China - never a dull moment!

[daft009]

New fridge the other day: Chinese brand $759, Japanese brand, $929. Latter comes with latest technology and 5 year warranty compared to just 2 years and older technology in the chinese version.

just be careful, the brand might be japanese & it might also say "made in japan" but doesnt mean all the parts inside are from japan

 

[tgh]

the brand might be japanese...

I had a very heavy awakening about "whats inside" a while back.
My Japanese made tractor suffered a transmission conniption caused by a failed bearing.
Image my irritation to find that the bearing came from ……there…...points….
My irritation became more like rage when I discovered that almost every ball bearing made in the world today comes from…there...
I found eventually found bearing made in Taiwan and used that.

Now in the past there were bearings and bearings and some (European and Japanese) manufacturers had a better name than others…no more ... all gone….(almost)
Three years ago when this happened there was no way to differentiate a rubbish Chinese bearing from a quality Chinese bearing.

The reality is that the Chinese make both quality engineered products and junk …problem is that we have no idea whats inside our frig/car/tractor/aeroplane….

 

[Cruiser Elite]

If you don't mind explaining, what are the drivers behind that multiple?

Anybody can access alibaba - just search for any product that takes your fancy - check the USD price at source and then extrapolate that to AU market place.

Multitude of drivers - exchange rate / freight and logistics / margins just to name a few

 

[p--and--t]

Anybody can access alibaba - just search for any product that takes your fancy - check the USD price at source and then extrapolate that to AU market place.

Yes I've done that a few times and noted the difference

Multitude of drivers - exchange rate / freight and logistics / margins just to name a few

That's the bit I've tried to rationalise.

Exchange rate +30%,
Freight - maybe smaller volumes ?+15%? (compared to USA)
GST +10%.

Never figured out the +300-400% overall. Surely there isn't that great a difference in retail margins? Or maybe there is?

 

[Cruiser Elite]

These 28 Beautiful Places You Should Visit in China!

 

[Cruiser Elite]

Never figured out the +300-400% overall. Surely there isn't that great a difference in retail margins? Or maybe there is?

Importer / wholesaler / distributor / agents / marketing / advertising / returns - of course if perceived profit potential is way attractive it's free for anybody to play

 

[mushez]

Never figured out the +300-400% overall. Surely there isn't that great a difference in retail margins? Or maybe there is?

Just like pawn stars - no one goes in and pays the ticket price. A lot in retail is the same.

Being a Kiwi - with a supermarket background, in NZ 87% of what is sold in a supermarket is because it is on sale that week. Only 13% is ever sold at full ticket price. People don't buy unless they see a "Sale" ticket. If they think they are getting a discount 30% or more, they hoard it. As a supermarket manager, I knew the 6 weekly cycle and when everything was due to come back on sale in the next 6 week period.

Pricing and margins in more businesses than not, factor in a list ticket price, that is going to be discounted down to what they expect to sell the unit for with discount.

300-400% is nothing when it comes to margins you need to have to cover the bills and factor in your discounted sales price that you will move most units at.

I have a product that costs me $0.28 USD to buy, and I sell for $3.40 Australian - 1214% mark up from cost in USD to AUD with GST. I don't stress when I sell 70% of it a year with my once a year 50% off sale. I sell more and make more profit than selling it for $2 and not putting it on sale.

I have a product that costs me $8 USD to buy, and sell for $47 AUD. 588% mark up. We sell 1,000 of them a year - and normally 300-400 in the annual 50% off sale which is first cab off the rank in July. We ran our 50% off sale on them a few weeks ago, and sold 700 units.

I sell more when I have margin that allows 50% off sales, so I don't have a single product without 250% margin on it when all costs and all exchange rates are taken into consideration. 300% & 350% are more common than 250%

Factor in Exchange rate - my 250% is 350%. My 350% is 510%

Furthermore, I was audited by the ATO in 2018 - and they were shocked at how low our margins were and had a lot of questions about why I didn't have higher margins. But it answered to them why we paid no tax and had next to no profit.

 

[p--and--t]

Just like pawn stars - no one goes in and pays the ticket price. A lot in retail is the same.

