the lowest of this. generally the industries where you are paying for labour only are the worst. they will usually work off at least 200% mark up, but it can be 300 or 400% mark up. my sister in law works in the building industry and has had $30,000 worth of pay rises in the past 12 months. surely you can't say that they are running on thin profit margins.

most people who haven't worked in upper level retail (where they actually get to see costing figures) have pretty much no idea just how much money it takes to run a business. to put it into perspective, the business i used to own, which was in a small town, in a small shop had a basic running cost of around $80,000 a year before wages were taken into consideration. based off the profit margin we ran at (which was running things at RRP) we had to make nearly $300,000 a years in sales before i would see a cent in wages. had i had my business running from a shop in a shopping centre here, for a similar sized shop i would've been paying nearly 4 times as much rent and would've needed to have roughly doubled my sales. rents in shopping centres are insanely high. this is partly because coles and woolworths generally don't pay rent so all the other shops make up for it. in the bigger centres a little sunglasses kiosk may be paying 50k a year for that tiny little area (plus a % of sales on top of that in a lot of cases). a standard width shop will often be up around $200,000 a year in rent.

and reducing prices isn't as simple as it seems. in my industry, a 20% discount requires a double in sales to make the same amount of profit. so as i said with my business, if i was to have run my business with prices 20% lower than RRP i would've need to have sold around $600,000 worth of goods to meet basic running costs. or to take a basic retail wage i would've needed to have sold $800,000 a year worth of goods, and as i said, this is for a small shop in a small town with only one employee (me). if i employed someone else as well then it would go up to 1 million dollars worth of sales at the discounted rate.

as for the amount of empty shops, you will find that the majority of that is because there is a new shopping centre opened up in a nearby area, so it's more a relocation of shops rather than the old ones simply closing down. and don't think it is just a few thousand people losing their jobs. it flows on much further than that. firstly the freight companies have to start laying off staff. the commercial building industry will also suffer. accounts will lose clients, cleaning companies will lose clients, less people will have money to pay mechanics to work on their car, less people will be able to renovate their houses and the list goes on. the retail sector employs over 10% of the australian workforce. so if the retail sector was to halve, unemployment in australia would pretty much double.

[Chappy]

I know the retailers are not the root of the problem, i never said they were.

And your experience with the cost of running a retail business is not the be-all and end-all of retail, just look at places like PC Case Gear and ARC.com.au and you will see that they can afford to sell at prices which are very close to the USA.

I have always maintained that in order to fix the problem we have with retail here, the suppliers need to be hurt enough financially to force them to drop their stupid mark ups.

Again, you can provide all the reasoning you want, but it can't change the facts.

Australian suppliers currently purchase their goods from suppliers overseas at wholesale prices, they then ship them over here in bulk.

I can buy the same product from overseas at RETAIL price and ship it over here on its own, and it is still cheaper.

There is no excuse for this.

I don't claim to be an expert on how the retail chain is set up here in Australia, but i know enough to see that there is something wrong with that picture.

We can blame the government and its tax system.

We can blame suppliers and their mark ups.

We can blame retailers.

Frankly i don't care who is blamed.

Until the issue is resolved, more Australians will buy their goods over the internet.

Now if you say this is not enough to force a change in the market then i guess they will continue on their ways while more and more Australians move their shopping overseas.

Maybe the retailers here will be able to sell their goods to magic pixies and imaginary friends? Who knows.

One thing i do know is, Australian consumers are being taken for a ride by somebody and they are fed up with it.

Now that retailers are crying foul, Australians dont give a shit.

It's just that simple.

Edited September 6, 2011 by Chappy

[mad082]

my main point is that it isn't just the retailers and suppliers who are to blame. as i said in an earlier post, the suppliers have their hands tied to a certain extent as well. in a lot of cases they are paying royalties to the overseas parent companies. also in a lot of cases, when the US dollar gets weaker the manufacturers in asia put their prices up a bit. and as i've also said previously, the population of australia doesn't help the situation as well. having a population of less than 10% of america's population certainly doesn't help get extreme bulk discounts.

[Chappy]

The lower population in Australia might have a small effect on prices, but nowhere near the 50% to 200% increase in prices that you see here.

Anything more than 20% and they are pulling our leg.

The royalties might even be a factor in some small cases, but still a drop in the ocean.

We can both agree that the suppliers are the main problem here.

In that case the retailers association should be going after them instead of campaigning to make the government force the consumer to pay more just for the sake of it.

Of course the retailers are not going to do the 'right' thing because they would not want to risk the suppliers cutting them off.

Again the retailers are looking out for only themselves, so why shouldn't consumers do the same?

At the end of the day, Australians don't care that the retailers are crying wolf. And if your professional opinion is to be trusted, we have no reason to be worried. You said yourself it would take a lot to kill off the retailers in Australia.

So we can all go on buying our products at bargain prices from overseas and ignoring Mr Gerry Harvey crying over the fact that he can no longer charge ridiculous prices because nobody is willing to pay them.

:edit:

And my Westfields example was not the result of a new shopping center opening down the road. I was referring to Westfields Liverpool where on the 1st of July about 25% of the stores there closed (entire sections of the place are just a sea of wooden walls).

There is no new shopping mall anywhere near Liverpool, it was partially due to Westfields yearly rent rise and partly due to the fact that the lack of sales meant that a large number of stores there would struggle to pay it.

Edited September 7, 2011 by Chappy