Recently, both the media and a few Members of Parliament have been asking some very pointed questions about why we have to pay the high prices we do in this country, for virtually everything, especially motor vehicles and clothes.
In the USA and other countries, the whole concept of wholesaling and retailing is much the same as it is here. Goods are purchased in quantity from the manufacturers – most of these being in the Far East and then shipped to that country. Import duty and cost of shipping is added, the goods are marked up and supplied to the retailers who in turn mark them up and sell them on to the end user. But that’s where it ends. The difference in the retail prices charged on the same items purchased in the USA and the UK are enormous. Much of the time, it’s dollars for pounds. In quite a lot of instances, the goods in America sell for less than a third of British prices. I recently priced some fluorocarbon line made by one of the leaders in this field. A 250 yard spool of the very best sells for about 6 US Dollars. In England, a miserable 20 metre spool of the same stuff sells for about £ 7.00! Why? British retailers, manufacturers and distributors often attempt to justify their high prices by claiming that their costs are higher, or the Pound is “too strong”. Codswallop! You can buy a well known make of British fly rod for almost half the price in New York. And I’ll bet the rents, taxes and wages are a lot higher in New York than the small North of England town where these rods are made. If the pound is strong, it means that we pay less in pounds for any imported commodity, doesn’t it? Another pathetic reason for high prices given out by British firms is that the market is not as big as it is in the USA. Cobblers! In South Africa there are barely 350,000 anglers and prices there are much lower. There seems to be an entirely different attitude to business here in the UK compared to America or some other parts of the world. In America they employ highly qualified marketing people who carefully work out what the public wants. Then they sit down and calculate how cheaply they can sell their products and how many they have to sell to make a decent profit. In Britain, there seems to be a host of pseudo-marketing people who pose and ponce around with company cars and cell phones, finding out how much they can charge and how little they have to sell in order to make a profit. They even advertise sales jobs as “Marketing Positions.” Has no one ever told these companies that sales and marketing are two entirely different disciplines? It’s as though businesses here regard the term “Sales Person” as a dirty word. Some time ago I ordered an item of furniture for my house. I saw the item involved, paid cash for it and told them that they could deliver the next day. No such luck! I had to wait 6 weeks for the thing; AND NO WAY COULD I HAVE THE ITEM THAT WAS ON DISPLAY IN THE SHOP! I may be digressing a little but is this the norm in this country? Eight weeks later I still hadn’t had my bed. It seems that British business, including the fishing tackle industry, is a nasty combination of greed, idleness and contempt for the paying public. The vast majority of firms in this country are run by accountants, not professional sales or marketing people. I’m sure you know how the mind of an accountant works: “get the most for the product you can, get the customer to pay money up front, don’t ever keep it in stock or purchase in bulk, and then make the customer wait as long as possible.” As an example, I once had to wait 5 weeks for a spare spool for one of my reels. Take the RRPs being advertised on fishing tackle. A typical example was the pole which recently had a RRP of £ 1600.00. The retail outlet involved advertised a discount price of £ 870.00. In other words, half of what it should be. Certainly this organisation wasn’t going to sell the pole at a loss. They could also offer it on interest free terms over 12 months, which to me means that there must still be a very healthy margin for the retailer in the price of £ 870.00 Let’s assume that the mark-up is about 40%. This is generally what is required by any retailer to stay in business. Then the wholesale price would be about £ 522.00. To hike a basic cost of £ 522.00 to a RRP of £ 1700.00, a mark up of over 300% is not only daylight robbery, it is business suicide in a free market economy! But in Britain there is no free market economy. Who is actually setting these RRPs? My guess is that the fishing tackle industry, and other industries for that matter, are ruled by unsavoury individuals posing as entrepreneurs linked together in devious cartels. Decisions are taken by business bullies and Fat Cat accountants in exclusive clubs and Masonic Lodges. Woe betide the small business person who goes all out to smash these hideous syndicates and price fixing cartels. It happened to an acquaintance of mine in the Midlands a few years ago. He was forced into receivership by the cartel and even prosecuted by a government qwango – in true cloak and dagger style – for selling tackle at what was in fact a very fair mark-up. In a free market we should never need shadowy government agencies investigating retail outlets which sell too cheaply or, worse still, intervening to cut prices when it is perceived that they are too inflated. In a free market we should never have extortionately high RRPs set such that the general public can be duped into believing they are getting a bargain when that high RRP is discounted. I don’t think the average British punter is as stupid as that. In a true free market, the last thing we want is price fixing by any sort of organisation. The price to the end user should be controlled by free market forces and the right of a retailer to sell his goods at whatever mark up is necessary to remain in business and to stay competitive within that free market. |
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