Being a Kiwi - with a supermarket background, in NZ 87% of what is sold in a supermarket is because it is on sale that week. Only 13% is ever sold at full ticket price. People don't buy unless they see a "Sale" ticket. If they think they are getting a discount 30% or more, they hoard it. As a supermarket manager, I knew the 6 weekly cycle and when everything was due to come back on sale in the next 6 week period.

Pricing and margins in more businesses than not, factor in a list ticket price, that is going to be discounted down to what they expect to sell the unit for with discount.

300-400% is nothing when it comes to margins you need to have to cover the bills and factor in your discounted sales price that you will move most units at.

I have a product that costs me $0.28 USD to buy, and I sell for $3.40 Australian - 1214% mark up from cost in USD to AUD with GST. I don't stress when I sell 70% of it a year with my once a year 50% off sale. I sell more and make more profit than selling it for $2 and not putting it on sale.

I have a product that costs me $8 USD to buy, and sell for $47 AUD. 588% mark up. We sell 1,000 of them a year - and normally 300-400 in the annual 50% off sale which is first cab off the rank in July. We ran our 50% off sale on them a few weeks ago, and sold 700 units.

I sell more when I have margin that allows 50% off sales, so I don't have a single product without 250% margin on it when all costs and all exchange rates are taken into consideration. 300% & 350% are more common than 250%

Factor in Exchange rate - my 250% is 350%. My 350% is 510%

Furthermore, I was audited by the ATO in 2018 - and they were shocked at how low our margins were and had a lot of questions about why I didn't have higher margins. But it answered to them why we paid no tax and had next to no profit.

Thank-you for your detailed reply. Much appreciated. I should have contemplated more the concept of ticket pricing versus actual sale price (a bit like hotels - I've never to my knowledge paid rack rate).

I do recall many decades ago a relative telling me Myers were landing up market fractional fit shirts for $1 and retailing them for $27 (ticket price). But things are a lot more competitive nowadays.

 

[mushez]

Thank-you for your detailed reply. Much appreciated. I should have contemplated more the concept of ticket pricing versus actual sale price (a bit like hotels - I've never to my knowledge paid rack rate).

I do recall many decades ago a relative telling me Myers were landing up market fractional fit shirts for $1 and retailing them for $27 (ticket price). But things are a lot more competitive nowadays.

I don't expect with those beds that you wouldn't ticket price them at 800% to discount 30-50% to get your 400% margin in actual sales price in your hand.

I only do mail order/internet sales and ship. So that is how my mind is screwed on. I see those beds, and go - geezzzz - they are going to cost $600 to ship, and even if I offered them at $4k plus $600 shipping - no one will buy them.

But if I sold them for $6k and free shipping, I would sell more, and make more profit even if I sold one to Bundaberg and had to pay $1,400 in shipping to ship that with Bundy Freight - or $1,800 to ship one to Tasmanina with Tas Freight.

No one pays more than 10% in shipping than the item is worth. If you can do your rates to do free shipping and charge shipping in the price of the product - you sell 250% more. Faced with 2 sellers, one at $6k and free shipping vrs $4k and $600 shipping - the $6k and free shipping person would sell 10 times more than the other.

Free shipping is never free.

I have sold more by lifting the product price - simply because it shifts the product price to shipping cost ratio to less than 10% than being over. No one complains about 5% or less in shipping to product value ratio.

 

[moa999]

Interesting retail theory mushez.
Everyone likes a bargain, even if it's only a perceived one.

Take it from the examples that you have goods in a wide range of price points.

 

[Cruiser Elite]

It may be raining in China BUT LIFE GOES ON

 

[daft009]

It may be raining in China BUT LIFE GOES ON

in excellent spirits, great to see!

EDIT: Every monsoon in Calcutta/India where I grew up it used to flood and we too used to goto school in similar conditions. it was a normal part of life. yes our apartment never got flooded as we were on the 4th floor so that was lucky

 

[Cruiser Elite]

Another Beijing institution bites the dust - VICS to close. Just up the road from where The Den was - so many fabulous late nights over the years.

Beijing just ain’t what she used to be - HRC, Coco Banana, The Den, Hollywood, Chocolate, The Pig and now Vics all dead and buried.

