Importing espresso machines

[Andy]

Yep, that's a whole other problem!

Even the "real" C tick is only good in the EU, in AU it's only a head start on the Australian Standard approval, you still have to jump most of the hoops to get the AU approval and also submit equipment for testing here too.

[Graeme]

I agree....but you are not necessarily doing him any favours if you dont make him aware of the other price and give him the opportunity to do some kind of deal for you if not match the price. As a trader we dont have a problem with clients that come in and mention (as long as they do it nicely) the box price they can *genuinely* get the same product for elsewhere IN the country. They could have pushed the button on the pooder and bypassed us totally, instead of giving us an opportunity to shift the box ourselves. That's a golden opportunity to make a sale you wouldnt otherwise have made and gain a new client, and often you dont need to match the price because what the client really wants is someone to look after them locally and they will accept a compromise in the dollars to spend.

If you dont show him and give him the opportunity, thats when he could eventually go out the back door, because not everyone will be as accommodating as you.

Yes i agree. Told them of the net price and, surprise surprise, their wholesale price was higher. Bought a dishwasher from them three months ago. Their price was $50 higher than the (delivered to the bottom of my stairs) net. When they delivered, they: brought it into the house, pulled out the old one, went to the local hardware store to source a fitting, installed it and took the other away. The net wont do that and if these shops were no longer there I would have had to pay, if I was lucky, $150 to a plumber.
I guess my argument is that in a way buying locally is similar to taking out insurance

[Hildy]

As far as I understand...
It's illegal to retail a domestic appliance without approval but it's okay to sell anything private and secondhand without approval.
It's also okay to sell wholesale and to sell commercial product without approval.
These are murky laws at best.
[/COLOR]

You are correct; however, the commercial product must be marketed exclusively to industry.

As for treadmills: they are non-declared products and thus do not need pre-approval for sales (whereas 'liquid heating appliances' do need pre-approval).

Anyhow, for someone to bring in a machine like the londinium one (marketed as a domestic machine), you'd have to pay thousands for testing before the first one went out the door.

[Andy]

you'd have to pay thousands for testing before the first one went out the door.

Yep, for sure!

So if you sold 20 machines in total in Australia and "had to pay $1000's" for certification and also had to pay 10% GST and 5% duty plus customs clearances cost along with higher shipping costs from the factory and then you spread those extra overheads across your 20 machines then the Australian product would have to cost more than the overseas ones when it was sold here. Of course there is also rent, wage, workcover, insurance and other overheads that the bricks and mortar shops have to also spread across their machine sales so people can walk-in, touch, play, query and fingerprint before going home and ordering one online overseas.

These are a big part of the price difference when comparing OS internet pricing and local reseller pricing and it has next to nothing to do with anyone being "ripped off" or "price gouged"... as some seem to think.

[Barry O'Speedwagon]

Not to mention the cost of financing the inventories for whatever the average cash conversion cycle is....and our interest rates are presently significantly higher than most other places.

[mcm991]

Yep, for sure!

So if you sold 20 machines in total in Australia and "had to pay $1000's" for certification and also had to pay 10% GST and 5% duty plus customs clearances cost along with higher shipping costs from the factory and then you spread those extra overheads across your 20 machines then the Australian product would have to cost more than the overseas ones when it was sold here. Of course there is also rent, wage, workcover, insurance and other overheads that the bricks and mortar shops have to also spread across their machine sales so people can walk-in, touch, play, query and fingerprint before going home and ordering one online overseas.

These are a big part of the price difference when comparing OS internet pricing and local reseller pricing and it has next to nothing to do with anyone being "ripped off" or "price gouged"... as some seem to think.

[/COLOR]

This thread is wonderfully circular. If you have time, it is great to read from page 1.

As I first mentioned several pages ago, it is a bit of a furphy to site all of the above. Most manufactures absorb the cost of various certifications as a cost of doing business. Although not impossible, most importers/agents do not bear the cost of electrical certification.

VAT in many European countries is in excess of 20% which makes our GST look generous. (I know exports are ex-VAT but one can compare apples to apples too.)

Shipping is marginally more. A 20' container can comfortably hold about 28 cubic meters. I'm guessing but that's probably a minimum of 60 coffee machines often discussed on this forum. So that's about $50 shipping per unit or less if you can fit more in.

and just to flog a dead horse a little more.... many of the offshore companies that ship here do indeed have bricks and motar stores that allow foreign fingerprints all over their machines too. They have just figured out how to exploit other markets.

Rent, salaries, super etc.... are all onerous and do distort the playing field here. But my gut feeling is that it really comes down to volumes.

At some point, Ruslan Kogan or somebody like him who does not even know the difference between instant and espresso will cause much wailing and gnashing of teeth. If there is an arbitrage... it is only the timing that is the question.

I personally believe that a discount market exists here for high end goods. No expert advice offered and only an in-house warranty supplied.

Feel free to ask your wives... but if I figured out a way to sell 100% genuine LV Neverfull bags here at a 30% discount.... they'd probably all be lining up. But sadly, LVMH don't price discriminate.

But that was my opinion back on page 3 I think too.

[Barry O'Speedwagon]

I personally believe that a discount market exists here for high end goods. No expert advice offered and only an in-house warranty supplied.

You may well be right. But the obvious question is, that if there are no constraints re product expertise (no advice offered..just warranty provisions to cover), why has someone not stumped up the cash and made a play at that market? My guess is that they don't think the risk-reward ratio is sufficient to justify the investment, particularly given currency risk (or the costs of hedging out of it).

[Hildy]

it's the '20 machines in total' that is the real killer. for machines that are common (like the silvia) australian prices are quite competitive - I paid less for my silvia than I can find on any amazon seller. as for 'most manufacturers', most manufacturers don't know that Australia exists.

