amazon down under

[wayno]

http://www.nzherald.co.nz/business/news ... d=11930152

so how much will amazon shake up the bush walking retail market down under.

reminds me of someone i know who ran a clothing shop in a small town all his life, he closed the shop as soon as he heard a major warehouse retailer was coming to town... he was convinced he wouldnt be able to compete so got out before business went downhill..

we know a lot of bushwalking gear isnt cheap and we''d all like to get it cheaper if its available. a fair number of us here will already have bought from online retailers overseas to get cheaper products.. will this increase those sales and will the prices be any better than they already are, or at least the cost of shipping will be cheaper...
i wonder how much they will actually stock down under to start with especially for niche bushwalking gear and you're paying a similar price because they are shipping it down under when you order anyway, but it will just get shipped to their facility down under instead of the couriers facility...

[slparker]

Once they get going they will completely change the market. But, I don't know how they will get around Australias distribution laws ( where manufacturers have to supply a middleman distributor before selling for retail).

I think they might be their own distributor in which case everyone who competes with them will soon go out of business. Everyone.

Unless you want to pay one third to twice the price for something you will but it at amazon. Boots ( which you can return after you have worn them) from brands like salomon, scarpa and zamberlan, jackets from arcteryx and OR, jetboil, black diamond. In the US customers buy a few items, have them delivered, try them on and return the ones that don't fit or are the wrong colour or whatever. Half sizes in footwear is the norm, a full range of colours, brands and styles is the norm, Getting the right fit at home where you have time to try them on for hours is the norm.
They sell everything and have better service than anyone.
Mountain designs, macpac, paddy pallin will all disappear or there will be one remaining to buy the stuff you can't or won't buy on amazon, like climbing rope, x-country skis and 4season tents. For any physical shop to remain they will have to provide price comparable to Amazon and also service. This is something new for Australian customer service which remains on the diffident end of the spectrum. I expect that the end of the haughty sales person is imminent.
This website, walking blogs and review sites will replace the advice that you once got from the sales person, which is fair enough because they were all biased and often didn't know what they were talking about.

If I had an outdoor shop, or any shop competing with amazon, I would sell now. Australian trade law and distribution practices are from the 1950s, Amazons is cutting edge. it is not going to be pretty.

[Mark F]

Once they get going they will completely change the market. But, I don't know how they will get around Australias distribution laws ( where manufacturers have to supply a middleman distributor before selling for retail).

I have never heard of this and very much doubt any such laws exist. I have, as a retail business, imported several brands directly including Lowe Alpine Systems and a couple of small US brands as did/do many other retailers. The issue is that before the internet, and with quite difficult customs clearance and tax issues (sales tax rather than GST) and the small size of the Australian market it didn't make sense for larger os manufacturers to sell lots of small orders to individual retailers. They wanted to deal with one distributor who would service the Australian market for them and deal with promoting their products. In return they gave exclusive rights to the Australian distributor. These old partnerships still exist.

Much of what Amazon sells is actually from small retailers and occasionally direct from manufacturers rather than sourced by Amazon itself. Amazon just provides the sales platform, and other services - in some cases warehousing and freight. It will be interesting to see how the os manufacturers who place the os sales restrictions on US retailers react.

[wayno]

We know that independent retailers have been going to the wall for years now. Undercut by retailers who are selling their own brand's they have distribution rights to or make themselves... run chain store operations with massive sales and that independent sms retailers can't compete with.. Mandy have started running them out of business then other companies followed suit

[GPSGuided]

Costco and Aldi and even Ikea arrived in Australia, but well managed local businesses are still around. I believe Amazon will similarly put on additional pressure on the retailers but they’ll survive. Look forward to seeing more downward pressure on products and expect a degree of price drop will also translate to the existing retailers. All will be fine except for the smaller stores that lacks management and funding.

[Aushiker]

Once they get going they will completely change the market. But, I don't know how they will get around Australias distribution laws ( where manufacturers have to supply a middleman distributor before selling for retail).