 

[cove]

We struggled last year with getting products from China when we had an uptick in sales. We airfreighted a couple of items and that hurt but the retailers had stock on their shelves.
This year we have taken earlier deliveries.

 

[p--and--t]

Another Beijing institution bites the dust - VICS to close. Just up the road from where The Den was - so many fabulous late nights over the years.

Beijing just ain’t what she used to be - HRC, Coco Banana, The Den, Hollywood, Chocolate, The Pig and now Vics all dead and buried.

IIRC, I'm pretty certain I visited that place in 2006. Huge multi level venue heaving inside with loud music, lots of young people that obviously had rich mommys & daddys from the cars outside, the designer wear inside and copious Yuan to spend on grog and table serve treats.

 

[Cruiser Elite]

Yes very big but not so many levels - it was inside Workers Stadium compound - yes young people haven - downstairs was foreigner HQ central - extremely - popular with young expat crowd but they always made us old expats welcome too - that is if your ears could tolerate the music - alcohol does amazing things though huh?

 

[MEL_Traveller]

Another Beijing institution bites the dust - VICS to close. Just up the road from where The Den was - so many fabulous late nights over the years.

Beijing just ain’t what she used to be - HRC, Coco Banana, The Den, Hollywood, Chocolate, The Pig and now Vics all dead and buried.

In Shanghai the last real season was probably in 2013, maybe 2014. So many things had already started to change and close around that time. And people leave.

I wonder whether it matters anyway? I wonder how much longer anyone will be able to travel there anyway (DFAT 'do not travel'?)

 

[seanpodge]

Many may be aware Australian bicycle wholesalers are having horrendous problems sourcing sufficient stock to meet demand – and TEBCO is well and truly experiencing similar problems.

Our biggest hurdle is our manufacturers just cannot access sufficient components in a timely manner to build our Orders. Shimano, Suntour and many other component suppliers just cannot keep up with demand – but our biggest problem is frame supply – frame manufacturers are TOTALLY SWAMPED with Orders and are all working 24/7 to attempt to supply but there is a limit to supply capacity.

Australia is a miniscule market on the world stage and given the unprecedented world-wide demand for small electric personal transportation devices then our supply difficulties may not disappear overnight. We are working very hard to minimize future supply delays by ordering forward where possible.

In regard to frame supply – this is the type of thing we are up against – Mertuan which is a huge logistics Company in China have Ordered 3 million electric bicycles for short haul Courier deliveries – pictured here are the first 100,000 of these produced by Sunry factory in Wuxi.

Add to this the huge upsurge in ‘Share Bike’ requirements right across China in cities large and small to transport 1.4bn people to and from work / in and around crowded cities for day to day activities - when pre Covid 19 this huge population base was heavily dependant on grossly over crowded public transport which that population base is now increasingly avoiding.

Our latest intel is that the 6 biggest bicycle manufacturing companies in China combined will produce 40 million electric bicycles in the next 12 months – just a staggering figure.View attachment 222902View attachment 222903View attachment 222904View attachment 222905View attachment 222906

Have seen some of these on the streets of Harbin in the last week. They're being used for a bikeshare program. Still not as plentiful as Hellobikes here though.

Also wondering how well the batteries are made on those. Will they survive sitting idle for hours/days on end during a Harbin winter?

 

[Cruiser Elite]

How will they survive? If Lithium batteries they hate frozen temperatures - if Lead Acid they also hate minus temperatures - wouldn't be pretty either way

 

[seanpodge]

How will they survive? If Lithium batteries they hate frozen temperatures - if Lead Acid they also hate minus temperatures - wouldn't be pretty either way

In the previous iterations of bike sharing in Harbin, the companies have taken the (convential) bicycles off the streets, presumably to fly south for the winter. Wonder if they'll be gone by about November here too.

That said, the delivery guys will use those types of bikes year round, but of course they can take the battery indoors between shifts. The technology may have improved for lithium too. I remember my old iPhone 4 regularly deciding that it had had enough of the cold and only turning back on when I have held it against my chest for a few minutes. My current iPhone 7(?) wasn't so work shy last winter.

Here are 1 and a half of them in the wild near home. Not sure why the pedals are missing. I wish it was the depths of winter now. Just hot and humid at the minute.