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  • #16
    Re: Oz to USA Price Parity...

    Originally posted by 104F57414A414D444447474F434C220 link=1305923401/4#4 date=1305928843
    Also, why cant I have a Porsche for $70k US?

    ;D I told Chris today you could get a roaster cheaper in America and he didnt even try and punch my lights out ;D ;D

    The parent company plays a huge role in the prices we pay in Australia. Plenty of countries have Mercedes and BMWs as the mainstays of their taxi fleets, bet they dont pay AU prices for them :

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    • #17
      Re: Oz to USA Price Parity...

      Originally posted by 5254434852554D4F260 link=1305923401/15#15 date=1305972578
      I told Chris today you could get a roaster cheaper in America and he didnt even try and punch my lights out
      ;D ;D You didnt get to hear my internal dialogue trentski :P

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      • #18
        Re: Oz to USA Price Parity...

        Originally posted by 2F2C3F243E392C2B2B344D0 link=1305923401/11#11 date=1305965147
        "If you dont love the way BMW Germany wants to make profits in Australia, move."
        Well, with the car market, we have a big choice of good cars from all over the world. If we dont like the offer from BMW we dont need to move from Australia, it is easier to move to another brand with a better deal.

        Barry

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        • #19
          Re: Oz to USA Price Parity...

          Originally posted by 210211111A3C27160D00020D630 link=1305923401/17#17 date=1305974645
          koohii wrote Today at 6:05pm:
          "If you dont love the way BMW Germany wants to make profits in Australia, move."


          Well, with the car market, we have a big choice of good cars from all over the world.
          Pretty sure if you reread my post, you will see this quoted to make the complete opposite point that I was trying to convey.

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          • #20
            Re: Oz to USA Price Parity...

            Originally posted by 6A495A5A51776C5D464B4946280 link=1305923401/8#8 date=1305963758
            I think that the average Ausie is better off than just about anyone anywhere else. Who can beat our employment, wages, health, economy, houses, climate, beaches, food, coffee, wine, beer.
            I agree Barry, however, we are now in a global economy. Due to the size of our market (and a whole lot of other excuses) we do end up paying through the nose for certain products. The fact that many see and state this, it is a common point of frustration. I do not blame any retailers, especially small businesses for the prices they charge. Everyone has to make a living, and running a small business in Australia deserves to be well rewarded for the effort needed.
            By saying that Australia is such a great place  to live in, and if you do not like it, then bugger off; is not the answer. There is nothing wrong with ensuring parity with the rest of the world, after all we are the consumers and we should be making the demands and setting the market price. We should not accept what companies overseas want to dictate to us.
            As an interesting exercise, look what an imported well made car like a Porsche, BMW, Audi, Merc etc cost when the Australian dollar was worth Less than $0.70USD and under 50c Euro. It has now increased in value by almost 50%. That means these cars as a base price into Australia cost at least 30% less now. Is this reflected in the price of the aforementioned cars today? Hell no!
            So, who is the sucker? The complacent consumer.
            Australia is a great place to live in with great food etc like you mentioned. However, many countries in Europe with high standards of living also enjoy the same quality of food etc, but at cheaper prices. I have many  friends, family and colleagues who travel extensively, both for work and pleasure. Their thoughts and comments are very interesting. In a nutshell the conversation always goes, Australia is great but ...........
            Another point, have you seen the cost of houses in the USA? We pay through the nose for houses here in comparison.
            Moral is, stay in Australia, but lets push to make it an even better place to live.
            I wont go down the path of my biggest bugbear (why tax thresholds are not increased according to CPI).

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            • #21
              Re: Oz to USA Price Parity...

              Originally posted by 7B7C69666B080 link=1305923401/19#19 date=1306028824
              many countries in Europe with high standards of living also enjoy the same quality of food etc, but at cheaper prices
              Is this possibly due to our present exchange rate?

              When I was in the UK and Ireland six years ago, with the exchange rate then, everything cost about double of what we paid here at the time. The only cheap things in Europe then were airline tickets. Now we get many more pounds or euros than I got then for my A$. Now things would be much cheaper for us.

              Barry

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              • #22
                Re: Oz to USA Price Parity...

                All this gets back to one thing, economies of scale, the bigger the population, the bigger the demand, the cheaper the price, in Australia, small population, smaller demand, higher prices, plus along way from the producer of the goods, so price relies on what the market here will bear, and that usually means higher prices.

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                • #23
                  Re: Oz to USA Price Parity...

                  Originally posted by 657461677A20150 link=1305923401/21#21 date=1306048530
                  All this gets back to one thing, economies of scale, the bigger the population, the bigger the demand, the cheaper the price, in Australia, small population, smaller demand, higher prices,

                  You can you explain to me why the higher population means lower price?
                  If a product is made for a global market then why would Australia pay more for it than America? They are making more to cater for the Australian market so cost should be less, not more

                  Originally posted by 657461677A20150 link=1305923401/21#21 date=1306048530
                  so price relies on what the market here will bear, and that usually means higher prices.
                  So what is it? Economies of scale (which I need you to explain a bit better) or is it "because they can"?

