Just a rant...

[Scotty72]

Oh good, I was waiting for personal jibes, based on perceptions of personality. It adds so much to the debate. Shall I retort with, "You must be a Nazi!", or should I stick to the issue, boring as that might be?

[Redgum]

The Harvey Normans of this world often sell" below cost" They have a rebate system whereby a certain number of sales gives "X"discount but more sales gives" Y "discount. I checked around for tyres a while ago and best price I got was $350. per tyre. As luck would have it, it was at the end of the month and through a contact I paid $250. per tyre. Since I bought 6 tyres I saved considerably. I am sure that retailer didn't lose money because he is still in business.
My point being I bought the same tyre at a cheaper cost to me. So if I needed a pro tog I would get 5,10, or 20 quotes. No skin off my nose and I would choose the one I felt comfortable with. So I actually would pick the price point.

Let me correct two points here. Harvey Norman never sell below cost. Their buying power is such that they simply REDUCE the cost from their supplier. With end of run products they simple tell the supplier to take back unsold stock or reduce the suppliers price.
You did well with the tyres. I owned a number of Goodyear franchises for a couple of years and the biggest margin I had on buying tyre stock was around 7%. In other words I would buy a tyre for $93 and sell for $100 and from that margin would have to fit and balance. The stores would be completely dependent on-selling other services to make a profit. This is different to "company" stores with a margin of say 25% or major retailers like K Mart but even so other mechanical services is the only thing that allows tyre stores to survive. So, your $100 per tyre discount either put the store out of business (which is common in that industry) or you did other business which off-set the huge discount. The only other alternative is to sell you an "unknown" brand which is neither safe or economical in the long run.
Often, a large discount is the most uneconomical way to buy good product.

[kiwi]

What's reasonable Scotty that if someone requests I work for them that's it's not going to result in me losing more money than I make, could be babysitting, photography, or being a doctor

I'll simply say no, that's reasonable

[jbee]

Well I am with Jasevk. If the product is available locally or can be in acceptable time frame even if I have to pay a bit mire I always buy local, then I further differentiate and buy from the shop with service. I don't push them to match the Harvey Normans of the world on price provided the rest if the equation falls in their favor IE knowledge service with a smile etc.
You would be amazed at how often supporting a local business like this pays off and how often they will come up trumps given the chance and when you do not try to preasurise them.
When I bought my 7D and kit I looked on the web to get an idea of prices, went to Harvey Normans and the only other big Camera store in town, then just on the off chance I rang the little Kodak store in town which I did not even think sold SLR's, and you know what, the guy had tons of knowledge, a great friendly attitude and 15 mins later called me back with a price that walked all over the other locals by a huge margin and was damn close to the best on the web. I now go there every time I need something and I don't shop around., I might pay a couple of bucks more now and then ( not often I bet though) but I don't care because I like shopping there and I want to make sure locals like this stay in business. Jasvk is right, Tassie may be a bit different to the North Island, but service is alive and well if you care to support it and we all should.

[Redgum]

Not at all, I've identified all my costs, seriously ALL of them, including business objectives for the next 3yrs, and priced around that, I'm probably not as expensive as the established pro - but I don't currently have a studio to run... Therefore my overheads are alot lower than the pro running a studio.... So no Scotty, it's not undercutting, it's my pricing model based on an extensive costing excercise. But I Should've expected that you'd argue for the sake of arguing :P

Back on topic. You've mentioned a couple of times a desire to have a studio and that's part of your business plan. I guess that you are aware that the trend for professional photographers is quite the opposite now, a great number discarding the horrendous cost and overhead to share facilities. This is not new of course, the film industry has done this for a hundred of years. Perhaps a bit more research may help you here.
I mention this because it gives you an opportunity to compete with established photographers and still make a small profit whilst you develop your business.

[maccaroneski]

Easy, tigers. I think that we should in fact stick to the topic.

Excellent point Redgum. I think that it is certainly something that should be more than considered, both from a purely cost sharing perspective as well as from a "potential synergies" perspective, particularly if the participants aren't in direct competition (and to a lesser extent, even if they are).

For example, when in private practice as a solicitor, I shared office and administrative facilities with an accountant and a mortgage broker. I later extended this to another solicitor, albeit one who specialised in debt recovery (I didn't), and we all experienced the advantages referred to above.