I am very curious about this law. Can you please provide details, i.e., the Federal Act that enacts it.

[ribuck]

... Australias distribution laws ( where manufacturers have to supply a middleman distributor before selling for retail) ...

Presumably this refers to the days before GST, when sales tax was collected from the wholesaler (the last distributor before the retail outlet). For the government to collect this sales tax, there had to be a middleman. I'm guessing this law didn't survive the introduction of GST.

[Mark F]

... Australias distribution laws ( where manufacturers have to supply a middleman distributor before selling for retail) ...

Presumably this refers to the days before GST, when sales tax was collected from the wholesaler (the last distributor before the retail outlet). For the government to collect this sales tax, there had to be a middleman. I'm guessing this law didn't survive the introduction of GST.

Even then it wasn't true. Wholesale Sales Tax (wst) when goods were directly imported by a retailer wst was levied as part of the customs clearance process. From memory it was levied on landed cost plus 10%-20%? - this represented the wholesalers margin. Landed cost comprised cost of goods, insurance, freight and customs duty. There were several rates depending on the goods and the rates increased quite frequently in the end because of the rapidly changing ratio of goods vs services (then untaxed) that made up the economy. We all moan about the GST but it does spread the tax burden over both goods and services plus allows companies to operate in effectively a tax free environment as regards their operations making them more competitive for export.

[Gadgetgeek]

I think it will make it for the better, get rid of the over-priced, outsourced stuff, re-calibrate prices based on a more current exchange rate, and Aussie companies who are willing to do the hard yards and prove themselves are going to be just fine. most "Aussie-grade" stuff isn't made in anywhere else, very few companies make a canvas pack anymore, and so maybe some companies have to deal with having a smaller market, but if they are smart there should be no reason why they can't tick along on making a bomber product. There are great companies that we just can't get a full product range here, because their importer isn't able to move enough stock. Amazon is king at keeping stock overhead to a minimum. And Aussie companies are fighting back. Bought an Instax camera and film for my wife last year. From a Brick and Mortar store for 10% less than any legit web-seller. In store, and guaranteed legit product, It adds up to a big advantage. Amazon has a lot of house-cleaning to do if it wants that rep back. Australia has been competition poor for too long, Competition will only hurt the entrenched big-boxes, like the supercheap group and others.

[Yarbles]

If it follows the US pattern...

Just search youtube for Dead malls videos... Shopping malls are dieing out. In a decade your westfeilds might resemble a zombie flick.
Jc penny
KMART!
Lowes
All closing left right and center in the US.

[Gadgetgeek]

Malls were dying before Amazon showed up. Many were in parts of cities that changed, and either didn't have the parking needed as commute patterns changed, or simply became too expensive for what could be offered. Mostly what are going away are suburban malls, where downtown shopping plazas (especially in cold cities) still do very well. Satellite malls struggle unless you have both a car commute culture, and a very solid anchor store. But even then they are in a precarious position. Malls are very expensive, and due to their size, when they do fail, despite the reason (could be simple mis-managment) people always try to find a larger trend to blame for it, rather than accept that maybe it had just been a bad idea. Also due to the cashflow, Malls can take years to fail, so to the outside observer everything seems fine, but the reality is there can be a slow bleed before it finally shuts down.

[GPSGuided]

If it follows the US pattern...

Just search youtube for Dead malls videos... Shopping malls are dieing out. In a decade your westfeilds might resemble a zombie flick.

As common with exaggerated reports. The fact is, Online shopping is the dominant driver for the future and those deadwood malls will die with or without Amazon. Fact is, there are still plenty of highly profitable malls in the US. It’s just consolidation of the industry and a healthy process. Another example is online food order and home delivery. For some local restaurants, 50% of their nightly business has been taken over by online.

Nothing to fear in terms of the changes. My only concern is the fact that massive US conglomerates are taking over our markets. But that’s another discussion.

[wayno]

My only concern is the fact that massive US conglomerates are taking over our markets. But that’s another discussion.

