Hi,

We just recently trying to get hold of a replacement fuel pump form my MSR stove, and couldn’t but notice the huge price differential between what we are paying in SA versus the US for MSR equipment (particular their stoves). I mean a MSR Dragonfly stoves retails for 110$ = +- R760 (at today’s rates) and on one SA online retails store the price is R2020.00.

Seriously ? I now were are a small market (probably a function of the price of some gear) but 167% ??

Anyway although MSR (and Amazon) doesn’t allow you to ship directly from the USA (probably some agreement to protect the distributor), there are ways and means to get around that.
So sorry, I can’t afford to support local, especially if it seems we are being ripped of (or is there a 100% import duty on stoves and pumps)

a + b + c + d = x

People don't seem to know or notice how much HARD WORK goes into importing and distributing goods into SA. You pay duty, tax, people to do the admin, you take a huge HUGE financial risk in hoping that the R100,000 chance you're taking on stocking only ONE product x will even sell. (Will you spend that much money for, say, importing a new line of cams, hoping that you would at least get your money back by selling some of those cams?) And then there's product f, g, h, i, j, etc etc that you HAVE to stock to make your shop worth visiting...it turns out to be ALLOT of money to just get going. All this for a fringe sport(not at all mainstream like soccer or rugby). You think this is risk free? Its friggin scary if you ask me!

Then you need to pay your own staff, rent, water and electricity, have to keep prices competitive with the other shops, and the bills of providing this service to the climbing community just keeps growing and growing and growing - yes, its THAT expensive to do business in general.

And I'm not even the guy who pays the bills here... I don't even work for MSR and the good people who distribute it in SA. From the sidelines I see that MSR has some of the best after sales service that I've ever seen - seems like if you buy a stove, you've got a stove for life. And in Africa, service like that is a rare commodity...

I want to make a big shout-out to all the people in the climbing gear industry, this website included - I know the hard work and effort that goes into doing what we're doing, so KEEP IT UP! GOOD JOB!
And even a bigger shout-out to my co-workers who works their butts off and always gives 100% to create one of the best businesses that I've ever worked in - YOU GUYS ROCK (pun intended).

From where I stand, people are cutting the costs, keeping the profit at a minimum, shooting it straight so to speak. The biggest factor to take in account: we provide as service that'll enable most people to come and get excellent advice(that took years to acquire), and have a vast amount of gear to choose from just so that joe public don't have to go through all sorts of rigg-marole to try and figure out who to pay duty to, and what size climbing shoe to wear etc. Can't speak for MSR, but I can speak for the rest of us and say that we all are doing a pretty good job in doing what we're doing. That bit about MSR and Amason not shipping directly to SA is what I call good business ethic from their side.

I've had a customer come around the other day, I spent about 25min helping him out, giving him my best advice and let him try on a few pairs of shoes(something major you can't do when shopping online). After he got the exact size he wanted, he promptly told me he's not going buy it from us, but he's going to let his friend 'stowe away' him a pair of shoes when he returns from the US or somewhere. It felt really bad after spending so much time and effort on helping him, not to mention all the work it took us to get all those shoes into stock. But people are free to do as they please I guess.

And we'll keep on trying to make climbing work in SA, all the way! So thats why I say, with my other brothers and sisters in the business:
LOCAL IS LEKKER!

@Turtle- well said.

Not to mention the cost of shipping this stuff, you have to fill a container.
Us sitting at the bottom end of Africa is a VERY long way from anyone else. Containers that come in by sea take between 6 and 8 weeks to get here. Many manufacturers only produce on order - add 4-8 weeks. Our customs have a turnaround time of 1 - 4 weeks depending on the current mass action/ strike taking place.
This is money NOT generating any income because it is not in your bank account anymore.
Then add import duties and VAT.
Now the business end - Only now can one put on a small mark-up and send out to retailers.

Support local.

i cant agree with dave and turtle. 167% is too waaay much.
i will investigate.
maybe the USA price was a sale price and not a regular retail price.
there's duty on some items, not sure about stoves, but it's not that much.
stay tuned.
and if it is indeed 167% then maybe there's a business opportunity for someone.
we love that about capitalism.
- robert

Thanx Dave!

