UK to SA price difference

[murdock]

why are we getting so badly punished here in south africa?

why i ask...a fluke 1653B multifunction tester
south africa - R33000.00
UK - R8000.00

hilti GX 120 ME
south africa - R8000.00
UK - R3200.00

I purchased some equipment a while back and the amount of money i spent... i could have flown to the USA had a 2 week holiday purchased the equipment and returned and it wouldnt have cost what i paid for it here in south africa

the only reason i purchased it here was for the warranty and backup service...i am not gona mention the companies name but i can tell you now i will never make that mistake again.

something i dont understand if you buy for example a hilti product in china the warranty should be valid world wide at any hilti branch...next time i spend more than R10 000 on a product i will shop worldwide first.

[murdock]

and by the way those south african prices are after my discount excuding vat...UK prices advertised prices.

[adrianh]

Who quoted you on the Fluke in south Africa?

[murdock]

our local fluke agent.

[adrianh]

Interesting...RS Electronics is usually the most expensive - Judging by his prices your agent must be buying from RS, marking-up and reselling to you...

Have you tried Comtest or Measurement Group?

[murdock]

i see they have it for R27489.81 ex vat

that is still a R19000 difference in price...more like a 200% + markup...on a price sold in the UK already marked up...any way you look at this we geetting the short end of the stick.

someone mentioned that when products like this arrive in the country they dont mark it up a percentage they just mulitply it by a figue...some products are multipled by anywhere from 2 and up

now i know what i am doing wrong in my bussiness...buy equipment in south africa...causing my overheads to become unrealistic...i need to start importing...

i am considering importing second hand test equipment like companies do with imported engines and gearboxes...import hordes of second hand test equipment and flood the market at reasonable prices.

[adrianh]

This guy's in Cape Town.

http://www.e-test.com/

He has been doing it for years. He also rents the gear out. I needed a logic analyzer and simply got it from him for a month. I've dealt with him over the years and he's great.

South African prices - this is a very interesting topic. The local resellers need to learn a hard lesson and it is that the only way they can stay in business is by adding value. We can get onto the internet and buy anything from anywhere simply by using a credit card. It is said that we should support local industry but it is rather problemaic when you are paying through your nose. I bring most speciality things that I need in myself. Take your Fluke for example, if it were to break you could simply send it back to the UK, have it repaired and have it returned to you. I've brought in two printers from Japan and the one is going back for repairs.

The customerbase for high end testgear is very limited and I suppose that it is mostly large companies. The municipality doesn't mind paying R30K for the instrument if everybody quote the same. Of course the little guy like me and you are not willing to pay these prices.

There are so many examples of this pricing nonsense - cars, DVDs, movies, Apple computers (now there's a mafia - the distributor also owns all the retail stores), etc.

I refuse to pay the prices, they can keep the cars, my 10 year old car is fine, I haven't bought s DVD or been to a movie in years and they can keep the Apples. The days of distributors milking the public are gone - Viva credt cards, the internet & uncapped ADSL.

[IanF]

Here is one reason the UK economy is 864.5% larger in a much smaller country. Source wolfram alpha. I see this a lot in printing when I see what the US printers pay for colour print costs compared to what we pay, and a big part of this is SA is just small. My outlook is as long as my competitors pay the same then it will be fair. But it is never that simple.

[desA]

SA business has a captive market & wants megabucks with each sale. I have had quotes that are 3 times the SE Asian price.

If you have cash-in-hand, it could very well pay to purchase off-shore. It would pay for the plane flight. Just check the customs fee, if requested on arrival.

Too many comfortable cartels operating in SA.

[murdock]

i think a lot of people are still scared to pay someone for something they cant see or collect directly....when we can overcome this fear...these cartels we talk about will shut down and go under.

i give you an example hilti dont have a branch in durban any more it is just basicaly a big hilti sign with a few machines on show...but when you go try buy consumables or anything from them you cant buy off the shelf you have to order thru the rep...here the catch for every delivery you have to pay R80 freight charge no matter how small the package...so for me this doesnt pay...i would rather just go to builders express or somewhere like that and purchase fisher plug which work better than hilti plugs because you can remove them...for some unknow reason hilti plugs are easy to install but man try take it out...the screw head alway strips even if you you a phillips.

a friend of mine buys everything off shore...he said the only thing to be careful of is using south african postal service...chances are it will be stolen before it gets to you...not the supplier fault...so use a reliable frieight company and pay the little extra for peace of mind.

[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-mainmenu-125/fluke-news-mainmenu-171/260-fluke-assigns-south-african-copyright-to-comtest