Alt-BEAM Archive

Message #13654



To: beam@sgiblab.sgi.com, Ben Hitchcock beh01@uow.edu.au
From: Peter Hamer kits@robotoz.com.au
Date: Wed, 19 Apr 2000 10:40:33 +0800
Subject: Re: Costings in Australia


Hi Ben and all,

With Ben's rant and slam I do feel quite justified to have some defence on the
list. Normally I would reply personally, but I can not let Ben's comments
pervade the list with lack of understanding of price setting etc. Please hit the
delete button if you are not interested in the Australian economy.

Let it be known that the prices we have to charge are a factor of:

What we can buy products for in reasonable quanties from suppliers like
Solarbotics, Digikey etc
The exchange rate from USD to AUD. (very poor at the moment)
Most of the products we import into the country attract 5% Customs duty and 22%
Australian Sales Tax (based on a 20% uplifted wholesale cost), because we buy in
bulk we cannot circumvent customs and the ATO like Ben does.

So a few figures for you:

Buy a product at $10 USD.
Convert to AUD at 0.60c = $16.67 AUD
5% Customs Duty = 0.83c = $17.50
Now uplift that price by 20% = $21.04 and mulitply by 22% = $4.62 = the
Wholesale Sales Tax
Now add the $4.62 to the $17.50 = $22.12

So the landed cost (without cost of shipping (varies) and importation fee $35)
will equal $22.13 AUD.

And what does that leave us to support the costs of business. So do a bit of
economics and you see that we are essentially providing a cost neutral service
and not running a business.

Now come July 1 when we move to a GST things will change and hopefully prices
can be lower because of the getting rid of the 22% Wholesale tax (although the
government has decided to now include cost of shipping etc into the things
they will charge 10% GST on) in determining the landed cost.

So how do people get things in cheaper than that? It is because you buy in small
quantities and do not pay customs duty nor sales tax - although if you are
ordering items worth more than $250 AUD customs should pick that up and you
should be paying. Customs and the Government do not support small business and
because of that customers end up not supporting small business. It is a viscious
circle. In fact if you do get to have to pay customs duty and sales tax your
$150AUD woud convert to $200!! - so our prices are purely a factor of the
government making more out of small business than what small business can ever
hope to achieve!!

Of interest is that with the poor exchange rate at present and that exports do
not attract Australian Sales Tax that international customers find it cheaper to
buy from us than elsewhere. So at least I'm doing a bit to help our balance of
payments.

I am quite happy to receive feedback and suggestions - it doesn't mean they will
all be implemented. But Ben your public slam really does make me feel sour .
Sure I'd like to have a secure server for instant shopping lists, but I got to
make that decision that the large cost will be offset by sales.

Regards

Peter
kits@robotoz.com.au
www.robotoz.com.au

> Because for me, anyway, you cost too much. It's as simple as that.
> Sorry for being
> harsh, but as far as I'm concerned if I can ship something into the
> country for less than it takes to buy it here, then I'll do that.
> Sorry about the rant but if you don't know how the consumer feels then you
> can't change. I assume you don't want to go broke :-)
>

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