# General Business Category > General Business Forum >  UK to SA price difference

## murdock

why are we getting so badly punished here in south africa?

why i ask...a fluke 1653B multifunction tester 
south africa - R33000.00
UK - R8000.00

hilti GX 120 ME 
south africa - R8000.00 
UK - R3200.00

I purchased some equipment a while back and the amount of money i spent... i could have flown to the USA had a 2 week holiday purchased the equipment and returned and it wouldnt have cost what i paid for it here in south africa

the only reason i purchased it here was for the warranty and backup service...i am not gona mention the companies name but i can tell you now i will never make that mistake again.

something i dont understand if you buy for example a hilti product in china the warranty should be valid world wide at any hilti branch...next time i spend more than R10 000 on a product i will shop worldwide first.

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## murdock

and by the way those south african prices are after my discount excuding vat...UK prices advertised prices.

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## adrianh

Who quoted you on the Fluke in south Africa?

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## murdock

our local fluke agent.

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## adrianh

Interesting...RS Electronics is usually the most expensive - Judging by his prices your agent must be buying from RS, marking-up and reselling to you...

Have you tried Comtest or Measurement Group?

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## murdock

i see they have it for R27489.81 ex vat

that is still a R19000 difference in price...more like a 200% + markup...on a price sold in the UK already marked up...any way you look at this we geetting the short end of the stick.

someone  mentioned that when products like this arrive in the country they dont mark it up a percentage they just  mulitply it by a figue...some products are multipled by anywhere from 2 and up

now i know what i am doing wrong in my bussiness...buy equipment in south africa...causing my overheads to become unrealistic...i need to start importing...

i am considering importing second hand test equipment like companies do with imported engines and gearboxes...import hordes of second hand test equipment and flood the market at reasonable prices.

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## adrianh

This guy's in Cape Town.

http://www.e-test.com/

He has been doing it for years. He also rents the gear out. I needed a logic analyzer and simply got it from him for a month. I've dealt with him over the years and he's great.

South African prices - this is a very interesting topic. The local resellers need to learn a hard lesson and it is that the only way they can stay in business is by adding value. We can get onto the internet and buy anything from anywhere simply by using a credit card. It is said that we should support local industry but it is rather problemaic when you are paying through your nose. I bring most speciality things that I need in myself. Take your Fluke for example, if it were to break you could simply send it back to the UK, have it repaired and have it returned to you. I've brought in two printers from Japan and the one is going back for repairs.

The customerbase for high end testgear is very limited and I suppose that it is mostly large companies. The municipality doesn't mind paying R30K for the instrument if everybody quote the same. Of course the little guy like me and you are not willing to pay these prices. 

There are so many examples of this pricing nonsense - cars, DVDs, movies, Apple computers (now there's a mafia - the distributor also owns all the retail stores), etc.

I refuse to pay the prices, they can keep the cars, my 10 year old car is fine, I haven't bought s DVD or been to a movie in years and they can keep the Apples. The days of distributors milking the public are gone - Viva credt cards, the internet & uncapped ADSL.

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## IanF

Here is one reason the UK economy is 864.5% larger in a much smaller country. Source wolfram alpha. I see this a lot in printing when I see what the US printers pay for colour print costs compared to what we pay, and a big part of this is SA is just small. My outlook is as long as my competitors pay the same then it will be fair. But it is never that simple.

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## desA

SA business has a captive market & wants megabucks with each sale. I have had quotes that are 3 times the SE Asian price.

If you have cash-in-hand, it could very well pay to purchase off-shore. It would pay for the plane flight. Just check the customs fee, if requested on arrival.

Too many comfortable cartels operating in SA.

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## murdock

i think a lot of people are still scared to pay someone for something they cant see or collect directly....when we can overcome this fear...these cartels we talk about will shut down and go under.

i give you an example hilti dont have a branch in durban any more it is just basicaly a big hilti sign with a few machines on show...but when you go try buy consumables or anything from them you cant buy off the shelf you have to order thru the rep...here the catch for every delivery you have to pay R80 freight charge no matter how small the package...so for me this doesnt pay...i would rather just go to builders express or somewhere like that and purchase fisher plug which work better than hilti plugs because you can remove them...for some unknow reason hilti plugs are easy to install but man try take it out...the screw head alway strips even if you you a phillips.

a friend of mine buys everything off shore...he said the only thing to be careful of is using south african postal service...chances are it will be stolen before it gets to you...not the supplier fault...so use a reliable frieight company and pay the little extra for peace of mind.

