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!)