Strong Aussie dollar but where are the benefits?

[aussiebasshero]

So I'm trying to cure GAS for my next amp upgrade (which will hopefully be by the end of the year) and I've been doing some prospective amp research (looking at getting either a 500W micro head + 2x10 or a hybrid tube/SS like the Fender TB600) So, on all the amps/cab combos I've seen in the US (GC, Musician's Friend etc) they are nearly 50% cheaper than the cheapest Australian vendor's price. Is it just me or am I missing some part of the equation because it seems that someone (either the manufacturer or vendor, although unlikely the latter) are making a MASSIVE mark up between the unit leaving the factory and arriving down under.

For example, on MF you can buy a brand new Fender TB600 for $1000; the cheapest price I've seen in Australia is $1750: The Bass Centre - Fender Bass Amplification

So what am I missing? Are there hidden costs that I'm ignorant towards or should I be justified in being a little annoyed that the strong Aussie dollar isn't reaping any benefits?

Ps although this sounds a little ranty I am actually curious what people think and if there are ways around the steep price increase.

[OzzyGreg]

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I think a large percentage of the mark-up can be associated with both Import Duty and shipping costs.

The rest is just the importer and subsequent dealer profits, both wanting to get their own slice of the pie. (Fair enough I guess.)

I'm in a similar position myself, ready to buy a new rig soon.
I reckon I'll be approaching the Aussie retailers with the prices I can get OS and seeing what they can do.
Of course they will hit me with the old: "But what about warranty" spiel, but the I'll be weighing off the difference between taking a punt on the stuff breaking down and saving a s.....tload of money!

I can fairly confidently predict that I'll be buying offshore!

I reckon we need to factor in any possible Import Duty before parting with the cash mind you.

Greg

[aussiebasshero]

Ok let's take the Fender TB600 as a benchmark. Surely the $750 difference (even more when you convert the US price into AUD) isn't fully explained by import costs/shipping? I mean if I was being conservative I'd say that'd make up less than half that cost. I wish we could have an honest shop-owner's perspective because I realise they can't make their profit margin too much otherwise they won't be in business. I'm very close to considering buying from the US and getting the amp sent to a tech so it can run on 240V – although, if it breaks then you're up s*** creek without a paddle!

[dincz]

Not so good in Europe either - Thomann (Germany) have it for 1420AUD.

[Dubista]

Don't forget, the big companies hold shipping restrictions so no Authorised Dealers of brands like Fender are allowed to ship outside their country.

On the bright side though, prices have been on the decline. American Standard Fender basses used to be $2000+ AUD but now they're around $1600~ too bad Lakland Skylines are still around $1800~ though, but luckily there aren't shipping restrictions on those and they are cheaper to buy offshore even AFTER shipping and duties.

[vin*tone]

It's a sad situation when you can buy a bass made next door in INDONESIA cheaper after it has travelled around the world and back again.

I strongly recommend you check out this thread... there's some good tips here:
OzBassForum • View topic - International shipping tips, advice n stuff

A couple of points....

- That Fender unit was probably imported into the country when the Au was .80c US. So there is a bit of lag on prices.

- We buy through a chain of people including a distributor who have a markup themselves.

- yes there is GST and duty which distributors need to pay as they buy in bulk but an individual purchaser may not.

- Real estate in Australia is RIDICULOUSLY expensive. You may think that has nothing to do with it but imagine how much the Bass Centre is paying in rent on a South Melbourne shop. And of course the fine young gents who work there have gotta eat.

After all that - yes it may be worth your while importing but be selective about the brand of amp you buy. Some are easy to convert to 240V and some are stupidly hard.

[Dubista]

I've only read the 1st post, but I've thought that GST doesn't apply to solid body electric basses?

I've also thought that general rule of thumb when importing basses from the US over $1000 AUD in value was

(bass)+10% (import duty) + shipping

can you help me straighten this out?

[aussiebasshero]

Originally Posted by Dubista

I've only read the 1st post, but I've thought that GST doesn't apply to solid body electric basses?

I've also thought that general rule of thumb when importing basses from the US over $1000 AUD in value was

(bass)+10% (import duty) + shipping

can you help me straighten this out?

any goods imported that are over $1000 AUD are subjected to 10% GST.

[funkydanbass]

Originally Posted by Dubista

I've only read the 1st post, but I've thought that GST doesn't apply to solid body electric basses?

I've also thought that general rule of thumb when importing basses from the US over $1000 AUD in value was

(bass)+10% (import duty) + shipping

can you help me straighten this out?

Solid Body basses avoid an extra duty, not the GST. As previously mentioned anything over $1000 attracts GST.

[BassNeo]

We get the same thing here in Canada, and we share a border with the US. Right now out dollar is on par with the US, but we still pay anywhere from 30% - 90% more than the US price.

The lag in inventory is one factor. The amp you are pricing might have been purchased when the US dollar was higher and they still have to make some profit on it. In Canada, there is duty levied on all goods coming into the country (despite a free trade agreement with the US and Mexico - don't get me started) so that adds more as well.

Having said that, I still see prices considerably higher here. Fortunately I live a 30 minute drive from the border and an hour and change from a Guitar Centre. Even if I pay the duty at the border coming back I'm still money in pocket. As far as warranty, even if something goes wrong I'm likely going to break even with getting it fixed.

Does it hurt the local economy? Sure. However I'd be willing to pay an extra 15 - 20% above US prices (they're still paying rent and employees) to save the hassle, but someone is making a lot of money off my back and hard earned money.

[funkydanbass]

Dubista, you are right in observing the price discrepancy and it would be fair to say that the Australian importer/retail system will need to change drastically if local retailers have a chance of competing with the global online market in the future.

