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Australian price - why some brands are more expensive then others


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Does anybody else compare the overseas prices for amps etc and compare them to Australian prices before purchasing.  I am not talking about the relative price of OS to here as prices are higher due to exchange rates.  Some brands that are cheaper overseas compared to other, however are more expensive in Australia compared to the other brand.  Some brands such as ROTEl for example, offer an Australian retail price that is pretty close to the exchange rate, where others such as Parasound, Hegel and Music Fidelity have an Australian retail price that is near double the US retail price.
for example, a Hegel 390 is about 15% cheaper then the Michi x5 in the us and OK, but 18% more expensive in Australia.  The Music Fidelity M8xi is about 7% cheaper overseas compared to the MICHI however about about 30% more expensive then the X5 in Australia.  That is $3500 more expensive in Australia when it is a cheaper amp in the UK and in the US.

this makes it pretty difficult to determine the real value of an amplifier, and even blurs the lines between what is seen as mid or high end audio
 

Edited by JkSpinner
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I'm not sure why so many people leech onto the US pricing as a reference - most prices dont include sales tax and we're talking about a population of 300 million. Better to compare European price

I’ve always held views on this too and totally get the changing economic environment, countries, manufacturer arrangements as been on the other side if the fence with this sort of stuff.   M

Beyond all the above discussion which are factors, prices are generally set based on how much people are prepared to pay in that market. What power does the brand command in that market?   

There is a related thread recently...

** and this

 

Edited by Snoopy8
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@JkSpinner The prices have too many variables to compare. Some manufacturers will try to help Aussie distributors stay close to parity through discounts etc, some will not. Some brands will offer volume discounts to large markets like the UK & US, some will not...

 

giphy.gif

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  • JkSpinner changed the title to Australian price - why some brands are more expensive then others
1 hour ago, Snoopy8 said:

There is a related thread recently...

** and this

 

I changed the tittle and wording of the thread to be more representative of what I was really asking.  The question was not about buying from O/S of the higher price we pay in Australia, it was more about the relative differences in Australian pricing compared to OS pricing

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I'm not sure why so many people leech onto the US pricing as a reference - most prices dont include sales tax and we're talking about a population of 300 million.

Better to compare European prices - a Hegel H390 in the UK is 5,000 pounds and 6,000 Euros.

Edited by Hydrology
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Hi

even then if we use the UK as a comparison then there’s still a big mismatch with some manufacturers 

ie whatfedale 

Really keen on the Elysian 

in the Uk there 6,500 pounds converted to $11,700 approx 

and retail here at $15,500 

I understand a smaller population here import tax and duty buts that’s a fair difference 

sean 

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Its the Australia TAX, been happening for years on all goods.

 

regards Bruce

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A smaller market to service will always result in some price increases. Importers and retailers also require a buffer as consumers aren't generally accepting of fluctuating pricing based on FX day to day. Also keep in mind that RRP is not fixed, there is negotiation margin in there generally. 

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32 minutes ago, Sean Perth said:

Hi

even then if we use the UK as a comparison then there’s still a big mismatch with some manufacturers 

ie whatfedale 

Really keen on the Elysian 

in the Uk there 6,500 pounds converted to $11,700 approx 

and retail here at $15,500 

I understand a smaller population here import tax and duty buts that’s a fair difference 

sean 

 

Wharfedale are their own distributors in the UK, so with no "meat in the sandwich" wholesaler profit to worry about the price is naturally cheaper.

 

Edited by Hydrology
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1 hour ago, JkSpinner said:

I changed the tittle and wording of the thread to be more representative of what I was really asking.  The question was not about buying from O/S of the higher price we pay in Australia, it was more about the relative differences in Australian pricing compared to OS pricing

Always a good idea to have the thread title right.

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1 hour ago, JkSpinner said:

I changed the tittle and wording of the thread to be more representative of what I was really asking.  The question was not about buying from O/S of the higher price we pay in Australia, it was more about the relative differences in Australian pricing compared to OS pricing

So what there is a price difference? It then becomes a rant thread...

 

54 minutes ago, Sean Perth said:

Hi

even then if we use the UK as a comparison then there’s still a big mismatch with some manufacturers 

ie whatfedale 

Really keen on the Elysian 

in the Uk there 6,500 pounds converted to $11,700 approx 

and retail here at $15,500 

I understand a smaller population here import tax and duty buts that’s a fair difference 

sean 

Once you factor in at least 25% for the import duty, custom charges, clearance fees, GST etc. , difference is minimal.  Plus, no warranty, no local support, likely no local spares for repairs.

