The Tanking Dollar
 

With the AUD effectively tanking of late, getting anything online from overseas is becoming more and more expensive. A 120A X-Car ESC that Hobbyking sells for $33 USD has gone from $40ish landed incl Freight to closer to $60.

How is this affecting your hobby spend? Are you re-acquainting yourself with the Local Stores or are you just sucking up the effective price rise? Is it making our local guys more competitive from a price point at least until the exchange rate cost is pushed through via the wholesaler?

Hoping to spark a bit of intelligent discussion here :)

It's definitely slowed my overseas online shopping. Looking more through the second hand threads and forums looking to buy second hand rollers for parts to keep my hobby alive. Things like liquid mask I was buying from overseas for $40 to my door are now costing that in just shipping. Anyone know a good place to buy liquid mask from here in aus?

Strong AUD$ (before)=

Retail store
- wholesale cost of stock from OS supplier = $6.00
- freight = $1.00
- overheads/profit for the store = $3.00
= $10.00 + 10% GST = $11.00

Customer Direct from OS supplier
- retail cost from OS supplier = $7.00
- postage = $2.00
= $9.00


With the weak AUD$ (now)=

Retail store
- wholesale cost of stock from OS supplier= $8.00
- freight = $1.00
- overhead/profit for the store = $3.00
= $12.00 + 10% GST = $13.20

Customer Direct from OS supplier
- retail cost from OS supplier = $9.00
- postage = $2.50
= $11.50


Strong AUD$
Store = $11.00
Purchased from OS = $9.00
Difference = $2.00

Weak AUD$
Store = $13.20
Purchased from OS = $11.50
Difference = $1.70



As retailer’s product is also purchased from overseas manufacturers they are also impacted by the AUD$ . . . .

Until GST is charged on minor 'imports', local retailers are still going to be more expensive (or at least there will continue to be a gap between retail price in Aust, and product purchased direct from overseas).

HOWEVER

The local store will be increasing the price of imported nitro fuel . . . nitro fuel made locally from local ingredients SHOULD remain at the same cost and hence give locally made product a market advantage.



The good news is, that as soon as the AUD$ improves the local stores will reduce their prices, not their profit margin (yeah right!)

Oh, and don’t get me wrong, wherever possible I support local business (certainly over the large corporate chains!), however, I also see the irony when a business owner complains to me that his customers are sourcing their product directly from overseas – then hops in his Mercedes Benz, and drives to his holiday home on the coast to spend the weekend on his yacht. (I'm not making that up - that is a literal example)

I'm a bad impulse buyer. There's nothing better then walking into a hobby shop to buy something small you need and come back out with a whole bag of goodies. The guys behind the counter still need to make a bit of coin so I don't see any real point buying overseas when there isn't all that much of a difference buying local.

True but if a store has bought stock when the AUD was higher, the price is based on the wholesale price at that time, so assuming they haven't upped the price to reflect a theoretically higher wholesale cost which they haven't incurred on that item yet, then it is more competitively priced in comparison to overseas at the lower AUD rate.

I'm at my worst when something breaks. I want to fix it yesterday, even if I have no plans to run the car for even a month or so, if I can get the part off the shelf locally and quickly I will even at a higher cost as it satisfies the OCD part of me that can't handle a broken item on the shelf.

If they have to order it in, then I go purely on price point as the convenience factor is no longer there.

I understand what you are saying . . . it depends on the store's pricing/accounting model and how sophisticated they are.

For example, you can purchase petrol for your Ford in the morning at one price, and at the end of the day, at the same petrol station, you will pay a different price for the same stock of fuel! This is because the value of that stock/fuel has changed.


Yes, in some instances a store will not adjust the price until they have repurchased the stock. Consider though, they are selling something that cost them $5.00 for $6.00 . . . then they have to pay $7.00 to replace that item . . .

The additional outlay to purchase stock to sell may kill the businesses cash flow.

$6.00 is coming in in sales, and it is costing them $7.00 to restock the item!

More money is going out to restock, than is comming in in sales . . .



A sophisticated trader will effect the price increases immediately to cover the expense of replacing the stock.

Depends on the business too . . .

When I go down the pub, they remember my name, without me asking they put my drink on the bar when I walk through the door, and every now and then, they throw me a free round to show that they appreciate my business - Ild rather pay $5.00 for a beer at the pub and support that business, than pay $2.50 and drink at home . . .


Just depends on what you are buying - Quality item? Warranty? Service? Convenience? If your local store is not selling what you want to buy, you will go elsewhere - even overseas!


People will pay more if the store is selling what the customer wants - look at my example of the beer from a pub . . .


Ya know what? I'ld feel more guilty about sourcing my product from OS if the guy from my prefered hobby store (at which I have spent $1,000s) would just remember my name!

Every Australian Hobby shop that I buy from increased their pricing to cover the cost at least a month or two ago, so it's still cheaper to order from overseas. I'm also a convenience guy and will pay the extra to source things locally if they're in stock.

Some things I buy local, if they have it in stock and if the "WTF are you charging that much for?" factor isn't 2x the overseas price.

Ironically the only item I'm saving up for is something I can only get internationally, so I guess I'm stuck praying we don't head back to the 60 cent mark before I've got enough cash :(

I like my TRF stuff and had no choice but to get it OS.

Now that prices are escalating I'm more likely to change brands and by something like AE or TLR locally.

You spelt Serpent wrong ;)

Here in Sydney local hobby stores DO NOT deserve your business, twice in the last month two different large and established stores have had stock in their system and both have said to me "that part is probably stored in a box and they couldn't be bothered to check for it". Really some aussies run such unsophisticated business models ..... it's a real joke. I mostly buy from asia and have learned to be patient.

I'm waiting for an aussies run business that has stock, that shows correct stock levels on the web and is prepared to offer customer service and doesn't charge twice as much!

We shouldn't accept poor service and be charged over the odds ..... it just breeds complacency.

+1

I keep stocks of parts so if I break something I have a replacement - when I use my spare, I order a replacement.

If I order something from Futaba in Japan, it takes 5 days to arrive on my doorstep.