Robert, theres obviously a hickup with the 167%. Can't be right.

My point was: the NORMAL markup everybody in the business usually puts in completely justifies itself(when in reason), if you take in the total service you get - from having the novelty of getting gear, and lots of gear to choose from, getting excellent advice and friendly, prompt service etc. The mistake some people might make when reading about someone that got 'ripped off' is think that ALL shops/retailers/importers/distributors are ripping them off. You, I, Dave, and almost all of the other suppliers we know knows that this is not true. I'm just defending 'LOCAL' a bit here. I'm def NOT defending the 167%. That actually does put a bad light on retail. I really hope thats a mistake...

drogonflies retail for around R2000+ in SA right now; std price in the US is $130 = approx R910 (the $110 is probably sale).

a buddy of mine complained in the week of not being able to afford a dragonfly, tent, sleepingbag & expedition pack - we did some sums and found that by buying the pack & stove online from a US-based retailer and the tent & bag locally got him within budget (he saves almost a R1000 on the stove alone). in that way everybody wins

i'm all for supporting local retailers BUT do not try to cover up bad business with the loyalty thingy. the price for MSR gear in SA is obscene. how come we can get DMM dragon cams at prices directly comparable to what guys pay overseas but stuff like the Dragonfly get a 100%+ markup?

Tax on noise pollution

the irony is that the DMM cams and the MSR stoves come from the very same local supplier,Outward Ventures. i have emailed them to get to the bottom of this.....

har har har har!

jacques, you're plea is stirring to say the least - and thanks! personally i won't buy something overseas if i got all the advice & fitting from a local retailer. i think it is bad form to go use somebody's resources and then take your business somewhere else. and that is why i still buy most of my gear here.

Turtle,

I think you are missing the point. I am in no means complaining about the extra 20-30% we have to pay for the entrepreneur in SA that undertakes those risks, is the 100% + that gets to me.

And I'm grateful for the local SA shops, even if not for their expertise, but the ability to fit climbing shoes and buying them at the same shop. (I've got extra wide feet as my wife loves to point out, so fitting shoes is a requirement)

Simple
If the local market for MSR stuff then is so small, (to have to warrant these excessive prices), then open up the market and let the odd person then buy the MSR gear directly from a US retailer.

Don't forget that the Rand to the Dollar has not always been 6.90 and that orders get made in advance.

I heard a story from one of the local retailers of a guy who ordered shoes online, but when they arrived he found that he had ordered the wrong size and phoned the distributor to ask if they could swap them out... the distributor hadn't even brought the particular model into the country!
Quite cheeky of him, but worth the chance I guess!?

I had a go at distributing climbing equipment in SA a while back and its not for me!

A few points:
- Firstly, its a job all by itself and not something you can do on the sideline, it requires a lot of time & effort

- You need to order the minimum quantity - for us it was around R30'000 (I believe its a lot higher today) - This gets you FOB (Free On Board i.e. no charge to deliver the goods to the nearest port (to the factory)).
- Then you pay shipping
- Then you need to get the stuff cleared - (generally this involves fighting with customs about different codes of 'what is and isn't' - quite unpleasant.
You can get a clearing agent to do it but they might not fight the good fight and this could cost you money (+ the agents fee).

- Then you need to market your goods (around now you are working out how much interest 30K would have earned you in the last 2 months?)
- The goods arrive (you praise your relevant God and its like Christmas as you unpack everything)
- A few months later, you've got a few items left and will do almost anything to move it! You ponder ordering another shipment - after doing the math, the answer becomes clear (because we were treating it as a side business).

In SA, because the market is small(er), distributors need to punt a range of products to make it worth while. You also need to front a lot of money (and by default you end up currency trading).

Side note: Climb.co.za exists because of the distributors and shops that advertise on the site

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Climb ZA - Administrator

Hi,

I understand that the example in question was an MSR stove, but I would like to use Apparel as an example.

