Things in Australia are highly over-rated. This bargain guide is to share my experiences and some of the tricks I learnt to help others and discuss on this interesting topic.
If you're a new comer to Australia and want to buy any kind of electronics, home appliances, furniture you will obviously find things over-rated compared to your home country or other places you may have lived in previously. And if you walk into any of the large retailers to buy stuff and end up paying the advertised or marked price, then please call yourself 'fooled'.
Sales in Australia is all about negotiating. You have to give it a shot if you want to get more for your hard earned buck. If you feel shy or humble to talk about bargaining then my friend, you are simply making the already rich retailer smile away with his golden teeth.
Here are some of the things I do, today. Remember when I landed in Australia there was no one to tell me all this. It was learnt the hard way, through experience and spending of thousands of dollars over time. My only intention is to help someone who reads this to probably get a better deal when they go shopping.
Step1: Information is wealth. Always do your own research
Whenever you plan on buying anything, first do your research for the best product to suit your needs. Example: if you want a vacuum cleaner, dont simply land up in the shop and end up like a noobe. The shop keeper is simply gonna send you walking with something he wants to get rid of. So you need to do your research. How can you do that - simply leverage the power of Google. If you're looking to buy a vacuum cleaner, and if you have a carpeted floor at home then you will have to find the best possible vacuum suited for carpets. Shortlist a few vacuum cleaners from different brands which may fit your budget. Then read reviews about the products and make sure people who have bought it in the past also acknowledge the true value of the product. One good site for reviews on Australian products is: www.productreview.com.au. Some of the things to be considered while selecting the best product are - 1> Features of the product
2> It meets your requirements?
3> User reviews and other specialist reviews
4> Year of the model? Example: When was the specific model you want launched? You will know how new or how old is the technology you're buying.
5> Manufacturer's guarantee - longer the better
6> Service & Spare parts - better known brands have their spares easily available.
So lesson 1 is that you need to find the product that suits you / your needs to prevent ending up buying a product and then making yourself suit to the product's needs. Do not skip this step due to the temptations of some online deal or paper advertisement that may seem like a steal. Good things cannot be bought at a throw-away price, not always.
Step2: Find the best deal - online.
Once you have researched and found that one, two or even three of the best products which have been selected based on features, other user's reviews and cost, now scout for the best deal possible for these shortlisted items on the internet. Why so - because there are many online stores that can quote you cheaper price than actual retailers. How - because their do not need to pay rents at prime locations for their stores, they are simply over the internet. Moreover, you will get an idea of how low the price of the product can go. Make sure you use a paper and write down your findings since this process can get quite messy and you can easily lose track of it. If needed, bookmark or take screen shots of the sites which have the lowest rates.
While I would love to mention a few sites that you can use for this, but if I do that you may lose out on a better deal elsewhere. Use Google to find the better deals. While you do so, remember to also visit the online sites of the major retailers like Harvey Norman, Dick Smith, JB Hi-fi, Myers, Bing Lee etc. Do note down their prices as well for the product(s) you have selected and intend to buy.
Step3: Understand the business.
Business is business. Everyone out there is there to make money, no charity. I have people in my family run a shop and understand certain nuances of the retail business. There are some terms that you need to know and understand.
Retailer's "cost price" - Price at which the retailer buys the product from the manufacturer. He will never sell it to you at this price. Lets imagine a product say a blender, and lets say its cost price is 100$.
Retailer's "costs" - The cost incurred by the retailer in running the store/business - rent, electricity, staff, advertisements etc. Now the retailer passes a fraction of the cost to every product that he sells. Bigger stuff like fridges, washing machines & televisions have bigger costs. Lets say, the retailer's cost of about 5$ is added to the blender. So cost of blender = 100 + 5 = 105$.
Retailer's "Margin" - This is the % of profit the retailer aims to make on the product when he sells it to you. Usually different category of products have different margins. Bigger stuff like fridges, washing machines & televisions have bigger margins compared to smaller items such as CD's or Bulbs. Now lets assume that the retailer wants to make a 30% margin on the blender. So cost of blender = (100 + 5) + 30 = 135$.
"Markup" - This is directly proportional to the greed factor of the retailer. Sometimes, retailers mark-up or quote a higher than usual price on the product. This is especially true during off season times and they try to make more on each item sold since the volume of sales is down at that time. In Australia, this markup is really high and it seems like almost all big retailers do mark-ups. Maybe this is done to take care of the usual negotiation culture that is here. Since they know that most of the customers are gonna negotiate they simply mark-up the price by a factor. Remember, even if you think you did a good job negotiating they are simply losing the markup, which was not supposed to be there anyway. You are still losing. So lets say the retailer did a markup of 15$ on the blender. Cost of the blender as you see it in the store = (100 + 5) + 30 + 15 = 150$.