I dont think thats such a bad thing in the outdoor industry.
distributors have held people to ransom over the extortionate markups they charge on products.
they give all sorts of excuses for the much higher prices than overseas, but they often have a monopoly and can and do charge what they like, they think certain brands are a licence to print money.. they have strangled the market themselves with the rise of online shopping and the easy ways to get around embargoes on selling various brands offshore via online shops...
Its sad for the retailers, but they should have read the writing on the wall... they are the meat in the sandwich.
having said that, retailers seem to be focused on selling expensive gear to rich people. you have to go to shops outside the outdoor industry to get cheaper options of gear because the outdoor shops are selling mainly high end brands....
the local market should have got their act together instead they are largely in line to be swept away by overseas large scale online retailers

[GPSGuided]

As they say in business, crisis brings opportunities.

[Chunder fuzz]

re the selling to rich people, it's because that's where the margins are for some retailers. Amazon et al make their money from volume, if you're selling for peanuts, you need to sell a lot of stuff.

Why sell a heap of cheap stuff that can also be easily bought online and price checked when you can sell a lot less top of the line gear for a similar amount of effort.

E.g. $2,000 sleeping bag or whatever, with a $500 margin. You sell say 1 per week.
To make the same dollars with cheaper gear;
$200 sleeping bag or whatever, with a $50 margin, you need to sell 10 per week to get the same money as the single sale high end product - you need to order more, store more and do more transactions, it's
costly and someone will probably beat you on price anyway if they are already looking for cheaper gear.

[wayno]

you can provide a public service at least and sell some cheap stuff in amongst all the expensive gear they are making money out of

just watched a news item that says 78% of businesses surveyed don't have a strategy to adapt to amazon coming into the aussie market

[photohiker]

Yep, not only that...

The retailers here in Aus and probably NZ have a shorter range of product. That is ok until the users find out that there is a better product not on the market in Australia.

Current example for my recent purchase: I use Salomon light mid boots to do daily and trip walks. When I was setting up to do the Larapinta trail I was concerned about the heat in the air and on the ground and the rare rain events. Searching Salomon, I found there was a perfect boot for a warm dry climate, the Salomon X-Ultra Mid AERO. Could not find them at any retailer in Australia, so bought them online ebay US. More than a year later, I have worn those boots over the Larapinta and every walk daily, and they are wearing down as expected on the heels. Searching again, still no Aussie retailer has them! They are a perfect boot for many places here in Australia! Bought a new pair from Amazon AU$205 including freight.

I'll be taking them into local retailers and explaining why they should carry them. They are missing the best light useful ventilated boots in a dry country.

The other ventilated shoe I use is the Merrell MOAB Vent - good shoe and available at Snowy's, but only one colour. I use them casual daily and on outback trips and would prefer a different colour each other day - Merrell have a lot of colours so I bought another colour online. MOAB has a waterproof version as well if you prefer, but the vent version is perfect for myself in SA/NT.

[wayno]

down under are behind in stocking the latest technology gear, the staff in the shops dont know what technology is available overseas.
most of my expensive gear gets bought overseas because its better than what can be bought down under.
prices here can be ridiculous, arcteryx rainshells up to literally $1000. theres obviously a market for people to pay those prices , peoples willingness to pay those prices just maintains them at ridiculous levels and ends up driving a lot of people overseas to shop.
I get a fair bit of Japanese Montbell gear, top quality materials and quality, not the most elaborate designs but insanely cheap for the quality... the amazing thing is a lot of japanese hikers prefer to pay an arm and a leg for western brands instead. mont bells seems to be seen as a bit of a common brand over there.. but its highly valued by a lot of hikers from the west who want good quality gear

[GPSGuided]

Rarity make the price. People have a tendency to value exclusivity and will to pay to make oneself standout.