If a garment is made in china for $8 (US dollars), the factory will probably pay around 15% to the brand licensee, so now the garment cost $9.60, it is delivered to the port of loading and it is sea shipped. the cost can be converted to ZAR for ease of explanation. If the importer took forward cover (to guarantee the exchange rate) the rate will be roughly 10% higher than the current rate (ROUGHLY), so make it R7.60/$ X $9.60 = R73. The importer in SA must pay for shipping, depending on the volume ordered, the freight will probably cost roughly 17% (unless huge volume), so that adds R12.40. duty on clothing is 45%, 45% of R73 is R32.85.so add the garment cost (R73) plus shipping (R12.40) plus duty (R32.85) = R118.25 plus roughly 7% for clearing and forwarding, so now it is R126.50.

If it is a specialised item, the local agent may sit on stock for 6 months or longer, that finances cost 12% per year, so 6% for 6 months or so, cost is now R134.10.

Agent now needs to advertise, market, PR, warehouse, service, replace units, courier to his customers (shops), pay salaries, make a profit etc. this is a minimum of 30%. he must also pay a sales rep. The agent probably makes 5-7% nett profit in the end.

We are now up to R174 (minimum). The agent then sells it to a store who then mark it up. probably to around R350 or so. Bearing in mind that storse pay Vat, which means on a 100% mark up, they make 43 gross profit. Roughly 10% of this goes to rent, another 10% to salaries, then add in credit card charges 3%, finance costs, stock loss and so, and teh retailer probably makes 7% nett profit.

the above figures are fairly simplistic, but pretty accurate, I ahve worked on both sides of teh curtain. the margins are thin. and this assumes everything goes right.

The above are the facts of the matter.

for a stove, it is all the same, except duty is 20%. Incidentally, I do not work for MSR or the like.

Cheers

no duty on a stove (or any hard gear) - just 14% VAT. retailers in the US (or anywhere else) sits with the same issues 8848 have listed here. maybe less tax but then labour costs are way higher in developed countries. US retailers sells the dragonfly for R910. stop making excuses and get competitive (stern face expression)

The 167% does sound exorbitant but... (I can only relate this to my experiences purchasing skating equipment). Retail prices in the States are between one third and a half of that of the prices in local shops. Shoes (skate shoes = takkies, a fairly ubiquitous and universally appealing product) are typically one third of the price in the States. The snag with importing through a website is that most US online retailers will only send stuff here via UPS courier which costs a bomb, by the time you have your mitts on your 'cheap' gear (after UPS, customs, tax and local courier dispersal fees) you end up paying the same if not slightly more than local shop prices (so you may as well buy local!).

Obviously if you have a friend coming over from there, getting them to toss the packaging and slip the goods into their suitcase will save you a bunch. I think I know the person Jacques refers to who was trying on shoes, he did actually express a tinge of guilt over his actions but Im also sure he's not losing sleep over it! Unfortunately as a retailer you can only look forward to more of the same as online shopping gains in popularity. It sucks to spend your time unfruitfully. One can only hope the window shoppers will be so impressed by your service that they will come back again and hopefully spend money next time!

Which still doesnt fully explain the discrepancy in price between here and there, is it shipping costs? Lack of a big enough market to achieve significant discounting? Customs we know about yet it still doesnt seem to add up. Aah well, the joys of living at the arse end of the world!!

On Behalf of Geoff Ward, Owner of Outward Ventures, importer and distributor of MSR:

As I am about to head off up Jan du Toits Kloof and still have to finish packing, I will not be able to go fully into the costly logistics involved in bringing MSR into South Africa, but I could do so when I get back.

The bottom line is that we do not have a large margin on our MSR stoves that we bring in from Europe, In fact I was pleased to see that the price of our DMM DRAGON CAMS were mentioned in a favourable light, with this in mind I did a comparative analysis of the relative gross profit difference between the Dragon Cams and the Dragonfly stoves and found this to be less than 2%.

This analysis in my mind points to the fact that we are consistent in our margins and that since the DMM Dragon cams are considered to be well priced by international standards that therefore the current price on the MSR Dragonfly stoves in South Africa has more to do with the costs of bringing them into South Africa rather than any profiteering on our part.

Personally I would love to see the pricing of MSR stoves come much closer to those that exist in the USA.
However the realities of the costs of bringing them into South Africa are such that in spite of our ongoing efforts to do so this will not be easily achieved.

