amazon down under

[Franco]

You are confused...
What you are referring to is authorised channels versus grey market.

[ribuck]

...Amazon are unlikely to ever stock the more specialist gear...

On the contrary, Amazon can sell many more product lines than the specialist retailers, either through its warehouses or through independent retailers that participate in the "Fulfilled by Amazon" program.

That's how it works in the UK anyway. You go to specialist retailers if you're buying a product that needs fitting, or if you need something literally NOW. But if you want something as cheap as possible, or something obscure that isn't stocked by any specialist retailer (they can only keep a few thousand items in stock at best), then you order it from Amazon.

[Mark F]

ribuck - that is true to some extent but I expect the "cannot ship to Australia" issue will still stop shipments from most specialist retailers from os who work though the fulfilled by Amazon program. Actually thinking about it a bit more the cannot ship issue is mainly us retailers not uk/eu retailers, as the eu regulations restrict the ability of manufacturers and wholesalers to apply the prohibitions.

[slparker]

You are confused...
What you are referring to is authorised channels versus grey market.

What makes a channel 'authorised'? Who does the authorisation, Franco?

[Mark F]

Authorised channels are where the seller has permission from the manufacturer to sell into a specific market and the seller supplied subject to the seller not selling into unauthorised markets - think Cascade Designs products and US retailers. This restriction may be geographic or industry based.

Grey market is usually where the seller is not permitted to sell but does so anyway. Think of the electronics sold through Asia into Australia where there is an authorised distributor in Australia - most of us have bought in this way and saved heaps. Usually warranty is not honoured on grey market sourced goods.

[Franco]

You are confused...
What you are referring to is authorised channels versus grey market.

What makes a channel 'authorised'? Who does the authorisation, Franco?

Authorised channel.
Authorised by the maker.
If you want to sell a reputable brand you need to apply to the manufacturer and succesfully convince them that you are able to import , service, advertise that brand to the level the brands requires.
Doing so (offering repairs/spare parts/assistance -training to retailers) cost money and is, up to a point, peculiar (cost wise) to a specific country.
Because of its size,low population, high wages and rents, Australia is not particularly competitive but that is were we are.
To give an obvious example, would you buy a brand new BMW car here if there was no BMW dealership ?
Of course if one only purchased BMW from the factory (not possible but lets pretend...) and sold them here without any of the costs I mentioned, those BMW would be a lot less expensive, but what happens when you have an accident or it brakes down ?

Recently I had to replace the pool filter. I needed to replace the multiport valve at the top.
However the part is not available so I had to buy a new one.
And that is what happens when you need spare parts that people like grey importers don't stock.

Recently I had to have a tree cut down by tree climber.
The guys that did it had done the same work in NZ working for about half of what they get here.
They charge me for AU wages not NZ ones. Do I feel ripped off ? Well no because they live here now not in NZ...

As much as we all like the low costs of grey /parallel importing, in the end we pay for it.

Since I have the time...
Over the years I have had several people , including shops and importers, asking me how they could import and sell Tarptent products themselves.
Once I explained our cost structure, it becomes evident that unless the sell price doubles it would not be worth doing it.
Of course once the price doubles why would someone here pay that compared to the price they see on line?

[slparker]

You are confused...
What you are referring to is authorised channels versus grey market.

What makes a channel 'authorised'? Who does the authorisation, Franco?

Authorised channel.
Authorised by the maker.

Well that was my point completely. My understanding is that Amazon will be a distributor, warehouser and merchant. they do not have to purchase their product through an 'authorised channel'. I can already circumvent the system and buy scarpa boots, for example, direct from Amazon USA cheaper than I can in Australia. how well are htese 'authorised channels' working for Australian retailers?

Tarptent is not the same as paddy pallin on-selling scarpa boots. If it was, Henry Shires would sell to you alone and Paddy Pallin, for example, would have to buy Tarptents from you as the distributor and onsell it in their shop. Because Henry has an online model in America he would have to close this access to buyers (includinng domestic online sales) in order for this model to work.


If what you are saying is still true of the commercial model in Australia, Paddy Pallin (for example) have to buy from an 'authorised channel' in Australia (i.e. a distributor) which is another commercial layer with a bottom line of their own. So any scarpa boots they buy come from an Australian distributor that purchases from , or on behalf of, Scarpa in Italy.

