The pricing of some consumer electronics goods sold in Australia is “over the top” and should be reduced to bring them in line with overseas pricing for the same goods claims Harvey Norman executives.
However several vendors are claiming that the reason for the price gouging is the “margin and marketing” demands that Harvey Norman is placing on manufacturers and distributors.
In an interview with the Australian newspaper, Luke Naish, head of Harvey Norman’s computers and communications division singled out Microsoft and their Windows 7 offering. He has called on Microsoft to immediately change it’s pricing policy for the operating system to allow it to compete with retailers potentially sourcing genuine copies of the software from markets where retail prices for Windows 7 are set at less than half those in Australia.
“We would like to support Microsoft on a local level, but we would like greater price alignments between the markets to remain competitive within our own market,” Naish, told the Australian.
In Asia the Windows 7 home operating system is selling for $120 at Harvey Norman it is selling for $300.
Also price gouging at Harvey Norman is Sony, who is currently selling a PS3 for up to $200 more than the listed US recommended retail price.
In the home theatre arena brands like Onkyo and Marantz are selling receivers at Harvey Norman at up to 90% over the recommended retail price in the USA.
Ironically, several vendors have told ChannelNews that one of the main reasons for increased price gouging in Australia is the margin and marketing demands that Harvey Norman put on vendors when they stock their products.
They claim that the mass retailer is “brutal” when it comes to price negotiations, with the retailer demanding up to 25% margin plus a sell through rebate and then tens of thousands in co-op advertising dollars for their catalogues and TV promotions.
They are also buying TV and print advertising at one price and then on selling it to vendors at another price with Harvey Norman pocketing the difference.
One mainstream vendor said “It’s ironic that it is Harvey Norman who is complaining about pricing. They are the ones who are forcing vendors to push up prices in Australia. US retailers are far easier to deal with and are less demanding. We sell a lot through Harvey Norman and there have been times when we have seriously considered pulling out” they said.
“This is easier to do now than 3 years ago, because of the amount of retailers who are selling IT and consumer electronics gear. We have the likes of JB Hi FI, Officeworks, Bing Lee, The Good Guys, as well as the likes of Clive Peeters and Wow Sight & Sound. The single reason that goods are so expensive in Australia is the distribution model and the demands of retailers like Harvey Norman. For them to complain about Microsoft is a joke”.
