Wednesday, September 28, 2011

Let’s talk about prices

It is known by a fact Australia is a freaking expensive place to live in; it does not matter how you search online or who you consult with, almost any Aussie city will be in that list. Even worst, almost all the time Sydney and Melbourne will be in the top ten.

And why do I think Australia is so freaking expensive?

Because I suffer it on my bone and flesh every single day, every single time I am paying rent and every single time I go to the mall to acquire any good I notice the huge price difference in comparison to the same products in the US or Asia.

Being honest, I don’t have a clue of why Australia is so overpriced; maybe lots of taxes, import duties and what else only god knows but you could find lots of goods with huge overprice margins regardless to the country of origin of the product.

To those who does not know what a PS3 Controller is...

For instance (and I don’t have intentions to sound trivial with the item I am going to post in here) you could buy a PlayStation 3 Controller Dual Shock 3 SIXAXIS on any retail store for A$90... If you find a very cheap place where to buy it from.

OR you could go online to ebay if you want and buy it for A$30 plus postage, or you could even go to Amazon and buy it online with a bundle (most of the time bundles are not available in Australia) and get it for A$40 including postage with a brand new game (depends on offer and season).

Maybe the PS3 controller is a bad example because you could argue there are websites selling those controllers directly from China with a retail price of $30 flat; and there is the light possibility of someone telling to compare a wide range of items, because one item is surely not enough… 

Let’s take a shiny new 3D LED TV (I am going top of the line here just to show the difference in prices).
The Sony Bravia 60” Full HD 3D LED LCD Smart TV (I don’t like Sony as my display, but I went to the JB HIFI website looking for any brand).
See the tackle coming at you... you will definitely will feel it with the price!

On JB HIFI it cost A$3496 (you could ask for a deal, actually I went there and asked for one and they gave me the ubber awesome discount of A$500)

On Amazon (US)*(1) it will cost US$1258 (at the time I am writing this post), including shipping, exchange rates and taxes it will be A$1800.
*(1) Could not find it on for the comparison… But it will probably be cheaper as well.

Difference in prices: A$1.200!

If there are differences on these prices, go to JB HIFI and Amazon websites, note down the prices and compare.

Now I could argue this price stuff and blame entirely on extreme taxes (yes, bonji jumping extreme) or very bad policies applied to certain products.

Let’s study then a scenario that to me is totally absurd; I present thee Holden Cruze (I was about to select the Commodore... more about that later).

Holden/Chevrolet Cruze

Why the Holden Cruze?
Holden brand is Chevrolet on the states (and several other countries as well) and the Cruze has the exact same name everywhere, so I thought it could be easy to related between different models. And there is another reason to select the Cruze; turns out is a fine Australian made car (at least those sold in the US are)... So, if the theory is right, the Cruze should be cheaper down under than anywhere else, right? 


The Holden Cruze CD (the cheapest you could get) costs in Australia A$21.990 (without changing anything to it); that is US$21.700 with the current exchange rate of US$0.98 per each A$ (if I had posted this before the US price goes up for few hundred).

Its description is:

  • Model: Series 2 Cruze CD
  • Engine: 1.8 Petrol (gasoline) engine with manual transmission, 6 (gears/speeds).
  • Colour: Heron White (not that makes a difference, double checked).
  • Trim (Seats and Interior): Jet black cloth.

The Chevrolet Cruze LS (again cheapest that matches previous description) costs in the US$17.275.
Aussie price for the Aussie built car is 126% the US price.

That is ‘BUGGER!’ in Aussie slang or ‘what the funk?!’ in American.

So... how come Aussie will pay more for the same car? Is it that shipping stuff to the US is so cheaper than shipping within the same territory?

I can't understand it at all...

What could I find while doing my research?

Australia will get higher prices on 80% of the items; you name it! If you are whiling to spend some of your time searching online, try to establish similar products from different places and you will notice the great difference between prices.

Whose fault is it?

There are three different groups to blame on any society (Australian or not).

  • The Merchants, manufacturers and retailers; huge companies will always try to get more profit without taking into consideration markets or societies. I call this group ‘the bitches’ or industry prostitutes because they will charge you as hard as you want their services.
  • The Government or the market regulator; this group are the pimps, they use their prostitutes to get money out of the public on many different levels.
    For instance, you pay levies or taxes on those goods you are trying to purchase (just like the prostitutes charge you for their protection paying it to their pimp) and on top of that you also have to pay taxes deductible from your income.
  • The customer or client; this is the worst of all (to my point of view) because it won’t matter how much people would like to sell themselves for money or how hard the pimp will hit others to get his money, the customer is the one supporting the entire system. Without someone looking to get an easy ‘date’ there are no prostitutes, without prostitutes there will be no pimps.

What do I want to say with this?

Well my dear Aussies, you need to hunt a good bargain and to know when to say no to a huge overprice, no matter how madly/desperately you want it just say no and keep looking for a better bargain.

Think ahead, plan your investment. That means, if you buy something regardless its cost try to get the best value out of it.

What do you think? Am I wrong with my perception?


XerxesB said...

one reason i've been told is that cost of transport to send goods to australia results in higher prices.

it's a load of crap, but i figured you might want to write that one in your list of lame reason why we get ripped off.

Rod said...

Yeah, I remember someone telling me the same stuff... and for a period of time I believed it until I started doing some research.

Snap said...

Yes, we're over taxed to the hilt. 'Some' of those taxes I don't mind paying because they fund our (nearly) free education, (detiorating) public health care system, garbage facilities and town water (if you have them), old age and disability pensions (if you can live on such a small amount of money)...I could go on complaining.

However! I'm just about to return home after one year in Thailand. I haven't worked here, instead I have dwindled down my savings and have lived on a very modest amount of money. About the same as a middle class worker would be paid.

I am extremely happy that I am not an average working Thai person with a family to support. No free anything. Get sick and you borrow (if you can) or save to have an operation. In the mean time, you could die. Free schools are poor schools here, bad academic reputations. There are no pensions, get old or become disabled and hope someone looks after you.

I love my country but am positive some of the taxes are just to fund our overpaid, over indulgent policians.

You can only be sure of two things in life...death and taxes. Have a wonderful day :)

Rod said...

Loved your comment Snap, especially when I have seen (and lived) in a country just like that (Venezuela).

Now, I must confess, I am not complaining about taxes and I could go on a limb here, Australia overprice can't be attributed entirely to taxes. Taxes could be responsible for 30% increased prices but I have seen items with over 200% (shoes are one of those items that fully qualify on this category).

For instance, I bought a pair of Merrell Bare-running shoes in the US at a price of $95, including shipping and taxes of 30% those shoes should had been $137, but the cheapest I could find it in Australia was $260 (Athlete's foot has it on $320 - that is 233% US price).