The thing that you have to keep in mind is that there are many costs that we as consumers can bypass when buying in small volume ie. GST, extra duty.

However, one of the biggest factors that people don't often talk about is buying power. Australia's music instrument buying public is probably on the same scale as one, (or a couple), US states. In any sector of wholesale/retail you can obtain a fairly substantial discount from normal 'trade price' when buying in bulk.

Think about how many Fender products Musicians Friend would buy direct from Fender USA and compare that to the Volume that Fender Australia would be importing, and subsequently the volume that each retail outlet or chain would be purchasing!

Basically, the cost price per unit would be significantly lower in the US. Add the fact most major brands are imported by a wholesaler, who needs to make a profit before setting an Australian RRP with enough margin for the retailer to make a profit.

It is a nasty situation, but that is the current Australian model. I predict that the only way Australian retailers will be able to compete will be if the import directly themselvs and forgo the importer margin.

Anyway, here's the catch 22... If all of the Australian consumers that bought online bought locally, Australian retailers and importers would be able to purchase in greater volume at greater discount... thus being able to reduce the Australian RRP.

I know that as an individual you probably don't care. Who wouldn't want to save $500+?
Worth thinking about tho...

[aussiebasshero]

Originally Posted by BassNeo

We get the same thing here in Canada, and we share a border with the US. Right now out dollar is on par with the US, but we still pay anywhere from 30% - 90% more than the US price.

You're lucky you can drive over the border! But what I don't understand is the mentality of shop owners in Australia - of course they know that the same product in the US sells for a significant amount less, to the point that a portion of its target market back home are willing to take the risk of importing a US item and nullifying the warranty. I guess it all depends on how many units they move and how much profit they make per unit. Does anyone know the rough profit margin a retailer would make on amps? (excluding GC/MF)

I guess there are more people internationally that are willing to cop the price increase on the chin

[Mr. Foxen]

Stock was bought at a different exchange rate, and they still have to make their money back. Maybe importing secondhand is the way to go.

[vin*tone]

Originally Posted by Dubista

I've only read the 1st post, but I've thought that GST doesn't apply to solid body electric basses?

I think it's duty actually. But yeah I should probably amend that post when I find out.

I've also thought that general rule of thumb when importing basses from the US over $1000 AUD in value was

(bass)+10% (import duty) + shipping

can you help me straighten this out?

It's slightly confusing.... The GST + duty kicks in if the value of the item is over $1000Au, but the calculation is done on the total including shipping. eg: if you buy an amp worth $950 but your shipping is $150 you won't need to pay duty + GST even though the total cost is $1100. Make sense?

[Dubista]

So if the bass in question is over $1000 Aud the equation becomes

(bass+shipping+duty+customs)+10% GST?

What if the bass is american made? Or if the country of Origin is America?

What I mean is:
in what circumstance does the 5% duty not apply under the FTA?

When the bass is shipped from the USA regardless of country of manufacture? Or only when the bass is made in the USA?

Sorry if I seem a bit thick.

P.S. Sorry for the derail OP

[Longhair]

When ever possible, I will buy from the USA, have it shipped to the Netherlands and still save money than buying it locally (NL, DE, UK) even after paying a 19% import duty

[fingerbun]

Originally Posted by vin*tone

I think it's duty actually. But yeah I should probably amend that post when I find out.


It's slightly confusing.... The GST + duty kicks in if the value of the item is over $1000Au, but the calculation is done on the total including shipping. eg: if you buy an amp worth $950 but your shipping is $150 you won't need to pay duty + GST even though the total cost is $1100. Make sense?

If buying new from an Australian retailer I believe GST (sales tax for those of you overseas) applies to every purchase. The $1,000 limit only applies if you buy overseas and import it yourself, and I think then maybe only if it's new?

[fingerbun]

Originally Posted by Dubista

So if the bass in question is over $1000 Aud the equation becomes

(bass+shipping+duty+customs)+10% GST?

What if the bass is american made? Or if the country of Origin is America?

What I mean is:
in what circumstance does the 5% duty not apply under the FTA?

When the bass is shipped from the USA regardless of country of manufacture? Or only when the bass is made in the USA?

Sorry if I seem a bit thick.

P.S. Sorry for the derail OP

I know when I brought my Rick in from the US second hand no duty was payable. I think it was due to the special status of the US but don't remember the details. It certainly wasn't that the bass was under $1K...I wish.

You see wildly varying quotes for shipment. UPS charged $200 to bring my bass across, and did a fine job.


Not sure I'd get into importing anything that plugs into the mains without some thought. Plus I would expect the weight of speaker boxes to drive up shipping cost and make them a less attractive import, but maybe I am wrong. I've been using my old Peavey head (a 1980-ish Mk iii) at blues gigs lately. It's lasted this long, it'll last a bit longer.

[aussiebasshero]

Originally Posted by fingerbun

Not sure I'd get into importing anything that plugs into the mains without some thought.

Apparently all that needs to be changed is a fuse and then you can run most new amps on 240V. I think GB amps in particular have a universal power input that auto-detects the voltage coming from the mains. It'd just be a question of getting the right cord etc. Also the fact that warranty will be voided, but I think if the saving was that great it'd be well worth it. Shipping wouldn't be ridiculous, especially if you bought a micro head.

[vin*tone]

Most of the micro heads with smps transformers are good to go. GB Shuttle, Streamliner, TC Electronics RH450, 750, Aguilar TH500. Ampeg Micro VR.

A lot of the older ones can be internally rewired too but takes a bit of research: Aguilar AG500, DB750, Ampeg Pro series, Mesa 400+, Eden WT series..... etc..

*I used to import and resell to fund my GAS problem. Not so much any more - prices in Australia have actually come down quite a bit in the last couple of years.