Why do Engel fridges cost so much in Australia??

He's in business to make nothing ?

Hi Ron

What cost does he sell them for?


Cheers


Stephen

I went past his shop last week and, from memory, 40L were $600 odd.

I have ordered 2 x 100AH Fullriver DC batterys from him $370 ea and am picking them up Monday. I will check his Engel price then.

Here is a bit more info on the store...Battery Force.

I can assure you one thing guys, if they are around the $600 mark, they are either second hand, or dropped off the back of a truck. No one can buy them that cheap in the trade, trust me, I know what they cost.

Why does every think that there is bleep loads of money in products like that. If the guy was selling them that price, he would be losing around $500 including GST per fridge.....a very quick way to go out of business.


Cheers


Stephen

I'm with Stephen on this.
I bought two new Engels a couple of years ago from the Rays Outdoors stand at the 4x4 show in Melbourne.
I arranged to pick them up from my local Rays store as I didn't want to carry them from the show to the car.

When I picked them up the dopey storeman dealing with the loading dock out back of the store forgot to remove the invoices stuck to the side of the box from Engel so I got to see the invoiced price to Rays :)

Now I can't say whether Rays gets some sort of yearly volume rebate etc managed at the head office level or not but they did not make much money in my deal based on the numbers I saw.

Rays may not have much margin on the Engel fridges but it is the price at which the importer then sells to their distributors/resellers, ie Rays, which is the issue. The importer is the one who makes the profit for almost no work or responsibility.

Rays/Supercheap/BCF all the same.

Tyres are the same.

It is all based on importer greed.

Hi Ross

The Australian importer is Engel themselves, with no other middle man. You will find that all the major retail store, including Rays, BCF etc all buy them at the same price.

What a lot of people do not understand, is that a lot of the big major stores sell the fridge at full RR, I know and have seen their prices. Yes they do have specials, but there are many other stores around that can beat them hands down in price.

But remember one special thing, regardless where you buy it in Australia, that store employs Australians, pays rates and taxes in Australia and will stand by the product that they sell. Try asking the same if you get one from overseas.


Cheers


Stephen

G'day Stephen
Does that mean who ever imports, ie Engel into South Africa and the selling chain store who is selling the same item for half the A$ value isn't providing warranty in SA? If the warranty fact is the deciding difference.

I would guess the Importer whoever or whatever the arrangement, is making money on the same item at that 1/2 A$ value. Therefore, the items actual production value/cost is probably around a 1/3 of South African sale price given profits made there. That means the $1500 in Oz on a $200 actual value is a good profit for the maker. He allows a small amount for you to make it happen.

If Engel are the sole importer to Australia and sell to you, based on the relative SA value retail, it would seem Engel is more than doubling the price here in Oz in order to sell to you for resale at a small profit.
We all know everyone has to make a profit but it is the size of the extracted profit which seems to be the issue.

The Engels are quite reliable and while there will be some warranty claims it seems the price to you, set by Engel well and truly covers the likelyhood of any warranty provision.

Engel wins, Customer squeezed . The Cooper tyres, sorry "Tires as they call them" is the same story. I know of figures of 6 imported from USA and the Huge saving even with shipping included. Around $570 saving.

Cheers
Ross M

Hi Ross

When we next see our Engel rep, I am going to ask that question. I should not be saying this, but even with buying power discount, Rays and the like would still be paying around the $1100 mark including GST as their cost price, so why the big difference in South Africa??


Cheers


Stephen

I hope you relay that info back to us Ross, interesting that the Engels sold in South Africa have the Australian box, power plug and paper work. Yes they carry a full one year warranty in South Africa.
As a long term retailer myself I reckon Engel AU would be purchasing these fridges for around $350 to $400 including freight. Someone said that the extra cost is due to the warranty commitment. The Japanese parent company would bare the cost for parts in the 1st year and Engels are very reliable fridges.I hope Engel Australia reply in this forum as I'm sure they are reading it. Australia must be the highest Engel user in the world and don't we deserve some price reward for that.

I bought a 40L direct from Engel at a agricultural field day in Northern Tasmania in May last year for $629.00 and they carried it to my car for me, came complete with cover and remote temp gauge. At the time I think they were retailing for $1100.00. I was probably lucky as I did my approach as they were packing up but would suggest that this is probably getting close to wholesale price.
Regards
Ian

Waeco do the same as Engel. It's an importer state of mind.