[wayno]

i remember decades ago when you could get reasonably priced gear in outdoors shops but then hiking seemed to have turned into a yuppie and dink activity and the stores became full of upmarket labels only... they plug products that are far more expensive light and fragile than they used to be, but they adviertise it like it's the only option.... pure merino is hopeless for durability once you get a hole in it.. it just unravels, i've seen various hybrid materials that werent any better, the shops will sell anything they can for the money.. how many shops warn people when they buy the lightest gear about how long it will last? if people are paying top dollar they expect that that means its good quality and will last,
in reality the ultralight stuff is more difficult to make and made in less bulk, making it more expensive, its at the limit of what you can make
factories at present cant make nylon yarn lighter than 7 denier because it breaks in the mill equipment.... otherwise they would make it lighter...
if you've seen 7 denier fabric, its the thickness of a disposable supermarket bag.. i look at some of the main zippers on jackets which arent much stronger than trouser zippers...
the obsession to save weight has turned it into more of an academic rather than a practical exercise.... yeah we can make ad sell all this ridiculously lightweight gear, but good luck in getting it to last.

[t21wolves]

I'm an American living near Melbourne. For what it's worth, I agree shops that mass market and are overpriced (like Paddy Pallin) will struggle. But any store that requires or offers specialized knowledge, fitting, etc. (like Bogong and One Planet) and offers relatively competitive pricing will be fine. I am willing to spend more at a location that has great, knowledgeable employees within reason. They may lose some business with more common products (say Nalgene water bottles or common brand boots) and may need to compete more on pricing, but nothing beats being able to see and touch certain items (think getting inside of a tent).

Additionally, another reason Amazon can be as competitive in the US is UPS (private delivery service). The ability to ship anywhere at great rates to Amazon enables them a huge advantage with larger/bulkier items (Tents/sleeping bags/chairs, etc.). I don't think Australia has that kind of a wide ranging, inexpensive shipping system available right now which will limit some ability to buy/return shoes (like OP's example) for cheap or free with Amazon Prime.

I use Amazon extensively and my thought is mid-range or more common products may go more on Amazon. A few penny pinchers will view in store and buy elsewhere. But people will still pay a resonable premium to stores with great staff and for the ability to see and touch a lot of things before buying.

[wayno]

wait and see, courier companies will be falling over themselves for Amazon's business $$$$$$ as volumes go up prices will come down.... america are years ahead in online shopping.

[CasualNerd]

... For what it's worth, I agree shops that mass market and are overpriced (like Paddy Pallin) will struggle. ...

Paddy Palin are willing to do a bit of a deal if you quote an online price sometimes. I'll pay a few extra dollars to buy in store, but once it's double the price for a pair of boots, I'm going straight to ebay.

I'm excited for Amazon in Australia, we might finally get access to a lot of brands that are difficult to buy currently. Cheaper gear = less time working and more time walking.

[GPSGuided]

I think time will tell just what exactly Amazon will bring. Like Costco, they won’t have everything that are on their US store nor at the same pricing. Will wait.

[casey79]

We know that independent retailers have been going to the wall for years now. Undercut by retailers who are selling their own brand's they have distribution rights to or make themselves... run chain store operations with massive sales and that independent sms retailers can't compete with.. Mandy have started running them out of business then other companies followed suit

If the vertical integrated store style was the way to riches why is Champ (the macpac owner) looking for a buyer to off load their investment after less than 2 years??

Intrestingly when macpac should be gearing for the December retail rush instead of looking for a buyer.

http://www.theaustralian.com.au/busines ... 043b57a2ac

While stores like Bivouac and Paddys keep on ticking on?

[Mark F]

One of the problems posed by Amazon for specialist shops is that while Amazon are unlikely to ever stock the more specialist gear, they undercut and reduce the sales of the more mainstream gear that bricks and mortar retailers rely on to provide the financial wellbeing that allows them to specialise.

[wayno]

We know that independent retailers have been going to the wall for years now. Undercut by retailers who are selling their own brand's they have distribution rights to or make themselves... run chain store operations with massive sales and that independent sms retailers can't compete with.. Mandy have started running them out of business then other companies followed suit

If the vertical integrated store style was the way to riches why is Champ (the macpac owner) looking for a buyer to off load their investment after less than 2 years??