[Scotty72]

Well I am with Jasevk. If the product is available locally or can be in acceptable time frame even if I have to pay a bit mire I always buy local, then I further differentiate and buy from the shop with service. I don't push them to match the Harvey Normans of the world on price provided the rest if the equation falls in their favor IE knowledge service with a smile etc.
You would be amazed at how often supporting a local business like this pays off and how often they will come up trumps given the chance and when you do not try to preasurise them.
When I bought my 7D and kit I looked on the web to get an idea of prices, went to Harvey Normans and the only other big Camera store in town, then just on the off chance I rang the little Kodak store in town which I did not even think sold SLR's, and you know what, the guy had tons of knowledge, a great friendly attitude and 15 mins later called me back with a price that walked all over the other locals by a huge margin and was damn close to the best on the web. I now go there every time I need something and I don't shop around., I might pay a couple of bucks more now and then ( not often I bet though) but I don't care because I like shopping there and I want to make sure locals like this stay in business. Jasvk is right, Tassie may be a bit different to the North Island, but service is alive and well if you care to support it and we all should.

This may be the right thing to do, it may not. I'm just pointing out that increasingly, price is all that matters. Harvey Norman recognises that and are running scared, trying to use their corporate muscle to force online sales from overseas out of the market.

Why should we all? Why should a customer be willing to pay more when they could use that money (accumulated over many purchases) to take their kids on a decent holiday; send them to a science camp; buy fresher, organic food or buy them decent health insurance? Many would argue their kids are more important than propping up inefficient, local shops. Right?

Scotty

[jasevk]

Back on topic. You've mentioned a couple of times a desire to have a studio and that's part of your business plan. I guess that you are aware that the trend for professional photographers is quite the opposite now, a great number discarding the horrendous cost and overhead to share facilities. This is not new of course, the film industry has done this for a hundred of years. Perhaps a bit more research may help you here.
I mention this because it gives you an opportunity to compete with established photographers and still make a small profit whilst you develop your business.

Thanks Red... That's helpful.

[jasevk]

This may be the right thing to do, it may not. I'm just pointing out that increasingly, price is all that matters. Harvey Norman recognises that and are running scared, trying to use their corporate muscle to force online sales from overseas out of the market.

Why should we all? Why should a customer be willing to pay more when they could use that money (accumulated over many purchases) to take their kids on a decent holiday; send them to a science camp; buy fresher, organic food or buy them decent health insurance? Many would argue their kids are more important than propping up inefficient, local shops. Right?

Scotty

If my income allows me to give my kids the best of everything, plus uphold my values, then that's my business and choice to do so, also, this topic is not about big commercial business and their inflated prices... It's about people trying to screw down one man operators...

[Scotty72]

If my income allows me to give my kids the best of everything, plus uphold my values, then that's my business and choice to do so, also, this topic is not about big commercial business and their inflated prices... It's about people trying to screw down one man operators...

It doesn't matter if they are big or small: gettin' screwed is getting screwed. This is just a form of rationalisation to justify actions.

Good on you if you are wealthy enough to make decisions which 'uphold your values'. Many people aren't so lucky and I don't think the rich should moralise about poor people and their 'lack of values'. Sounds rather Dickensian to me.

Scotty

[kiwi]

On the basis that any further comment that I might make in this thread would render my NY resolutions invalid, I wish you all luck in this debate. I'd just like to say I agree with you all 100%

[Redgum]

Scotty, retailing is a predatory occupation regardless of whether you're big or small, rich or poor. Like any money making occupation the first lessons you learn when going into business for yourself is how to survive (make money). The alternative is poverty. Morality should, but rarely enters the equation and the larger you are the more distant you become from moral reality. Do you think Telstra/Woolworths/Coles or any bank gives a hoot about your wealth. Certainly not until their profits are challenged.
So, as an individual customer you have to make buying decisions all by yourself. If Jase chooses one way and you another that makes perfect sense and is based entirely on individual situations. Hopefully, as life goes on, we all learn the best way but that doesn't alter your right (or Jase's) to make your own decision.

[Redgum]

On the basis that any further comment that I might make in this thread would render my NY resolutions invalid, I wish you all luck in this debate. I'd just like to say I agree with you all 100%

So Kiwi, do we take it that your New Year resolution is to agree with us 100% all the time?

[bobt]

If my income allows me to give my kids the best of everything, plus uphold my values, then that's my business and choice to do so, also, this topic is not about big commercial business and their inflated prices... It's about people trying to screw down one man operators...

Sometimes it's a tad hard knowing whether we're still "on topic" or not. The nature of these conversations is that they tend to morph along the way, and that's fine in my book because that's what happens in conversations.

To me, the topic is all about pricing and market forces whether it be at a corporate level or at the "one man band" level. It's also about expectations and the realities of running a business.

At the end of the day both corporations and individuals are all seeking a profit, and they will usually seek the greatest profit they can. So essentially it's probably true to say that providers of goods and services will generally try to screw the most they can out of customers.

Similarly, the clients of these businesses will generally try to extract the best deal they can, and that's the nature of being a consumer.

