This article offers one of the better analyse of the Australian online retail trade. It makes the point that Harvey Norman need not be exhibiting the pricing power. It may be wholesalers or manufacturers. The question is which? We raised this point in one of our blogs as well. I suspect the answer is that its certain manufacturers like Sony and Toshiba which have significant brand power. I think there is a tendency for retailers in Australia to mark-up those cheaper products to the Sony prices to make them appear more 'reasonably' priced. i.e. Most price-sensitive people will buy the lower-priced import, and retailers will mark-up their prices, knowing that that is where most customers will fall. It only works as long as people don't go online. i.e. So long as customers are ignorant. i.e. Scared of online transactions. Clearly the fear factor is disappearing and Gerry Harvey is starting to see it in store sales.
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