[mcm991]

You may well be right. But the obvious question is, that if there are no constraints re product expertise (no advice offered..just warranty provisions to cover), why has someone not stumped up the cash and made a play at that market? My guess is that they don't think the risk-reward ratio is sufficient to justify the investment, particularly given currency risk (or the costs of hedging out of it).

You may be right. You'd cannibalise the market and quite possibly - everyone would just get bloodied. It is easy to over estimate the size of the market here.

[coffeechris]

This comment may come as a shock as i have mentioned in another thread how better customer service is over in the US. Anyhow something maybe cheaper to buy from overseas, such as the US. If you though are living over there in the US you could be having this same argument that everyone is having as to why thing are so expensive. To us here in Australia items like coffee machines are cheaper overseas. However to people in the US they may not be and like someone said many of these machines are a luxury item. Just like here in Australia these are a luxury item, so its human nature to go looking elsewhere e.g. internet overseas for a cheaper option. Is this the best option though?

All that aside i don't want to take a dig at anyone at the end of the day someone can buy what they want. Yet many on here seem to argue the point with their own opinion, yet sponsor who know there stuff gives you a point of view which is more valid yet people still think they know better. Like anyone these sponsors and anyone else selling these high end machines here in australia need to make a living as well. Many of us i'm sure don't have a proper understand of the cost involved before these machines before they come out for us to buy. So if we knew what those cost are this added with the wages we make here in australia and the cost of living these machines are prices are more than reasonable for us to buy.

If you feel you don't want to buy from here as its too much thats fine its your choice... Like anyone else i'm just another one in this debate but quit simply i wouldn't buy any major machine from overseas in risk of something going wrong prior to getting it and after getting it. People can throw up all the figures they want at the end of the day you support jobs here from buying here and within the CS sponsors here i have dealt with you will also get great customer service when needed.

But yes i do also buy clothes over seas from America also, as i boycotted Myer along time ago.....

Chris

[TC]

This thread is wonderfully circular. If you have time, it is great to read from page 1....

Agreed!

Shipping is marginally more. A 20' container can comfortably hold about 28 cubic meters. I'm guessing but that's probably a minimum of 60 coffee machines often discussed on this forum. So that's about $50 shipping per unit or less if you can fit more in.

In many cases, the volume Australian market does not allow for a whole container. The options are then to consolidate with a forwarding company and risk pilferage/damage or look for alternatives such as air-freight. We choose air-freight on our smaller imports of a few pallets at a time and I like it because it's quicker (we see specification changes pretty much immediately) and allows us to be more reactive to the needs of the Australian market. This doubles (or more) our freight costs, but I feel that they advantages outweigh the disadvantages. As volumes increase we will look at the alternatives once more.

As Andy stated above, this often leads to landed of Australian spec. models at prices above that of EU stock.

But my gut feeling is that it really comes down to volumes.

That's it in a nutshell.

I personally believe that a discount market exists here for high end goods. No expert advice offered and only an in-house warranty supplied.

Hmm...not with our Australian consumer law which provides far more protection to buyers- at a cost to suppliers.

Whist many here argue that the playing filed and prices should be level, the harsh reality is that it isn't and they are not. Much of this is not dictated by the importer.

The service, support, parts warehousing and protection afforded to Australian buyers does come at a cost due to a whole heap of other factors. We are a big country, and purchasers expect that support will be closer than 3000km away and that means that a reseller network makes more sense than in a country where you can drive from one end to another in an hour. There the importer just resells boxes.

Some potential buyers forget to take many/all these factors into account when they demand Australian service standards but are not prepared to part with anything whatsoever for this level of service.

So, how to compete? If the Australian market want cheap and no support, no problem. We join the Europeans and we just use a logistics company to to ship out of Europe. All care, little responsibility and no pesky Australain laws nor protection for buyers. Presumably all income goes to an account somewhere in the Cayman Islands

Chris

[mcm991]

Presumably all income goes to an account somewhere in the Cayman Islands

Chris

I would strongly advise against using any Cypriot bank.

[adjiland]

A simple test for the argument that is pro importing or purchasing of a grey importer in Australia is to call their Australian contact which is not even in Australia in some cases and tell them that you need some after sales service or you need a simple spare part you will soon see what level of support you have it will be very limited. The old saying you get what you pay for is very relevant in this issue.

[mcm991]

A simple test for the argument that is pro importing or purchasing of a grey importer in Australia is to call their Australian contact which is not even in Australia in some cases and tell them that you need some after sales service or you need a simple spare part you will soon see what level of support you have it will be very limited. The old saying you get what you pay for is very relevant in this issue.

I don't think anyone would argue with you on that point. At least not on page 6 of this thread.

[mcm991]

Hello Andi,

You will in time understand in time that your R58 is not of identical specification to the Australian model. Our experiences with 2 damaged EU spec machines we were asked to bring back to life was that they performed very poorly and there is no way that I'd put our company name to one. I saw exactly the same performance in a prototype evaluation machine I sampled. This is why there has been a delay of a year from launch in bringing the R58 to the Australian market. Further information can be found in the discussion if you are interested.

Our Australian machines are a very small batch, produced specifically to the requirements of the importer. By nature, small custom runs in different spec are more expensive. There is also a cost associated with local warranty and after sales support.

Resellers (as we are) do not have a huge margin to play with. Many buyers fail to acknowledge this.

Chris... you will be happy to know that you have indeed made the world just a little bit better place.

All R58 machines worldwide are now being built to Australian specs. There is room for passion in this business after all - and you can take the credit for it.

Happy Easter.