Around 7 years ago I bought a new CDF35 Waeco in box ($400) from a retailer on the Cold Goast, just last week I see the exact same fridge at Super Cheap Auto as a special being discounted at $749 and that was with their normal price being $49 more than the $749.

Importers motto - Double OR Nothing.

OK, from the horses mouth....I called into Battery Force today.
His Engels on special are a 38L model with plastic body.
He is selling them for $680 as a "get you into the store" item hoping to sell you extras, bags etc or batteries which is their bread & butter.
He said this model has a RRP of around $795.
The model is made to compete with Waeco.
His metal body 40L Engel is $1100.

Cheers Neil

THIS one I guess. Marketing.....such a 'funny' game.....it seems all but one of the Engel fridges have a numeric model number greater than their respective capacities.

Oops...... please excuse my tautological use of 'numeric'...:-o).

I agree.

Australian retailers price an item at what they feel the market is prepared to pay.

It happens in all sectors of retail.

My father sold Engel in his 4wd accessory store on the central coast, and market was at around 40% for his Engels (and that was the rrp).

That is a decent markup.

Tyres are another biggy....sister sells them and I know the markup they make, and it's runs at around 100% depending on the popularity of the tyre.

But of course, our wages and everything is high and not competitive with the rest of the world, so higher retail costs are inevitable.

Brett....

Show me the big retail store with its high rent, insurance,power bills, high wages, cost of stock on the floor,advertising,one on one consumer service and product backup and high taxes that the online store has also got to bear to sell you this cheaper same product.

If you compare the prices in the full page magazine advertisments from AXMINSTER in the UK and TOOL CRIB OF THE NORTH in the US, you will find them not too diferent to the large players in Australia, like Carbatec and Trade Tools...As I have said we do Ok on power tools.

Both Axminster and tool crib are very large retail operations with lots of staff, good service and big advertising budjets.

On the matter of outdoor persuits, look at CABELA's in the US, they have over 40 strores....let me tell you a lot of mail order comes into Australia out of Cabella's...In particular fishing tackle.

Go have a look at "JACK'S SMALL ENGINES", if that aint a bricks and mortar store I don't know what is.....they are just a large country town mower shop in Maryland.....they will pay their rates & insurance like everybody else. They have an international mail order business that predates the internet.

Compare the prices of golf cart parts from "EAST COAST CARTS" in the US with the same parts from "AUGUSTA GOLF CARTS" in QLD.....both very similar businesses.....The price difference is not as offencive as some stuff.

If you realy want to see something offencive....look at the prices on some of the Australian manufacturerd products such a locking diffs.
Some people have found it cheaper to mail order out of the US than buy direct from TJM or ARB in Australia.
AND that is mail ordering out of very large bricks and mortar (actually steel and sheet metal) stores.
Don't tell me that is to do with freight and import dities.

Its a lot less to do with scales of economy and local costs and more to do with expectations of high profits in the Australian market.

In some situations the truth of the matter is the "Australian Distributers" don't even buy direct from the manufacturer they actually buy thru a large retail store in the US. I know this to be a fact for some of the pro audio brands, because the Australian distributers have told me so.

It gets realy bad where the local distributer is a wholey owned subsiduary of the parent company.

Some items that I had or have dealer pricing arrangements in Australia, I can buy cheaper, form a bricks and mortar retailer in the US.

SHURE SM58 microphones have been a joke in the audio industry for decades. We have always been able to buy off the street retail, from bricks and mortar retailers in the US, Japan & Singapore for way less than the quantity buy Australian wholesale price.
People ( store owners, individuals and production companies) have been bringing in suitcases of em on a regular basis and cheerfully paying the import duties....and still been able to sell em for way less than the Austraian wholesale price.

Yep the Australia tax is very real and its all about profit for the big end of town, many of the retailers are being gouged as much as the end user.

cheers

US product is heavily subsidised, ask the US shop what rent they are paying and what they are paying their staff and all of the employee benefits that they dont get that are paid here.
Our local car manufacturing industry is an example of trying to compare different economies on the same product.

I don't think any of the Aussie landlords will accept US rental rates or employees wages

No those products are not subsidised.....there is no one there giving money so the item can be sold below cost of production exclusivly in the US.

As for rents and labour rates....that does not account for the 200%, 300%, 400% and higher price gouging we experience on many items that do not originate in the US.

Remember there are products in every market that do not differ greaty in price between here, the US the UK and elsewhere.

check the prices on small engines....Honda ( a far better product BTW) is way dearer in the US than Brigs & Stratton, but in Australia I can buy a Honda for less......both are imported into the US and Australia from various eastern countries.

