Vendors including Apple, Samsung, Motorola and Canon whose products are being advertised and offered via the Kogan website have said that they are not supplying Kogan Technology directly, with some vendors questioning the legitimacy of the warranties associated with the products.Investigations by ChannelNews reveal that Kogan executives have been looking to Companies like Dropshipping Global Services Limited, which is a Hong Kong based company to supply digital camera goods.
The way the system would work, is that Kogan advertises a branded product on his web site. Once an order and an upfront payment has been made he places an order on a parallel importer such as DGS who provide drop shipping and wholesale service for online retailers, resellers, wholesalers and distributors.
The goods are shipped out of Asia overnight, sometimes directly to the end customer.
A spoksperson for DGS said that Kogan had an account with their Company.
They also said that they are able to supply digital cameras from Samsung, Nikon, Canon and Pentax at up to 45% cheaper than what vendors are selling the same cameras to retailers for in Australia.
The only issue is that some vendors of digital cameras do not offer a warranty in Australia on products not sold via their in country distribution channel.
Kogan executives said earlier this week “To secure the prices we are able to sell these products for, we have cut out more middle men and gone higher up the supply chain. Beyond this, we don’t discuss specific details of our supply chain. This is confidential information.”
ChannelNews has also been told that some online retailers are taking orders in Australia and then placing orders on US retailers via a local US Company who sources and ships the products for the online retailer.
Earlier this week Kogan said that they will start selling Apple products in a move that its founder, Ruslan Kogan, claims will “rattle the entire retail market.”
Kogan is offering an Apple iPad 2 Wifi 64G for $659 Vs $799 at Harvey Norman and $784 at JB Hi-Fi. The goods are believed to have been sourced via either Singapore or the USA.
Ruslan Kogan told StartupSmart that the move will significantly impact the retail market.
“We expect that Kogan’s expansion today will seriously rattle the entire retail market,” he says.
“For far too long, Australian shoppers have been paying inflated prices on the world’s leading brands and products. Today, that changes.”
“We know that JB Hi-Fi and Harvey Norman watch us like a hawk, and we expect that they will be very worried about today’s announcement.”