Amazon will come into australia having already twisted scarpa's arm for the best deal and sell direct to Australian customers without the need to purchase from the distributor. They could even use their existing infrastructure in America which is commercially viable - I know that because I buy from Amazon USA regularly.

My understanding of their business model is that they are their own warehouse, distributor and retailer.

How can Paddy Pallin compete with that? Online sales and companies like Amazon have forced Australian retailers into a position where the only possible way that they can compete is if they become distributors and retailers.

Right now I could import bike equipment from Wiggle.com in the UK sell it from my house for cheaper than a local bike shop could sell it and I could make a profit. There is something that prevents bike shops from doing the same and I assume that bushwalking shops are in the same boat.

i presume that if I could buy direct from Scarpa I could also sell boots cheaper from my house than paddy pallin can. Perhaps bushwalk.com could have its own online shop and do the same.

is there any legislation to prevent this occurring or just out of date commercial agreement between manufacturers and Australian distributors?

[GPSGuided]

Lots of assumptions and not knowing what potential deals Amazon may or may not make with the various brands prior and post entry, much of these are hypothetical. We just need to wait and see how much impact Amazon makes.

[Franco]

As far as I know it is a commercial agreement but might be legislation (for consumer protection) for goods like cars that do need a readily available backup service.

Funny you mention Wiggle because one of the local importers declined taking a brand on because he was able to buy individual pairs from Wiggle for less than importing bulk stock from the manufacturer.
From that you can work out that Wiggle sells a lot more by itself than the Australia market could sustain.

BTW, I mentioned before that ( 10 years ago) buying 2 million of stock a year from a photographic brand still was not enough to get those items for less than I was able to buy one at a time from B&H in New York.
However B&H was turning over their products , from one warehouse, more than all of Australia combined.
Yet, many here thought we were ripping them off for charging more .

[Mark F]

Right now I could import bike equipment from Wiggle.com in the UK sell it from my house for cheaper than a local bike shop could sell it and I could make a profit. There is something that prevents bike shops from doing the same and I assume that bushwalking shops are in the same boat.

i presume that if I could buy direct from Scarpa I could also sell boots cheaper from my house than paddy pallin can. Perhaps bushwalk.com could have its own online shop and do the same.

is there any legislation to prevent this occurring or just out of date commercial agreement between manufacturers and Australian distributors?

What you are forgetting is the markup needed to maintain a bricks and mortar store. I expect Australian bike shops buy their stock cheaper than you or I can buy from Wiggle but are adding 80+% to the cost to get to their retail price. Wiggle is no doubt paying less than the Australian bike shops due to the volume they sell but not by very much and are also adding a smaller margin as they don't have to maintain a physical retail presence - turnover is the name of the game.

No legislation, just manufacturers dividing up the market geographically in the expectation of it being beneficial to have a local representative look after their interests, returns and local marketing. It was more relevant in the past when shops ordered as stocks ran low and the wholesaler held stock but now most goods are block ordered months in advance with the wholesaler holding reserve little stock.

Other reasons for using a distributor/wholesaler - consolidated shipping is cheaper when all product for Australia is sent to a single location for distribution. No problems with bad debts or slow payment. No dealing with lots of very small orders. ...

PS - no legislation on cars other than they need to comply with Australian Design Rules.

[Aushiker]

Wiggle is no doubt paying less than the Australian bike shops due to the volume they sell but not by very much and are also adding a smaller margin as they don't have to maintain a physical retail presence - turnover is the name of the game.

Wiggle is also now warehousing from one point (or will be soon) and is selling via Wiggle (including Wiggle Australia) and Chain Reaction Cycles [CRC] and likely through Bike24.com [Germany] as well soon (they own CRC and are attempting to purchase Bike24.com).

[Mark F]

I have bought a couple of things from Wiggle in June/July and had to return one item for replacement. This was posted to an address in Sydney and then sent back to the UK for processing the replacement. All items originated from the UK. Looking though the emails I have email from a .com, .co.uk and a .com.au domains.

[Aushiker]

I have bought a couple of things from Wiggle in June/July and had to return one item for replacement. This was posted to an address in Sydney and then sent back to the UK for processing the replacement. All items originated from the UK. Looking though the emails I have email from a .com, .co.uk and a .com.au domains.

Yes that has been their mod operandi for a number of years now. There is a NZ bicycle parts retailer that does something similar as well.