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                  • #24
                    Re: Oz to USA Price Parity...

                    Originally posted by 3A3C2B203A3D25274E0 link=1305923402/22#22 date=1306062320
                    So what is it? Economies of scale (which I need you to explain a bit better) or is it "because they can"?
                    Go into Harvey Norman and ask for a price on a TV.  Then ask what the price would be if you bought 10 of the same TV.  Im betting the price per TV would drop a bit.

                    Its a simple analogy, but Im guessing its similar in terms of world trade...  USA sells a million units of X, Australia sells 100,000.  Guess who squeezes the best price out of the suppliers?

                    Plus, because the USA is a bigger market, there will be more retailers competing for a share of the very big pie.  And no doubt at any given time, any number of those retailers will be prepared to sell at ridiculously low margins to try to compete for their place, or establish their brand etc. etc.

                    Im no expert, but that to me is economies benefits of scale.

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                    • #25
                      Re: Oz to USA Price Parity...

                      Originally posted by 42474B4F43484E11260 link=1305923402/23#23 date=1306108746
                      Im no expert, but that to me is economies benefits of scale.

                      I think what you have described falls under "because they can" rather than economies/benefits of scale

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                      • #26
                        Re: Oz to USA Price Parity...

                        (Puts on Economist hat) Economies of scale are present for some products in manufacture - the fixed costs of setting up a production line can be spread over more units making the per unit cost cheaper for a large production run. Clearly this aint totally true in this case as the products all come from the same Chinese factory wherever in the world they are going, but its likely that the production run for Australian voltage will be smaller than for the US 110V and there are likely to be some fixed costs involved in switching production from one to the other, which make it a little cheaper per unit to produce the larger production run of US voltage appliances.

                        Other partially fixed costs can arise from such things as setting up a distribution/service network and the costs of advertising- these tend to have a large fixed component (eg you still need at least one guy in each service centre trained to maintain the machines whether they are working on one warranty service a week or one hundred, the set up cost of a product website for each market etc); plus inter-country variance in wages costs and as has been mentioned before, taxation.

                        Another factor that can explain price difference across countries is variation in how demand varies with price changes. Technically speaking, firms will maximise profits by charging a higher price to markets where the price elasticity of demand is more inelastic (ie quantity demanded doesnt fall so much in response to a price rise). It seems likely that Australians have the bad habit of buying enough of higher priced goods to make it more profitable to sell fewer units at higher prices, than cut the prices and sell more units. We have a small market leading to a lack of competition at the retail sector. We get used to high prices and as long as we keep on paying them, manufacturers will keep on charging them if they are rational profit maximising firms.

                        (thus endeth the Economic 101 lecture)

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                        • #27
                          Re: Oz to USA Price Parity...

                          Originally posted by 301610020D304D630 link=1305923402/25#25 date=1306112481
                          Clearly this aint totally true in this case as the products all come from the same Chinese factory
                          I thought Milan, Naples and Florence were all in Italy? Must explain how another site selling Chinese manufactured gear "stocks only equipment designed and built in the Chinese prefecture of Europe"... :

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                          • #28
                            Re: Oz to USA Price Parity...

                            Originally posted by 0B3E3334001C3039393A3A5F0 link=1305923402/26#26 date=1306113959
                            Originally posted by 301610020D304D630 link=1305923402/25#25 date=1306112481
                            Clearly this aint totally true in this case as the products all come from the same Chinese factory
                            I thought Milan, Naples and Florence were all in Italy?  :-?
                            I had in mind the US/Aus price difference of thenew Breville product...!

                            Im presuming that, for the Italian products, we are talking about relatively small scale exports of products  that involves large distribution costs, plus whatever adjustment to Australian conditions is required on a small production run. When you add the small market for higher end coffee machines in Australia (a function of both culture and population) I would imagine that the small retailers that sell these machines have zero bargaining power against the suppliers to negotiate on wholesale price, as they just dont sell sufficient numbers; however to sell they  have to be able to have both expertise and skills to service and demonstrate them well - its not suprising that the costs and therefore the retail price are high.

                            Its one of the inevitable downsides of a living in a small but geographically dispersed  market. But Id take that over living in London any day of the week (which is why Im here not there!)

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                            • #29
                              Re: Oz to USA Price Parity...

                              Originally posted by 6F697E756F6870721B0 link=1305923402/24#24 date=1306112437
                              I think what you have described falls under "because they can" rather than economies/benefits of scale
                              Youre probably right... I started out thinking I was having a stab at explaining economies of scale, but got to the end and realised I hadnt done a very good job of it (thus crossing thru economies and replacing with benefit!).

                              I think SusanS has now done a great deal better job of explaining the concept

                              P.S. if all else fails, you can always look up "economies of scale" on wikipedia!

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                              • #30
                                Re: Oz to USA Price Parity...

                                Originally posted by 04010D09050E0857600 link=1305923402/28#28 date=1306122930
                                I think SusanS has now done a great deal better job of explaining the concept
                                Yep, but when it came to explaining why things are priced higher here, it boiled down to "because they can" >

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