The battle between Sydney retailer Digital Cinema and distributor Amber Technology over the sale of Onkyo and Optima products blew up when Amber Technology discovered that Digital Cinema was selling overseas sourced products considerable cheaper than if they had sourced the products via Amber Technology the official distributor in Australia.
An investigation by SmartHouse has revealed that several consumer products sold by Amber Technology are significantly more expensive than if one had purchased the products online or from an overseas retailer.
For example the TX NR906 has a recommended retail price in Australia of $4,999 via Amber Technology. Retailers in the USA are selling the same product for $1,649 or when converted to Australian dollars $1,885.
This is over 260% more expensive than a US consumer has to pay for the same products. Other Onkyo products are close to 300% more expensive.
According to Digital Cinema executive Paul Godfrey, he can source Onkyo and Optima products from overseas, “deliver the same warranty” as what Amber Technology deliver and still sell the Onkyo products cheaper than what Amber Technology is selling product for to retailers.
Godfrey has also obtained C Tick certification which allows his Company to act as “vendor” of products he has imported.
Overseas Onkyo is starting to sell product through discount retailers like Wal Mart and in Asia several Companies are offering 240 volt Onkyo products for sale in Australia
On the downside the receivers are not set up for Australian AM and FM channels and in some cases may not have an Australian plug.
Len Wallis of Len Wallis Audio in Sydney, who is a distributor and retailer, claims that consumers are now using the web to buy consumer electronics from overseas web sites, they are also researching the cost of products on overseas web sites before buying in Australia.
“There are a number of threats to our industry and we have to wake up now to some of the issues. Consumers are buying from overseas web sites and in some cases mass retailers are selling products at significantly less than what we can buy the same products for in Australia”.
“Specialist retailers in particular are under pressure from the web. In today’s market our margins can only be 15 to 20% above the US or foreign market pricing, we are also seeing more overseas distributors targeting the Australian market with consumer electronics”.
Another major Melbourne retailer said “Consumer electronics distributors like Amber Technology are marking up products way over 100% to 200% when IT distributors of notebooks, PC’s, Smartphone’s are only marking up products between 8 and 10%. These guys are selling everything from cables and iPad accessories to navigation gear to a new generation of wireless charging mats”.
Len Wallis added “While I support what the consumer electronics distributors are trying to do their business is under threat from both the web and pricing issues. We as an industry need to wake up to these problems which are difficult to address”.
Last month Audio Connection a Sydney based retailer shut up shop with CEO Josef Riediger claiming that his business had been under threat for some time from Internet based traders.
“We often had people coming into our store to look at a product and then going online to buy. This was happening time and time again”.
“We are now going to sell online as it eliminates the overhead of running a store. We will demonstrate some Hi Fi and consumer electronics products at our Five Dock store”.
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