What both sides need to realise is that there is a pendulum which tilts back and forth favoring one or other. It might be the $US or it might be a glut on the market of something or other, or it might be a radical change such as digital photography or it might be greater competition. Either side needs to be adaptable enough to capitalise on these advantages when they arise, and flexible enough to alter their expectations when things are less favourable.

Then there is the moral argument which questions whether capitalising on a situation is ethical or not and so we introduce another element, i.e. is the conduct of either the buyer or seller morally justifiable as distinct from economically justifiable. So we end up examining a pricing structure and deciding whether it fulfills our own personal economic and moral standards.

This thread started really because of a concern that customers lacked an appreciation of the value for money they were getting. Ultimately, "value for money" comes down to a very individual perspective. As long as both customer and client recognise that they have the capacity to say "No" to a deal, and just walk away, then neither need get their knickers in a twist. No-one forces people to accept a particular deal unless there are no other "deals" to consider. That's the nature of our society - if you don't like a deal .... just walk away, and if you can't walk away - then adjust your expectations. Just don't expect to always be on the winning side of the pendulum.

[jasevk]

On the basis that any further comment that I might make in this thread would render my NY resolutions invalid, I wish you all luck in this debate. I'd just like to say I agree with you all 100%

Lol, I might bow out myself... There's been some helpful replies to this thread, so thank you to everyone

[zollo]

I can safely say, no one here likes to be employed for $0 a week/day/hour (if you do, I have plenty of work for you). as far as i can tell, thats the only thing jasevk had a gripe about. people expecting him to work for free/below cost. yep i've come across plenty of these people too, and after kindly explaining to them that i have costs too, send them on their way. regardless of whether the market is headed this way or not. guess what, I'm still in business! yaay for me! stick to your guns

[jasevk]

I can safely say, no one here likes to be employed for $0 a week/day/hour (if you do, I have plenty of work for you). as far as i can tell, thats the only thing jasevk had a gripe about. people expecting him to work for free/below cost. yep i've come across plenty of these people too, and after kindly explaining to them that i have costs too, send them on their way. regardless of whether the market is headed this way or not. guess what, I'm still in business! yaay for me! stick to your guns

Thanks Zollo, you're hearing me!

[Scotty72]

Scotty, retailing is a predatory occupation regardless of whether you're big or small, rich or poor. Like any money making occupation the first lessons you learn when going into business for yourself is how to survive (make money). The alternative is poverty. Morality should, but rarely enters the equation and the larger you are the more distant you become from moral reality. Do you think Telstra/Woolworths/Coles or any bank gives a hoot about your wealth. Certainly not until their profits are challenged.
So, as an individual customer you have to make buying decisions all by yourself. If Jase chooses one way and you another that makes perfect sense and is based entirely on individual situations. Hopefully, as life goes on, we all learn the best way but that doesn't alter your right (or Jase's) to make your own decision.

I agree so, I'm not sure why you're telling me this. It is perhaps more 'moral' to ensure the vendor gets a fair margin on top of his/her costs or that we support small shops so Woolies/Westfields don't drive them out of business but, that is not my concern - is it?

[Wayne]

I feel I am a reasonably astute consumer, I try to be well informed about products/services i buy and rarely need the 'help' of sales reps who often know very little about what they are selling, especially in the major chain stores. I have usually made up my mind on what I am buying by the time I go into a store or open an e-commerce site. This means a very easy sale for the retailer as I need no assistance buying or deciding or a tour of the features etc, and I am happy to sort warranties out for myself. This makes me low cost consumer for the retailer.

I am grossly immoral though, as I send my money to whoever gives me the best deal based on price/availability and could not care less about their sad stories regarding why their prices are 20-30-50+% more than another retailer. I don't feel I need to pay a premium to allow for the less astute consumer who needs hands on assistance either before or after the purchase of an item.

If they can't compete globally, they don't get my money.

[Redgum]

Sure Wayne, but it works both ways. As the bigger companies globalise they need less staff. Ten's of thousands have lost their jobs from Telco's, hundreds of thousands from banks and the list goes on. When you or a mate lose their job you shouldn't get any of my money either (no dole) because you couldn't globalise. Australia employs less people now than it did ten years ago despite economic growth so it's only a matter of time before most meaningful jobs are gone. Why have teachers when kids can learn more effectively on-line or at least it's more cost effective and it can be done from Hong Kong (one on-line teacher for 30,000 kids - easy). Think of School of the Air on a global scale.
Globalisation is a curse designed by the multi-nationals to increase profit and reduce wages. The time will come when you won't have enough money to buy goods anyway (as many of our rural cousins already know). I wonder who will win the race, you or globalisation? No contest despite how astute you may be. Does the work you do compete globally? I hope so.