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32 minutes ago, Snoopy8 said:

So what there is a price difference? It then becomes a rant thread...

 

Once you factor in at least 25% for the import duty, custom charges, clearance fees, GST etc. , difference is minimal.  Plus, no warranty, no local support, likely no local spares for repairs.

Exactly.

In round figures, if you add 25% to $12K,it works out at $15K, which is the local RRP. With a small degree of negotiating it could actually be less expensive to buy them here from Mark and the good people @Frank Prowse Hi-Fi

 

Not only that, if the OP buys local to him (Perth) you can audition first, which is really important at this price level, plus all the things that @Snoopy8 mentioned .

 

I know where my money would be going.

Edited by rantan
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As someone who is dabbling in a bit of distribution myself, let me tell you, it is very very hard to make money when you factor in ALL the costs to get the product to market in Australia. Certainly if I wasn't passionate about the brand I will be representing as well as the love of the industry I'm in, it would almost be a waste of my time.

Edited by Hydrology
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There is an old saying (not exclusive to selling audio products, but pertinent anyway ) that if you want to make a small fortune in selling audio, you had best start with a large one.

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Beyond all the above discussion which are factors, prices are generally set based on how much people are prepared to pay in that market. What power does the brand command in that market? 

 

My wife's background is market research and setting prices was one aspect she has been involved with. 

 

However in hifi there is little reason not to buy the bulk of stuff Australian made. Problem solved. 

Edited by DrSK
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40 minutes ago, rantan said:

Not only that, if the OP buys local to him (Perth) you can audition first, which is really important at this price level, plus all the things that @Snoopy8 mentioned .

 

I know where my money would be going.

Hi 

I’m not sure where I said I wouldn’t buy local 

I was making a comparison to uk prices and Australian prices. 
And I’m waiting for a lovely pair of black ones to come up for sale locally lol 

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The question is not about the increased prices we pay in Australia.  It is about how

amp a that is $5000 is the us or in the UK (does not matter) 

amp b is $4000 in the same country

however in Australia

amp a is only $7000, but

amp b is $8000

that is the issue or the question

 

we then make an assumption that amp b is a better amp because it is more expensive, but everywhere else in the world

amp a is a more expensive amp and therefore could be perceived as a better amp

 

we are being ripped off by particular brands

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From your example, we might be ripped off by the importers/distributors. 

Or they might e ripped-off by the manufacturer/distributor overseas. 

It can be hard to know what actually is happening.  Especially, as noted above, that pricing is based on what people might pay, not what it's value acutally is. 

 

I would also think the fluctuating dollar would need to be taken into account.  an importer might buy when the exchange rate is not favourable, and they need to make their investment back.  When the exchange rate is more favourable, it can make their asking price (based on what they paid) look unfair.

 

Adding to the extra tax/duties/etc. that imported goods accrue in Australia, also remember to add the shipping costs before the products get to retail (to Australia and within our continent) - they also contribute a bit to the cost. 

 

 

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14 hours ago, Hydrology said:

I'm not sure why so many people leech onto the US pricing as a reference - most prices dont include sales tax and we're talking about a population of 300 million.

Better to compare European prices - a Hegel H390 in the UK is 5,000 pounds and 6,000 Euros.

I was not comparing the $US price vs the $AU price, I was comparing the $us or $UK price of one brand vs another, then the same comparison in $AU.  Some of the differences are huge

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8 hours ago, audiofeline said:

From your example, we might be ripped off by the importers/distributors. 

Or they might e ripped-off by the manufacturer/distributor overseas. 

It can be hard to know what actually is happening.  Especially, as noted above, that pricing is based on what people might pay, not what it's value acutally is. 

 

I would also think the fluctuating dollar would need to be taken into account.  an importer might buy when the exchange rate is not favourable, and they need to make their investment back.  When the exchange rate is more favourable, it can make their asking price (based on what they paid) look unfair.

 

Adding to the extra tax/duties/etc. that imported goods accrue in Australia, also remember to add the shipping costs before the products get to retail (to Australia and within our continent) - they also contribute a bit to the cost. 