Step 4: Do the calculations
Now taking note of all the above and keeping the paper with all the data you collected in front of you do your math. The cheapest online deal that you found will give you an idea of how much the product may cost with [Cost Price + Cost + Margin]. Say, you found the blender online at 125$. Assuming a normalized margin of 20% you get a rough idea that the cost price of the blender is close to 100$. Now if saw the price of the same blender on Harvey Norman or Bing Lee website as 145$, you know there is some scope to negotiate. I always recommend buying as far as possible in stores, rather than unknown online-shops which make it difficult in case you want to return or have problems with the product. However, having said that, there are some good online stores with good reputation as well. So now getting back to the blender, you know that you can straightaway go down by 10-15$ which is the markup. Beyond this the lower you can go the better is the deal you are getting. So now I know I should target for a price around 115$ and try to walk away with the product paying close to that amount.
Step 5: At the stores
i> You now walk into your nearest good large retailer, lets say Harvey Norman. Go well dressed so that the salesmen are attracted to you. Do not appear as the regular store browser - shop keepers hate them. You have already visited the shop's online store so you know the product is there and you know roughly what their price is. So simply go straight to the section where your product is. Now do not pounce on your product.
ii> Call a storeman/salesman and ask him for his recommendation of the best product to suit your needs. Lets say he ponts to another blender model. Ask him "which is the best seller in this product category". Most likely he will point to the same model which he mentioned earlier.
iii> Now ask him what does he think about the blender model which you have researched. Ignore his answer. You are only trying to send him a message that you are interested in that model. Taking note of the price that has been displayed on your blender model (say 145$), now ask him "what is the best deal you can do for this". It is likely that he may quote a price immediately or may run to his store manager to get a quote.
iv> Lets say he comes back with a price of 135$. This means they have only reduced a bit on the 'markup'. You still have to go further. Now drop your price(calculated as above) to him. "I would be willing to buy this at around 115$ or so and if you can come closer to this price then I will buy it right now". Its likely he may say it is too low or he cannot do it. Insist him to go speak to his manager and tell him that you are ready with the cash. Ask if you can speak to the manager. (usually happens if the product is big value)
v> Now, if he or the manager comes back drop your online research on him. First take out the print-out of the screenshot of the cheapest online deal you found earlier in step2. They will most definitely not agree. Use your research, if the blender is an older model they may as well sell it out to you. "This blender is last year's model. Its price will drop anyway in 1-2 months"(i.e: if its around year-end). Tell him, "I am not buying the best selling blender as shown by the salesman - so I am not affecting your sales in a big way. Just asking you to reduce your margin a little. I will buy this immediately".
vi> Even on this if he does not agree, then tell him "115$ is the best win-win deal. Its better to make a sale at a slightly reduced margin than sit with the product in the store for months. Anyways its not the best seller. I am sorry I guess if you cant come to my price, then I will go elsewhere. Dont want to hassle you or anything". Now give him one last chance, he will most likely take it. Say to him "so whats the final and last price from your side?". Human psychology, if he does not want to lose he will quote a price close to yours but only slightly above it. If you feel its a deal, buy it immediately. Walk out of the store with a smile on your face and thank the sales man. He will remember you another day when you walk back into their store. If you did not get the deal, then go straight to another store. After all its your hard earned money and your choice. Customer is king.. most of the times !!
After writing until here, I realized maybe a blender worth 150$ may seem too much for all this haggling. But just imagine if it were a 1800$ fridge or television and if this could help you save 300-400$, then why not. If you dont need that money, give it to charity. There are a lot of people out there who are in need of that money for their existence rather than the already rich retailer.
Also remember, bargaining works like a charm when you have more than one item to buy and you want to strike a group deal. I now usually go with friends or relatives who are also looking to buy something - we walk together to the store and straight away announce that we want this & this & this etc. But note here, shop keepers are also clever, they will try to send you away with an "overall discount". Don't fall for it. Price check each item one by one, until you're satisfied that you're getting the best deal for each of them.
Note: About extended warranty
I am a person who pays for peace of mind, so I always add in additional warranty for most electronic/appliances. On the other hand, I also have friends who simply trust their brand and are confident about its quality. They do not spend more on that additional warranty. This is completely debatable. If you ask me personally, I will definitely recommend buying additional warranty.
Ok... written too much and bored you already. If you read this and want to voice your opinion or experiences or if you have any questions, please feel free to comment. Lets have a constructive discussion on this topic.
All of us live and die for Biryani ! The things that we do and the lengths that we go to for Biryani. The look on one's face when they hear "Biryani" is unfakeable.