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## Dave A

Low volume, capital tied up, forex red tape, no competition... it all adds up to a royal screwing. And to some extent it creates a vicious circle - in this instance Fluke loses sales as a result which reduces volumes (and the need to mark-up) even further.

It used to be like this with computers. I bought my first laptop on a trip to the USA and the saving covered the trip. Doesn't apply anymore though. Competition and volume took care of the gap.

Same with sound equipment  -we probably all owe Hifi Corporation a big thanks for knocking that lot right.

But it's not just a problem in SA. I saw a great CRM plug-in for Quickbooks while at a convention in the USA and the price seemed reasonable. The only problem was USA works with GST and we work with VAT, so I would have to buy a UK (VAT friendly) version. It's 3 times the price of the USA (GST) version.  :Frown: 

Economics rule and sometimes that opens up these price differentials for perfectly legitimate reasons. But it also means if someone gets too greedy on their mark-ups it opens the gap for more efficient operators.

To some extent that's why the PIIGS are in so much sh*t and China's star is on the rise. If we keep undermining market efficiency we'll probably head the same way eventually.

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## BusFact

I'm not familiar with the products mainly referred to above, but I have a situation as follows:

There is a small and occasional requirement for one of my products. It comes in a wide range of about 20 colours. Each enquiry would want 5 or 6 of these colours, but never the same ones. Also different sizes are needed which I can cut.

So I import the product in bulk size in 20 colours and have these available to cut bits off for customers as and when they need them.

That ties up several tens of thousands of Rands in a very slow moving stock item. Material can stay in my stores for 3+ years before being finally used. They also take up space to store.

To make this product viable for me I just have to mark it up considerably. Cutting prices would not help volumes because there is not much of a market out there anyway.

Point being, for some products there is a reason for the seemingly high prices. In order to have the stock ready in a few hours as opposed to several days or weeks by airfreight (not to mention the high costs on small packages).

Just another point of view.

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Dave A (24-Jun-10)

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## desA

^ Have you read the Benneton story?

Base garment no colour. Add colours as required later. Great for stock-holding.

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## AndyD

I always purchase test equipment overseas (UK or USA) unless it's basic bread and butter items. Even including shipping by DHL or similar it invariably works out less than half price. It helps if you have a trusted friend or family their to help with the purchase.

With many makes of equipment their agencies in SA are contractually bound to supply service, calibrate and warranty should it be necessary even though it wasn't purchased here. They sometimes object but I just get an email from their overseas offices outlining their responsibilities and that's always been sufficient.

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## adrianh

Read this lot - Comtest doesn't much like competition...

http://www.comtest.co.za/news-mainme...ght-to-comtest

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## AndyD

It looks like that's aimed at stopping people importing and selling the goods on to an end user. I haven't imported Fluke, most of my test equipment is Megger, Laplace and Druck.

At the risk of starting an argument I prefer Megger to Fluke.

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## murdock

reading that article explains why you have to hold your ankles every time you purchase fluke equipment...

and it explains why they are putting such a huge mark up on the product...because they can 

i personal wont buy anymore fluke products in south africa especially not the more expensive ones...it would pay me to take a holiday rather.

fluke and megger are in the same office in durban.

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## murdock

i dont understand how this whole pricing structure works...surely the goverment should look after the consumer in this country or is that what the problem boils down to again like the telephone sager...where the goverment is actually the problem and not the telephone companies because of their cut they get.

or am ai missing the boat here...i cant understand how a product purchased from fluke in the UK would be regarded as a grey market product and why they are not allowed to sell you fluke equipment here in south africa...what am i missing how does comtest justify a 200% markup.

surely if fluke comes directly from the fluke factory we should be able to offer the same pricing structure as the UK...taking into account that the price we are talking about is not cost but sale price...imagine what fluke UK pay for the equipment.

this type of behavior should be illegal...or does the goverment support this?

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## Pap_sak

> i dont understand how this whole pricing structure works...surely the goverment should look after the consumer in this country or is that what the problem boils down to again like the telephone sager...where the goverment is actually the problem and not the telephone companies because of their cut they get.
> 
> or am ai missing the boat here...i cant understand how a product purchased from fluke in the UK would be regarded as a grey market product and why they are not allowed to sell you fluke equipment here in south africa...what am i missing how does comtest justify a 200% markup.
> 
> surely if fluke comes directly from the fluke factory we should be able to offer the same pricing structure as the UK...taking into account that the price we are talking about is not cost but sale price...imagine what fluke UK pay for the equipment.
> 
> this type of behavior should be illegal...or does the goverment support this?


