R/$ Exchange Question for Suppliers

Discussion in 'General Discussions and Advice' started by Mathewis, 23 Sep 2009.

  1. Mathewis

    Mathewis

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    Well seeing that the Rand has strengthen from +- R10 to +- R7.40 and will probably go as low as R7, leads me to the following questions to all marine suppliers.(This from Jan2009 to now.)

    Will we see the prices of equipment/livestock drop or not? I really have not noticed any drop in prices of equipment or livestock yet?

    Is this because most suppliers are sitting with old stock from the beginning of the year. Or do the suppliers use this as a way to increase their margins? Seeing that we are already now used to the higher prices.

    Could some of our sponsors please enlighten me?
     
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  3. Neil H

    Neil H Moderator MASA Contributor

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    can of worms .......
     
  4. RiaanP

    RiaanP Moderator

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    well, with only a few shops around, they can ask what they want. And we have to accept. They have us by the short and curly's.

    Unless one is cheaper, and we do some research (as we should do) and support the cheaper one. In respect to hardware especially.
     
  5. Mathewis

    Mathewis Thread Starter

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    Actually I think the problem is with the Importers. The shops get suggested retail prices they have to ask on equipment.
     
  6. lanzo

    lanzo Sponsor

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    Like you said marthewis we need to stick to recommend retail...why....?Due to price warrs in the market...Wrong in my eyes.

    Regard R/$ prices will maybe come down in the next 6 weeks when the new containers land...but remember that the electricity also went up with 30% and rumors of 40% more in the next months...so live stock prices will probably stay the same...running lights over reef tanks in a shop with a 30% increase is quite a significant number over 30days

    But i think the prices of hardware will drop;)
     
  7. RiaanP

    RiaanP Moderator

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    So much for a free economy where Supply And Demand determines the Price.
     
  8. regis

    regis

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    I Personally Buy My Hardware Of Ebay, I Save Between R500 To R800 Rand, Per Item, And That Is Shipping Included. Example, Calcium Reactor Local Price R2223 Sipped From Ebay R1110
     
  9. Neil H

    Neil H Moderator MASA Contributor

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    Lanzo, why would price wars increase the price? Or are we talking about price fixing ?
     
  10. Mathewis

    Mathewis Thread Starter

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    Lanzo I agree with the livestock. Electricity prices are a bitch!

    Lets hope we get some price drops in the equipment department.
     
  11. Adee

    Adee

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    Mathewis, u typed up something that's been on my mind lately.

    Hopefully we should see things comming down...I typically judge LFS prices of fish, by what they selling their Anthias (Goldies) at. I once saw them go from around R80 each (females) to over R230 each...now hovering around R140 mark. Dunno if they get back below the R100 mark though...Same could be said for Chromis which were once R40 each...

    Cost for imported "non-livestock", should be more noticably in our favour going forward.

    Let's just hope those JSE traders don't try and rally the rand back up to +R10 to the dollar. Unfortunalty our exports are suffering...so is the game of Economics.
     
  12. Mathewis

    Mathewis Thread Starter

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    I am a JSE trader and trust me(Hope I'm right) the rand is going down. Some say even R6.50( I think +-R7.00). This will last till probably after the World Cup, then it should stabilize at R 8.30.
     
  13. Pugsly

    Pugsly

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    I think one must remember that when these importers bring containers into the country (as in jan 09) they don't only bring in 10 items! They maybring in 2 - 3 containters of one specific item to ensure they can supply the market. This will take a bit longer to finish than 10 items. ( thats an example) So I am sure that when the new shipments come in there will be a steady price drop on the new items.

    Also we are sometimes blinded by prices from the importers. I mean, if I could imagine the quantities of items imported for the pet trade one must think, that surely these companies must pay a deposit then wait roughly 3 months for the shipment to get in, and pay the balance of the goods imported, then further wait around 6 - 9 months till they get the total return of $$$ import investment on these imports.

    Think for yourself - lets say the total shipment cost is R3 million (I think that is a bit small, but lets keep it at 3 million rand) what will be the interest on that money sitting in the bank to these companies? And not to mention the bank costs of transferring this type of money to an overseas bank? Maybe some importers run into overdraft what will be the interest be on that type of overdraft!?!?!?!?!?!?!?!?

    Then of course one must take into account how much bad debt there has to be with regards to LFS not paying promptly for stock or just never paying for some of the stock. So the importers will have to have some sort of backup, thus slightly increase there prices to cover this!