Intrestingly when macpac should be gearing for the December retail rush instead of looking for a buyer.

http://www.theaustralian.com.au/busines ... 043b57a2ac

While stores like Bivouac and Paddys keep on ticking on?

its not going to be the same for all stores, i dont know all the ins and outs and i dont have all the answers.. businesses can fail for many reasons, Bivouac is a one stop shop, including for climbing gear as well as hiking. it stocks a full range of gear and clothing, which a lot of the chain stores dont have, macpac isnt really a one stop shop. its their own branded stores that sells a random range of extra's. Bivouac pitches itself as a premium shop, selling some of the best products on the market, if you've got the money to burn and dont want to spend time trying to get what you want online you can walk in , and get it there in one go.. macpac are nowhere near as big as Kathmandu, the stores are smaller and there are far fewer of them. kathmandu has a far bigger share of the market in physical shops... macpac reverted to their own branded stores years after macpac came along, they may not have been able to carry it off as well. recently they have tried to set themselves as selling more technically designed specialist gear for the outdoors, that carries a risk, the gear is more expensive to make and can have a smaller client base than kathmandu selling gear that is more crossover gear between street wear and outdoor gear as well as dedicated outdoor gear..... plus with the rise of online shopping, makes it hard for macpac to maintain decent market share... macpac has been recognised for decades as making quality gear for hikers, but they may not have gained the same recognition amongst the wider population. kathmandu have come a long way, their gear originally wasnt good quality or that well designed, it was well priced.... they make more technically designed gear now which competes with companies like macpac's traditional territory.... If people dont recognise much difference between macpac and kathmandu, then they won't go out of their way to find a macpac store, i've experienced some quality control issues with some of the macpac gear i've bought, i dont know how widespread this is, a few years back they had major warranty issues with their rainwear, they completey changed the fabrics they were using in the end.
it doesnt mean macpac are necessarily in financial trouble but they may not be getting the sorts of financial return Champ wanted, making themselves more specialised may make them less likely to make the same sort of money that a company kathmandu does.

[stepbystep]

Oh...I thought you were talking about Tasmania's Tarkine forests...

https://www.youtube.com/watch?v=6JflXu_C-w8

As you were....

[Franco]

Once they get going they will completely change the market. But, I don't know how they will get around Australias distribution laws ( where manufacturers have to supply a middleman distributor before selling for retail).

If I had an outdoor shop, or any shop competing with amazon, I would sell now. Australian trade law and distribution practices are from the 1950s, Amazons is cutting edge. it is not going to be pretty.

Your premise is wrong.
There is no such law that manufacturers need to supply a distributor and can't sell directly.
For example the shop I worked for was one of the first to sell Crumpler bags. We bought them directly from Crumpler.

[slparker]

Once they get going they will completely change the market. But, I don't know how they will get around Australias distribution laws ( where manufacturers have to supply a middleman distributor before selling for retail).

If I had an outdoor shop, or any shop competing with amazon, I would sell now. Australian trade law and distribution practices are from the 1950s, Amazons is cutting edge. it is not going to be pretty.

Your premise is wrong.
There is no such law that manufacturers need to supply a distributor and can't sell directly.
For example the shop I worked for was one of the first to sell Crumpler bags. We bought them directly from Crumpler.

Yes, I was wrong.

It wasn’t a law, so far as I am aware, but In the past some shops were forces by distribution agreements to buy from distributors. For example, a shop had to resell a north face jacket supplied from an Australian distributor rather than source it independently from overseas, even at much less cost.

This is what I was referring to. I believe that it still occurs, at least it does for other retailers (cycling for example). It probably still occurs in bushwalking shops in Australia where boots, for example, can cost nearly twice as much as what is available on the internet.

Crumpler bags are not imported so I’d be surprised if they had to be exported then reimported by a distributor for resale. That is, unless they are now made in China.