 

 

These in country cost are the same for all importers though.  I think that some importers / distributors hedge the exchange rate at probably around .6, which would account for most of the price gorge of some brands

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13 hours ago, Sean Perth said:

Hi

even then if we use the UK as a comparison then there’s still a big mismatch with some manufacturers 

ie whatfedale 

Really keen on the Elysian 

in the Uk there 6,500 pounds converted to $11,700 approx 

and retail here at $15,500 

I understand a smaller population here import tax and duty buts that’s a fair difference 

sean 

I agree.  If price were to determine value, I could walk into a retailer and believe that a particular brand offers more value then another as its 30% more expensive, only to find that in Europe and The US, the brand I thought was a better or higher end product, is actually a cheaper brand or product

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Some people (designers, manufacturers, distributors, retailers, ...) are in it mainly for the money, others are in it because they love the whole 'arena' and what it gives to them and others. (I'm sure there are other options.)

 

It's not just in hi-fi either. I had a financial adviser who wore great suits, had a lovely office, and couldn't wait to retire. I gave him up for an advisor who loved the business, the research, the dealing with clients, wore plain shirts and jumpers and had no overwhelming desire to retire early.

 

Guess who gave the best advice and management for the best price.:)

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I don't see the relative price difference between certain brands compared with their prices overseas as a rip-off.  It's a different market and so distributors will have different pricing strategies.  Certainly that makes some brands better value here if you think that  UK or US pricing is the Reference Standard.  (Which it isn't  ?)

You pays your money and you takes your choice!

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16 hours ago, JkSpinner said:

we are being ripped off by particular brands

:ermm:   

 

19 hours ago, JkSpinner said:

I changed the tittle and wording of the thread to be more representative of what I was really asking.  The question was not about buying from O/S of the higher price we pay in Australia, it was more about the relative differences in Australian pricing compared to OS pricing

This thread was not about asking...  

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It's a good lesson, just because one item costs more doesn't automatically mean that it's better.  Brands can have different pricing structures based on many factors, such as transporting the item from point of manufacturing to the country for sale.  Same country of sale but different country of production could account for discrepancies alone.

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Some distributors set a fair margin, others gouge because they can/think they can.

 

I've had a number of scenarios whereby it has been cheaper for me to buy in the US, pay all the duties, freight etc and I've had it at my door in 2 days (TNT). 20% cheaper and quicker than what a local supplier from say (lets not get too specific - Taren Point) was willing to provide. 

 

As someone said above, Australia Tax.

 

I was reading about a Lincoln Navigator today and wondered if you could buy them in Australia. In the US they're about $100k. Rumour had it a while back they'd come to Oz for $300k.....I'm sure I could find a million other examples - pellet smokers, wet suits, camera gear....don't get me started on farm equipment.  

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7 minutes ago, Peter the Greek said:

Some distributors set a fair margin, others gouge because they can/think they can.

 

 

 

6 hours ago, JkSpinner said:

I was not comparing the $US price vs the $AU price, I was comparing the $us or $UK price of one brand vs another, then the same comparison in $AU.  Some of the differences are huge

 

@Peter the Greek has pretty much hit the nail on the head above. Some are fair, some are not. Its nothing new.

 

The same would also extend to manufacturers - they don't necessarily sell their products to distributors into every territory at a universal cost, irrespective of geographical location.

I would like to think that audio enthusiasts are not buying into the idea that just because its more expensive, it must be better.

 

Only listening will let you decide if the product is worth it at the asking price.

Edited by Hydrology
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Whenever this subject comes up I speed read through . Basically for the entertainment value. The same old lines are coughed up. The price should never be taken as a sign of the high fidelity worth of the item concerned. As for the term High End? Come in spinner !! Not forgetting that the finish on some of these goods makes them veritable works of art and magnificent furnishings.

That's enough from me, I've broken my own rules by typing in this thread. ? ?

Edited by Cichlabxr
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The whole "Australia Tax" crap is tiresome. Many years ago the unions had the power to dictate high wages and low working hours in Australia. That makes products more expensive in every industry. If you want US prices (which are often direct from the parent company) go and work for US wages under US conditions. RRP is the price there too, you can't easily negotiate 10% off like we can here.

 

We are a huge country with small population which equates to higher taxes per person to maintain infrastructure etc. which equates to higher costs of doing business.

