Why are markups so high?

Discussion in 'General Discussions and Advice' started by jaybeepee, 28 Sep 2010.

  1. jaybeepee

    jaybeepee

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    Hi All,

    I bought a 500ml Rowa Phos the other day from a LFS in midrand. It came to R626!!!!!!

    I just checked online and the exact same product sells for 26GBP which at current exchange is R290. NOW, I ask with tears in my eyes - who the hell is making the extra R336?
     
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  3. RiaanP

    RiaanP Moderator

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    The shopping complex owner. Not the LFS owner.

    Shop rent. Had you checked te rates per square these days in a descend place. A small shop is normally 160m2. 6 meters wide and 10 deep. And rent will be R15000 if you are lucky or in a really crap complex. Just think what is the markup on your beer the bottlestore must make to be able to pay his rent. Drives you to drinking.
     
  4. TheWaterboy

    TheWaterboy Sponsor

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    also bare in mind rowa is made in europe.
    there is no duties paid with the europian union.

    try buying it online and getting it here..........it might cost even more.


    its all bussiness my friend.......what do you think supplements cost to make......i can tell you......the packaging costs twice as much as the product.:(
     
  5. ziyaadb

    ziyaadb

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    couple reasons over and above whats been mentioned above

    1) Its a nich market
    2) Market - SA is a SMALL market compared to the rest of the world hence the supplier buys enough that he can sell and does not get a huge discount for buying in bulk
    3) exchange rate - buying is rands is more expensive then buying in GBP
    4) shopkeepers need to make a living (minimum selling price)- if an online retailer comes in with almost zero overheads it makes things difficult for the sponsors and not worth their while
    5) shipping costs

    Over and above it the fact that if u a poor south african you cannot afford to keep a marine tank is the hard reality of this hobby.

    BUT things are getting better and prices are coming down. i bought 3 healthy fish over the weekend that would have cost me the price of 1 a year ago
     
  6. LuckyFish

    LuckyFish MASA Contributor

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    Prices for livestock are much higher overseas, electricity too. Bottomline, it is still much more affordable to run a reeftank in SA compare to europe or the states.
     
  7. xtreme

    xtreme

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    even in Namibia

    Wen you see a price at the shop in SA I have to multiply it with 180% that amount it will be for me when I receive it here in Namibia:(
     
  8. vatso

    vatso

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    This Question can lead to some very heated debates as to why things are cheaper else where.

    A very good friend of mine imports high end HIFI equipment so is in distribution & he explained to me why & how things work.

    There are a few factors.

    1.) Importers

    In South Africa we need importers to bring products in & manage a channel as well as back up the products they bring in they also need to make a living.

    There are all sorts of costs

    Freight
    Customs
    Product Vat
    Tax on Profits
    Tax on Salaries

    2.) Retailers
    The retailers as well need to pay for staff & shops

    We know how much it costs to run one tank in electricity now think about running a shops tanks with all the corals they keep for us to buy the cost of electricity & supplements & boxes of salt with the water changes they need to do.

    They also give of their time & knowledge which if you ask me is worth more alot

    So yes there might be a price difference here in SA to the rest of the world but there are good reasons it's not just because some one person is getting rich


    There is a HOWEVER

    things are changing and as such the importers & retailers need to look at how this will affect them in the long run - we are now in a global market where ordering things from overseas is getting easier which will put pressure on the industry. a little like the movie industry & file sharing

    Things are forever changing & one needs to decide what is best for them.


    I leave you with this

    How much would we benefit if the retailers were not around?
     
  9. mandarinman

    mandarinman

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    it is like saying' if i go buy this steak at the shop it will only cost me x per kilo but now i must pay so much more in a restuarant!' reality is that there is a manufacture overseas who sells it to a wholesaler to distribute worldwide. he sells it to a wholesaler in sa who must market and deliver that stock to the retailer who in turn must cover his costs so that you can drive down the road and buy it. the main cost in anything these days is transport,storage and marketing.
     
  10. mandarinman

    mandarinman

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    ps i wouldnt argue about pricing with my doctor or specialist either!
     
  11. Stackrat

    Stackrat

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    Hi Jaybeepee.
    I can get it in London for £25 and send it via Royal Mail worldwide for £11. This would take 5-7 days to arrive in Joburg and so far cost £36. It would then probably be subject to import duties (no idea how much). If it ever reached your local sorting office, chances are it would either be used as a football or stolen. Either way it would not be worth your while.
    Have you looked at other media for phos removal? People over here are also moaning about the price of Rowaphos and looking to alternatives that are just as good but half the price. Reef Scientific is one such product. Osmotics own brand is another.

    I feel your pain but at least your fish are cheaper :thumbup:
     
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