_If you think you can do it better, go for it

Sounds like it could be a business, but do have the balls???

Are you willing to chuck that money at it...?_

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## adrianh

Murdock, you must remember that they, just like us, run a business to make money. We all price our products as high as the market is willing to pay. 80% of people that approch me are willing to pay my prices, 10% ask why the prices are so low and 10% complain because they feell the prices are too high. I am quite happy to serve the 90% of the market who are willing to pay the prices. My view as a supplier is that I will not change my pricing structure to suit 10% of the market. 

If the market was unwilling to tolerate Fluke pricing then they wouldn't buy the products locally. You and I fit into the unhappy 10%. We have a choice, either get the product from the UK or buy something else.

I am not defending Fluke SA as such, but I do understand why they set their prices as they do.

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Blurock (10-Aug-11), BusFact (27-Jun-10), Dave A (28-Jun-10)

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## Pap_sak

> i dont understand how this whole pricing structure works...surely the goverment should look after the consumer in this country or is that what the problem boils down to again like the telephone sager...where the goverment is actually the problem and not the telephone companies because of their cut they get.
> 
> or am ai missing the boat here...i cant understand how a product purchased from fluke in the UK would be regarded as a grey market product and why they are not allowed to sell you fluke equipment here in south africa...what am i missing how does comtest justify a 200% markup.
> 
> surely if fluke comes directly from the fluke factory we should be able to offer the same pricing structure as the UK...taking into account that the price we are talking about is not cost but sale price...imagine what fluke UK pay for the equipment.
> 
> this type of behavior should be illegal...or does the goverment support this?


You could also source for another brand...and become the sole importer for that brand. If the brand is not represented in his country it wouldn't be that hard to do. You will need someone that knows how to fix the machines, or send the faulty machine back and let the customer use a demo model while being fixed. And a good website instead of a brick and mortar shop will save a bit. You will still want a 100% margin though...

I think the government (and it's many boards) could/should do more on some things like why it costs me over R14 for a debit order, the price of writing out a check, cell phone calls, maybe even new car prices..reigning in the big guys that we HAVE to use...but not on the smaller guys or where there is already viable/cheaper alternatives. So I do not expect them to look at the price of ink cartridges or the price of Gillette razor blades.

They could also look at why I have to fork out R530 to watch a bit of rugby...

 :Mad:

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## murdock

point taken...

but here is another scenerio i was involved in a once off project a while back and maybe this is why the employment and sales situation is like it is in sa...it was cheaper to fly to far east...hire and setup a workshop...employ the local community...design the moulds and manufacter the product...did quality checks there and shipped it back...and stiill saved a huge amount of money...so as you mentioned you just need the balls and incentive to do it.

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## Duncan

South Africans are greedy. Its time to a put a stop to all this trash taking place: The milking us.
Down Vodacom, down the banks (and i could go on and on) and down the other greedy bastards that make this place difficult to live in. Our cell providers are one of the most expensive in the world, why. Because we allow it. We are so damn hungry for technology that we just accept it.
A cell contract in UK with Orange, 25 pounds gets you any phone you want and 750 free minutes per month, yes, its true and that's equal to R275.00 per month.
Standard Bank made 14Billion profit last fiscal year. Come on guys. I had to pay them R925.00 for a couple of back dated statements to prove a point to the receiver. I might as well have just paid the receiver. 

Chatting recently to an american on the plan to Jhb and i asked him if he thought it was an expensive destination, and you can guess what he said. Yes.

If we don't start fixing this we are on a road to no where. And it is such a beautiful place which we will be loosing out of.

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## Blurock

Interesting following this thread. Some of us are still relying on the Government to fix things for us. They must fix the roads, fix the education, fix prices, fix the banking system etc etc.  :Stick Out Tongue: 

Is the onus not on us as consumers to make decisions and take action? South Africans are greedy? No, they are too damn lazy to go to the shop to exchange the substandard item purchased just yesterday. They are too lazy to look for alternatives. They are too lazy to pick up the phone or write a letter to the CEO to complain about bad service. 
 :Fence: 
The onus is on the consumer. Refuse to pay the bank for unwarranted fees. Close your account if need be, but do not sit back in your recliner and do nothing! If prices are too high, do not pay it. Stay without the icing on the cake for a short while until the prices come down. Change starts with us.  :Batman:

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BusFact (10-Aug-11)

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