 

We have some of the highest rents and property prices in the world = Higher prices

 

Freight to Oz is expensive as we are remote by world standards and our port authorities charge crazy fees, partially to keep the Maritime Union workers noses in the trough.

 

As a long time distributor I know that unless you know how the Parent company does business it is impossible to compare prices in different regions. As said before, they could sell direct in your region, they could use distributors but give volume discounts which most Aussie distributors wouldn't be entitled to... or on the other hand they could artificially increase wholesale prices but give discounts in high "cost of business" countries to keep prices close to parity.

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7 minutes ago, blybo said:

The whole "Australia Tax" crap is tiresome. Many years ago the unions had the power to dictate high wages and low working hours in Australia. That makes products more expensive in every industry. If you want US prices (which are often direct from the parent company) go and work for US wages under US conditions. RRP is the price there too, you can't easily negotiate 10% off like we can here.

 

We are a huge country with small population which equates to higher taxes per person to maintain infrastructure etc. which equates to higher costs of doing business.

 

We have some of the highest rents and property prices in the world = Higher prices

 

Freight to Oz is expensive as we are remote by world standards and our port authorities charge crazy fees, partially to keep the Maritime Union workers noses in the trough.

 

As a long time distributor I know that unless you know how the Parent company does business it is impossible to compare prices in different regions. As said before, they could sell direct in your region, they could use distributors but give volume discounts which most Aussie distributors wouldn't be entitled to... or on the other hand they could artificially increase wholesale prices but give discounts in high "cost of business" countries to keep prices close to parity.

 

I've made similar arguments in another thread, and all that happened was I got accused of being an apologist for capitalism. As if accurately describing the reality is somehow a ringing endorsement. ?‍♂️

 

That said, I +1 everything @blybo has highlighted above - especially with regard to US wages, conditions, and consumer protections (or lack thereof). 

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17 minutes ago, JkSpinner said:

Happy to close this thread now.  It was not suppose to be a rant. 

But did you get a satisfactory explanation to yuo question?

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21 minutes ago, Hydrology said:

But did you get a satisfactory explanation to yuo question?

Kind of, but my next comment is a rant, so thought it easy to to close it off

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I think most comments over the last 5 or so hours in particular explains the whole thing perfectly, especially considering some of those comments are from people who work in the system of manufacturing, distribution, wholesaler and retail,  so your "rant" will be interesting...

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I’ve always held views on this too and totally get the changing economic environment, countries, manufacturer arrangements as been on the other side if the fence with this sort of stuff.

 

My personal issue is more to do with having to shell out your hard earned cash on something you have no idea what it’s going to do in “your room”. Distributors/retailers that simply place and order, making profit with little to no sales effort, and the risk is all yours is one of the main reasons we see relatively new gear ending up on SNA or other FS sites.

 

For those retailers, or distributors, that carry product and allow demos, I really respect you and will do whatever possible to buy from. The country needs more people like you as I’d sooner pay a small premium and get the right product first time then years of endless chase.

 

My 2c :)

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Part of the problem is that Australian wages have been in the doldrums for nearly a decade, household debt is at record highs and has been for nearly a decade.

 

I suspect that inflation is present but disguised as "shrinkage" and "free shipping" and the like.

 

 

 

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In answer to the OP's redefined question:

As mentioned above different distributors operate different business models. Anecdotally I suspect that also where a product is more widely distributed to local retailers the price is more likely to be closer to overseas prices. Where there is less retail competition, more likely further up the scale, there is a greater likelihood that the local price will be significantly higher.

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This one puzzles me, just one example from the Heritage series-

Klipsch Cornwall IV $13999NZD or $18490AUD.

Are these even a $14k speaker?

 

 

 

Edited by deanB
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1 hour ago, deanB said:

Klipsch Cornwall IV $13999NZD or $18490AUD.

 

https://paulmoney.co.nz/product/klipsch-cornwall-iv-floorstand-speakers/

$NZD10,500 incl. GST (15%) - Black , Scruffy cartons

 

Eight grand buys a lot of shipping.

 

On 22/04/2021 at 3:17 PM, blybo said:

Many years ago the unions had the power to dictate high wages and low working hours in Australia.

 

What's a union daddy? Go ask your grandfather.

Edited by thethrowback
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