These so called Australian overheads reasonably account for a 20% to 30% difference in price maybe 50% at a push and that is about it.

not the 200%, 300%, 400% and higer price gouging we experience on many items.

cheers

That's right. South Africa or Australia - I know where I'd rather live, no disrespect to South Africans.

Some people need to know which side of their bread the butter is.

G'day Rocco

I agree with you, but probably more and more folk are becoming savvy about price comparisons because of online availability. My story is a Canon lens - $350 online vs $700 in store in Melbourne. I do understand overheads, but that is a big difference, and in fact was the difference between having the lens or not.

Overall, the issues for me centre on warranty, freight cost, and probably too much caution.

Cheers
John

Good to see the old price of prosperity line getting a run again. It may apply in some cases but not as we know in lots of others. I'm not commenting about Engel as I don't know the facts but more broadly speaking a cynic might say that while filling the boots of a monopoly importer does little for consumers' pockets or our prosperity over all it certainly helps his or hers no end. I'd also add that monopolies have NOTHING at all in common with free markets. I'll concede though that higher wages and costs, a small population, and our isolation - which many think all add to our "prosperity" - are significant contributors to the prices we pay on many items. Can't blame the $A any more.

Competition is key but with our small population no-one should realistically expect similar prices to many overseas countries on some items, particularly when there's also an expectation of readily-available warranty and service. Just the same as traditional bricks and mortar shops where you can handle things, try them on, and easily return them being expected to compete on price with online warehouses. Unreasonable expectations. There are plenty of exceptions though - computer software is a classic example. Another I recently came across: a Sony camera battery - $99 here $38 in the land of the free. Little wonder cheap (and lower quality) Chinese "clones" are doing so well in many circumstances.

This whole prosperity thing simply does not account for the rediculous 2x 3x 4x and more margins on top of what is charged retail overseas.

When you can buy RETAIL, from a bricks and mortar tackle shop in Hawiai or Tokio and pay 1/2 to 1/3 the price you would pay in Australia on any large ticket Shimanno item.
Neither market poor struggling locations known for their low prices.
AND they will turn arroud a warranty claim faster than the local importer.

When I can buy briggs and strattion parts RETAIL from a bricks and mortar small engine shop in Jarretsville, Maryland USA....and pay freight and still pay half what the cost would be here.
AND I can get the parts quicker from the US.
AND they sell Honda motors at something that compares to what I paid here...but their briggs motors are nearly 1/3 the price I was quoted here.

One area we realy get hammered on is fibre optic tooling..I recently baught some.
I could have baught a simple stripper (its not a very clever bit of engineering) here for arround $200 (rediculous), the same stripper from the US would have cost me $70 including freight...I baught mine from Hong Kong and it IS genuine, it cost me about what it should $20 including freight.
A similar situation right across my kit of optic tools.

This is all to do with gouging where they can...and its not the local retailers that are getting the margin.


Quite often I ask if local distributers have a role to play in some markets, they neither hold stock nor supply timely service.
Quite a lot of them do not supply sufficient service to deserve their margin.


Now there are quite a few products sold in Australia with NO local distribution.
The dealers lodge orders direct with the manufacturer and the goods are shipped direct.
A great many importers do not handle their own warranty work..so the same contractors handle that.
Spares get airbagged direct, and arrive weeks earlier than they would thru a distributer..and the freight costs less.



There are also quite a few brands that are sold overseas in a lower market sector than they are here....overseas they are well priced and competitive, here they are just overpriced comared to the rest of the market.



A few years ago, when they realised that they where suffering from direct import competitiveness, and some of the cheaper microphone brands actually outperforming them Shure and Jands cut 30% off their Australian Shure price list over night.

We pay way too much for a lot of things, but we are seeing comparable products come in at way lower but still very profitable margins, giving the price gougers something to think about.

Do yaself a big favour and consider the alternative brands.
The more of the competitive brands that sell, the more pressure will be applied to the price gougers.

cheers

Plug in circuit board for a Carrier Gas Furnace - Oz price $600. In the US - $49. Guess where I bought it?

Unfortunately you are unlucky & well in the minority.

And by old i mean, brand spanking new fridges with all cords, cover etc... They are simply being replaced by the new CFX range of fridges.. Yet the CF50's are still being sold at your local BCF / Rays / Anaconda for $1200+

Travis.

