04 September 2007

How do prices like these make commercial sense?

Australia (AU), the land down under. Great place, good climate, excellent lifestyle… and very high standard of living (in Economics terms).

This is a great place and I love it. I love the chill of winter when the sun cowers behind the thick cotton like clouds. What I don’t love are the high prices - prices are high for just about everything.

General Prices
I have found that the prices for food, sundry items, furniture and a host of other things needed for daily living are roughly 30% higher than in Singapore (SG). My colleagues, WD and VL, respectively buy Remote Control car accessories and perfumes direct from the US. They refuse to buy them locally because it is cheaper to buy from the US, even with the cost of freight factored in. That is further proof if any is needed.

What all these means is that collectible prices are corresponding high. I’ll not talk about vintage or secondhand TFs in speciality toy shops because there really aren’t any around (or if there are, I would not be driving 1 to 2 hours to get there). I will touch on new releases available at normal retail.

David Jones, K-Mart, Myer and Target
For a simple comparison, I would use an average Transformers Movie (2007) Voyager class figure as an example. On the average a Voyager class figure costs between AU$45.00 to AU$49.99 (I am disregarding when Myer priced their Voyagers all wrong at AU$31.99. That was a pleasant joke at least). Averaging AU$47.50 per piece, Australia bought Voyagers are already numerically more expensive than S$40.00 Singapore Voyagers even without allowing for exchange rates. Once exchange rates come into play, we see that each AU Voyager costs approximately S$59.38, almost $20 more than an SG Voyager – therefore AU prices can be considered to be generally 150% higher (or 50% more) than SG prices for new releases. This is generally accurate across major retailers.

Kinokuniya & Hobby Co.
They have the occasional newly released Transformer but their prices are usually skyhigh. Where a Binaltech costs around S$55.00 to S$65.00 in Singapore, the same one is sold at Kinokuniya for AU$99.00 and Hobby Co. at AU$120.00. After factoring in exchange rates a Binaltech in AU costs approximately 200% (or twice as much) of its SG price. Another example is the Star Convoy reissue which cost S$130 back in SG but AU$220 in AU. Unsurprisingly, this is again 200% of its Singapore price after exchange rate conversion.

Prices in different countries
Just to set the record straight, I must say Singapore is not underpricing its toys. Give or take 15-20%, the Singapore price is in line with Japan, Hong Kong and even Korea. USA and Malaysian prices are roughly 20-30% higher than Singapore. Besides Europe, North Pole, South Pole and the Middle East, Australia is the most expensive place in the world to buy new Transformers.

What do all these mean?
In summary, sundry items costs 30% higher, new toy releases costs 50% higher and TF reissues cost 100% higher than Singapore (all percentages approximate). If TF reissues are taken as an exceptional occurrence and disregarded for this analysis, I can assume that AU prices are generally and on the average approximately 40% (average of 30% and 50%) higher than SG prices.

If an average TF collector in AU with a yearly income of $40,000 spends 10% of that on Transformers which he/she loves, it would total AU$4,000 worth of spending a year. Since prices in AU is generally 40% higher than SG, this would be AU$1,600 more than he/she would have to spend if he/she were in either SG or HK.

The price of my Christmas peak period Singapore Airlines round trip SYD to SG to HK to SG to SYD ticket costs AU$1,500 all up. The simple conclusion is this: a collector can go to SG and HK and buy all that he/she would otherwise have bought in AU and still have AU$100 ($1,600 minus $1,500) pocket money to throw away. He/she gets all the Transformers he/she wants from places with selections far superior to AU and gets a ‘free’ trip to Singapore and Hong Kong to top it all off.

Now tell me that the prices in Australia are not completely outrageously ludicrous.

1 comment:

  1. "If an average TF collector in AU with a yearly income of $40,000 spends 10% of that on Transformers which he/she loves, it would total AU$4,000 worth of spending a year. Since prices in AU is generally 40% higher than SG, this would be AU$1,600 more than he/she would have to spend if he/she were in either SG or HK."

    Don't mean to criticize just putting some thoughts up here, but i find this particularly bias.

    There is too many economic and social factors that would need to be considered here, yes i know you make a point in stating the higher standard of living here, but i would just like to [make] this particular part note that, [s]omeone from Asia, particularly HK or [SG] would not come by the salary of 40,000 doing the same level/type of work, for example take an architect in Australia, the average starting salary recommended by the Architects, standard board, states an income of 45,000k in cases its either slightly over or slightly under this, yet its a good gauge of the median price. Now take the same level architect in either [SG] or HK, and in my knowledge particularly [C]hina and [J]apan pay considerably less, and the prospects of actually getting 1) a job and 2) A good job, is subject to much higher levels of competition.

    I know also you would have to compare time studied I know in [SG] you study for longer than a degree generally in Australia, living cost i know are lower in China [SG] and HK, but Higher in [J]apan. Then we need to compare the securities and standards of [social] aspects, medical and study benefits and similar issues. Also the prospects of actually getting into University are completely different.

    So not to say [I]'m shitty to the lack of access, (and price of things) but much more at the lack of access i don't mind paying slightly more if its available here, but it comes at a price. I know some jobs scale differently, but overall I think its fair and probably in this case justified to a certain extent, if its [AU$]1600 more hey, thats the price one pays for higher standards of living. If it was not like this [I]'m no financial expert nor do i claim to be, but the[re] would be more overall problems with commerce, trade and inflation, and then housing prices here, if you think it sucks now ....oh well, lets just say .......

    But in the other cases I think [you are] right, the mass overpricing of products is totally unacceptable in the case of Hobbyco and Kinokuniya, this is more an issue of consumer unfairness...and unwatched regulated pricing [of] Figures and toys.


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