UK to SA price difference

[Dave A]

Low volume, capital tied up, forex red tape, no competition... it all adds up to a royal screwing. And to some extent it creates a vicious circle - in this instance Fluke loses sales as a result which reduces volumes (and the need to mark-up) even further.

It used to be like this with computers. I bought my first laptop on a trip to the USA and the saving covered the trip. Doesn't apply anymore though. Competition and volume took care of the gap.

Same with sound equipment -we probably all owe Hifi Corporation a big thanks for knocking that lot right.

But it's not just a problem in SA. I saw a great CRM plug-in for Quickbooks while at a convention in the USA and the price seemed reasonable. The only problem was USA works with GST and we work with VAT, so I would have to buy a UK (VAT friendly) version. It's 3 times the price of the USA (GST) version.

Economics rule and sometimes that opens up these price differentials for perfectly legitimate reasons. But it also means if someone gets too greedy on their mark-ups it opens the gap for more efficient operators.

To some extent that's why the PIIGS are in so much sh*t and China's star is on the rise. If we keep undermining market efficiency we'll probably head the same way eventually.

[BusFact]

I'm not familiar with the products mainly referred to above, but I have a situation as follows:

There is a small and occasional requirement for one of my products. It comes in a wide range of about 20 colours. Each enquiry would want 5 or 6 of these colours, but never the same ones. Also different sizes are needed which I can cut.

So I import the product in bulk size in 20 colours and have these available to cut bits off for customers as and when they need them.

That ties up several tens of thousands of Rands in a very slow moving stock item. Material can stay in my stores for 3+ years before being finally used. They also take up space to store.

To make this product viable for me I just have to mark it up considerably. Cutting prices would not help volumes because there is not much of a market out there anyway.

Point being, for some products there is a reason for the seemingly high prices. In order to have the stock ready in a few hours as opposed to several days or weeks by airfreight (not to mention the high costs on small packages).

Just another point of view.

[desA]

^ Have you read the Benneton story?

Base garment no colour. Add colours as required later. Great for stock-holding.

[AndyD]

I always purchase test equipment overseas (UK or USA) unless it's basic bread and butter items. Even including shipping by DHL or similar it invariably works out less than half price. It helps if you have a trusted friend or family their to help with the purchase.

With many makes of equipment their agencies in SA are contractually bound to supply service, calibrate and warranty should it be necessary even though it wasn't purchased here. They sometimes object but I just get an email from their overseas offices outlining their responsibilities and that's always been sufficient.

[adrianh]

Read this lot - Comtest doesn't much like competition...

http://www.comtest.co.za/news-mainme...ght-to-comtest

[AndyD]

It looks like that's aimed at stopping people importing and selling the goods on to an end user. I haven't imported Fluke, most of my test equipment is Megger, Laplace and Druck.

At the risk of starting an argument I prefer Megger to Fluke.

[murdock]

reading that article explains why you have to hold your ankles every time you purchase fluke equipment...

and it explains why they are putting such a huge mark up on the product...because they can

i personal wont buy anymore fluke products in south africa especially not the more expensive ones...it would pay me to take a holiday rather.

fluke and megger are in the same office in durban.

[murdock]

i dont understand how this whole pricing structure works...surely the goverment should look after the consumer in this country or is that what the problem boils down to again like the telephone sager...where the goverment is actually the problem and not the telephone companies because of their cut they get.

or am ai missing the boat here...i cant understand how a product purchased from fluke in the UK would be regarded as a grey market product and why they are not allowed to sell you fluke equipment here in south africa...what am i missing how does comtest justify a 200% markup.

surely if fluke comes directly from the fluke factory we should be able to offer the same pricing structure as the UK...taking into account that the price we are talking about is not cost but sale price...imagine what fluke UK pay for the equipment.

this type of behavior should be illegal...or does the goverment support this?

[Pap_sak]

i dont understand how this whole pricing structure works...surely the goverment should look after the consumer in this country or is that what the problem boils down to again like the telephone sager...where the goverment is actually the problem and not the telephone companies because of their cut they get.

or am ai missing the boat here...i cant understand how a product purchased from fluke in the UK would be regarded as a grey market product and why they are not allowed to sell you fluke equipment here in south africa...what am i missing how does comtest justify a 200% markup.

surely if fluke comes directly from the fluke factory we should be able to offer the same pricing structure as the UK...taking into account that the price we are talking about is not cost but sale price...imagine what fluke UK pay for the equipment.

this type of behavior should be illegal...or does the goverment support this?

If you think you can do it better, go for it

Sounds like it could be a business, but do have the balls???

Are you willing to chuck that money at it...?

[adrianh]

Murdock, you must remember that they, just like us, run a business to make money. We all price our products as high as the market is willing to pay. 80% of people that approch me are willing to pay my prices, 10% ask why the prices are so low and 10% complain because they feell the prices are too high. I am quite happy to serve the 90% of the market who are willing to pay the prices. My view as a supplier is that I will not change my pricing structure to suit 10% of the market.

If the market was unwilling to tolerate Fluke pricing then they wouldn't buy the products locally. You and I fit into the unhappy 10%. We have a choice, either get the product from the UK or buy something else.

I am not defending Fluke SA as such, but I do understand why they set their prices as they do.