Obviously the Australian cars come with a "free" Engel :)

Cheers
Greg

And I know there was a big waiting list to get a new Cayenne here in oz, how stupid must Porsche be to keep sending the majority of there stock to the US when they could of been more than doubling their profit by selling that same car here.
We all know they are not that stupid so it gives some insight into the cost of selling product here in Australia. There is no middle man profiteering in this case either, Porsche are company represented here in Oz as are Miele cooking appliances by the way

Damn straight there is a middle man......this BS is worst when the local distribution is a subsiduary of the parent company.

They know that they can get away with charging a rediculous price...so they do.....and that huge margin wont end up in the dealers pocket...it ends up in the parent companies coffers.

Much of the time this "Australia Tax" is applied before the local distributer sees the item.

You bett the local wholey owned subsiduary distributer is only marginally profitable..because the parent company charges them an inflated price on evreything.

It is profiteering pure and simple.

cheers

US prices are heavily subsidised, some Porsche dealers in the US got caught ordering in Cayennes and when they landed put them straight back onto a boat to be resold in China at a profit.
This practise was stopped by the supplier

I don't think the "Profiteering" is as clear cut as it is made out to be, if it was we would have a lot more manufactureres on our door trying to flog us product and making their fortune

If a company has sufficient profit to subsidise in one of the largest markets in the world.....they have to get that money from somewhere.

As to being subsidised......is that subsidised in the true sence of the word or is that just being sold at a discount that does not apply in higher margin markets like Australia.

If the profiteering was as realy clear cut..something would be done about it.

But the whole thing is put thru a process that if it was applied to say...drugs, would be considered money laundering.

One company sells to another, and to another, and other companies handle other parts of the process like shipping, pre-delivery, local assembly inventory managment, warranty service, spare parts, product representation or wharehousing charged at an unreasonably high rate, all to justify the "high costs of overheads" and all of the profits going back to the same company that owns it all.


In many markets there most definitely IS price fixing, but it is not expressed explicitly, it is achieved by obtuse means, thus the perpetratoirs are not prosecuted.

Such as saying ..we don't tell our dealers what to charge....but if they engage in discounting or undercutting other dealers....they don't get bonuses, discounted stock, advertising support, refeerals and all sorts of other benifits that are subject to vague quailifying terms....or they may just loose access to the product, next year the dealership or distributorship may go to a competitor who will tow the line.

In my business one of the suppliers regularly gets pressure from large high margin bricks and mortar retail stores with loud complaints when someone like me who gets contractor dealer pricing supplies at a compettitive rate and these big retailers miss out on a few pissy little sales.
Several times I have had to remind that supplier that I have a 20 year standing arrangement and i get the same dealer prices as the stores not a "trade price" which many of the big stores will sell below anyway.

Another example...A consumable product that I used to buy "distributer", and sell on to people who would retail it, as well as selling retail myself.
There was a US company that would buy it in the US, in quantity from the US parent company..they would have to pay way less than I.....they would re-bag it put their brand on it and sell it in Australia at 4 times my recommended retail....the end to end profit margin would have been extrordinary.
They would make heaps out of the few to stupid to know what the product was and shop arround.


Ya gota face it there are a lot of very high margin sellers in this country, both at the wholesale and retail point.

AND lately a lot of cheap chinese crackers sold at prices as if it was top shelf stuff.


cheers

When I say subsidised I mean that they don't cop all of the duties and taxes on their products not self subsidising
The small amount of any product sold in Oz is not going to subsidise any market.
I hear what you are saying but it is a free market and people are free to purchase or not purchase a product and sellers are free to sell for whatever they feel they can get away with that is what establishes it's price and that is free commerce
Why did engel make a cheaper fridge to compete with The cheaper brands when they could have just reduced some of their ridiculously high margins to match them and still be profiteering?
No doubt there are companies that are making tidy margins and good for them but the way you are portraying it we are all mugs and should be getting in on the act of bringing in some gear from O/S and making a fortune flogging it off to the punters, I don't think it is that clear cut.
A good mate of mine is a wholesale distributor to most of the major corporate chain stores, he has the products made in China on his behalf. I know what he buys for, how much it costs to get it here (all trading is in US dollars), what he sells it for and what the retail outlet then sells it for to the consumer.
The markups to me sound justified and understandable but agree in % terms can sound high
I am a consumer just like everyone else and don't see what the big deal is really, spend your dollar where you think you should be it here or from O/S online and the market forces will find there own level accordingly