    Another consideration - I travel quiet a bit - and I always compare prices from one province to the next. And here is an example - here in PTA the price of one said item will be 50% more expensive than I could get it for in cape town, then the same item will be 20 less expensive far up north than here in PTA, and then natal is roughly 40% cheaper than here. What does this tell you about our dear LFS!?!?!?! Cause we earn more here in PTA / JHB we must pay more, where as the areas where cost of living are less all the goods are a whole lot cheaper!!!!!

    Just my 2c
     
  14. Mathewis

    Mathewis Thread Starter

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    I see your point Pugsly.
     
  15. Warr7207

    Warr7207

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    Pugsly :wave2:

    I import "stuff" via the container load and if you can't move the stuff within a couple of months it ain't worth bringing it via sea, rather take the knock on airfreight, but smaller quantities.


    Generally 4 weeks April to July, add a couple of weeks in "high" peak season. Deposits are bad business practice and I doubt the Larger importers do.

    More competition means better pricing and more choice.

    No one can tell me that a R10K skimmer has more technology (let alone electronic bits and bobs) than an insanely powerful Playstation 3, yet the PS3 is less than half the price of a giant jucuzzi pump :whistling:
     
  16. Nemos Janitor

    Nemos Janitor

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    What happens if you dont stick to recommended retail? Do you not get supplied again? If so, is that not price fixing? Hmmm....
     
  17. Bob the (reef)builder

    Bob the (reef)builder

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    Nemos, price fixing is when two or more big suppliers, say Adam and Scott colude to push prices up by creating something similar to a monopoly. Thus they get themselves an unfair advantage and unfair profits.

    It's different when one importer asks his customers to to sell his product at or above a recomended retail price. Its so that the very low overhead guys don't start price wars causing his other clients to buy somewhere else. Its to keep the peace within his "stable" of retailers. Its not price fixing.

    Regarding the rand strength, I know for instance that the new containers will come in cheaper and that these savings will be passed on.
     
  18. rugs

    rugs

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    Im a importer,its wrong to blame the importer becaus we are squeezed for the last discount and often reminded of the exchange rate by retailers.some goods retailers get a 50% discount on certain goods...what im trying to say is that the retailers are the ones you should be asking a discount becaus remember we are in a way dependent on them so we do our best to make them happy.and believe me our profits are far less than what the retailers make and like pugsly mentioned its ytue we wait months for our returns and we loose much more than the retailers considering the fact that when you as a customer return something the retailer dont loose,we loose becuas they give it back to us and we have to give them a credit,and do you honestly think its worth it if you take for eg something manufactured in china,imported into south africa then when you guys return it we have to export it back to the factory in china to be repaired.let alone we are paying duties to sars and shipping to get the goods here when you export a product its much the same just the opposite way around.Do you guys realy think that we can even attempt to increas our price quite steeply when the dollar sizes steeply,if your answer is yes then let me tell you thats totaly wrong.when the dollar is down retailers buy exesive stock from you thus when the dollar go up then they have old stock which was purchased and they just increase thier price a bit and blame it on the exchange rate when you guys query it.wher does that leave us as importers,well when we import goods when the dollar is high the we face the problem of retailers holding out becuas they have stock,till then its a waiting game the whilst still in possesion of this stock when the dollar drops then we are forced to sell it to the at low prices.sorry for the bad english as i said im a importer not a english proffesor...
     
  19. Nemos Janitor

    Nemos Janitor

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    Rob i disagree. Price fixing is when a supplier like TOYOTA and others, dictate retail prices to their retailers. Toyota and others were not so long ago investigated and they paid hefty fines for enforcing selling prices.

    Suppliers can quote a recommended retail price but cannot enforce. If they do then they are in contravention of the competitions act. I will see if i can google it for you.
     
  20. Nemos Janitor

    Nemos Janitor

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  21. Bob the (reef)builder

    Bob the (reef)builder

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    Nemos you may be right. However the difference may be that a Toyota dealership can only sell Toyotas, and thus being forced to sell at a price by the parent co is a problem they can't resolve without becoming a ford dealer for instance, at great or possibly imposible cost.

    The difference as i see it is that for instance in our industry I as a retailer can buy a skimmer from any number of wholesalers. If the wholesaler sells to anybody and allows them to sell at any price, even if they work out of their garage part-time and are happy to make a tiny profit, I may not buy his skimmers any more as i can't compete with the merry discounter.

    It is fine for a wholesaler to protect his clients interests by asking for a minimum retail price, as long there is a free economy in which the retailer is easily able to stock another product. (ie not like the Toyota example).

    I do see a difference and don't begrudge a wholesaler trying to maintain a level playing field for his product. It would also be very difficult to force a wholesaler to sell to someone he doesn't want to sell to. (Obviously barring Toyota-like agreements or other franchise agreements.)
     
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