More On Price Tags
In the market place for anything we have a sticker price and time and occasion willing we haggle and negotiate these things lower. What people don’t seem to think too deeply about is what goes into that sticker price. The question that comes up about the retail sector in Australia for example is “why are their prices so expensive?”
The short answer is that they are ‘uncompetitive’ but this phrase dismisses quite a lot of factors that contribute to it. For instance, retailers in Australian capital cities pay the highest rent for their spaces in any city in the world except maybe New York City. the ones that are situated away from the cities have the tyranny of distance to pay for as well as the cost of having to pay for smaller orders which are more expensive than larger orders.
Indeed, there are so many little things that contribute to the price tag that are not immediately obvious but explains quite a bit. For a business to be around it has to have insurances in place, and all the people involved have to be covered by Work Cover. Everything and everybody that moves in our economy is covered by these insurances – and believe me they can be expensive – but it guarantees that goods are handled safely. We also have standards for certain things like fresh foods such as HACCP which is there to guarantee food safety but also adds cost to ensure this safety. All over our economy there are equivalent measures put in place to protect people and consumers; and it all adds up.
Part of the reason why parts of South East Asia are so inexpensive to do business is because they have none of these kinds of things in place. You can find all sorts of people willing to take extraordinary risks to earn a quid, which is the polar opposite of what we have here. There are captains of industry who think this is a great thing, and that our workers in Australia are less ‘competitive’ because we are too well protected. I don’t necessarily agree with that, but you can see that part of living in a mature-economy part of the world is that risks and costs are spread across everything making everything more expensive.
None of that I would imagine makes it past the brain of the person who complains about the price of things in Australia, but there is one advantage of shopping from a retailer in Australia and that is the fact that when you make your exchange, you have the product in your hot little hand on the spot. The inherent risk of on-line shopping is always going to be the fact that you’re sending your money to somebody you will never meet and then you have to wait for postal services to hand you your goods. Sometimes, that turns out to be a little more risky than you thought.