However we will keep on trying....................

lets compare apples with apples here

Jetboil helios on Amazon is $119.
Jetboil helios local online R2025.00

also a huge "discrepancy"

How many users on this forum thread are actively involved in importing "dangerous" goods?
and for all those people that bought stoves overseas, who will you contact when something needs servicing or spares?

Catherine, at R833 vs R2025, I'll just buy 2 stoves (spares and so) and 3 cases beer with the change.

@pierre: ROFL, good one! However, you omit shipping, VAT and customs with R833. You're rather looking at (R950+customs) per stove and then you'd have to add R200 - R300 for shipping.

Still, at < R1500 for 1 stove you can buy 5 cases of beer with the change. Then, when the stove gives out, you can dig into the beer and the broken stove will no longer be an issue

_________________
"I have no more friends, and my nuts are too small!"

Catherine, I think you also mentioned in another thread that you haven't seen problems on these stove in ages. So for durable items, proven in the field, items such as this, after sales service is less of a concern.

Anyway, from your post, its seems then that MSR themselves are to blame for the high cost and/or the method/lines/origin (Europe?) of import used.
I mean you could probably import directly from Amazon, distribute and make more profit. Maybe a little chat to MSR then?

Anyway peace, and although my first post probably doesn't set the tone. I do want to commend the climbing industry, that services a very tiny market, that they do generally provide very competitive prices on goods.

And I'll continue to support them (unless of course a relative happens to fly in and out of the States). and I'll be importing my MSR pump + Thomas & Friends Trains for the kids (let’s not even start on that price difference) from good old Amazon. But I'll try and make it the exception rather than the rule.

Interesting topic and I think you will always find people who are unhappy. I think most post are showing that it is not a simple solution and it is not always a matter of profit taking, but rather various limitations to trade.

It is also worth noting that is not a fair comparison to compare local prices with US prices. Most of these brands are US based brands and therefore have no need for a distribution partner, taking one link out of the supply chain. These brands are setup to cater for the USA market and other markets are a nice to have. Places like South Africa sometime provide them with less turn-over than they get from some individual stores in the USA, we are not high on priority list. They have volumes and shipping in general is MUCH cheaper based on the volume of cargo ships heading to USA, it's all a matter of scale. Very few products can compete rand for rand between South Africa and the USA.

Take the MSR dragon fly for instance (worth noting I do not work for Outward Ventures and have no insight into their business), but I did a quick search on the web and this product have a recommended RRP is the UK of 130 pounds (R1423), compared to $130 (R899) in the USA. We cannot compete with the volumes the UK does and even they have to sell it at a premium of 60%. Suddenly this places more perspective on the price. I think Geoff has shown with DMM if he can match pricing he will, surely it makes more sense for him to sell at R899 and actually move volume, clearly it's not possible.

How many dragon fly's realistically get sold in South Africa each year!? 50, 100, 1000? Chances are they have to bring it in from Europe because minimum numbers from USA or EAst is simply to high. Suppliers will charge you much more for 50 units than they would for 1000 units.

How much money can a distributor make, even if they somehow sell 1000 units/year, let be honest it will be well short of this!? It's not a straight forward business, which is why most distributors in South Africa has to have 10+ agencies/brand to make end meet. 10 brands also means 10 different shipping locations, 10 different orders and seasonal limitations etc.

So all in all it is not good if consumers get taken advantage of, but sometimes the answer is more complicated....

Maybe thread hijacking, but I wanted to ask a semi-related question about climbing gyms. The price of joining for a single session(or monthly/yearly membership even) at most business-run climbing gyms seems to be really high to me, chasing me away when I could use MCSA/University climbing walls for a mere fraction of the price. I realise that it is difficult to run a profit-making climbing wall/gym, but the costs still seem exhorbitant for membership. Would some of the gyms mind explaining the high costs a bit?

I know remarks have been made in the past that these gyms are not even profitable at the costs they charge - they are more for the owners love of climbing etc etc. Is this true?

That is true... Wonderwall nearly saw it's gat a month or three ago.

If you live in the south of JHB, the new Virgin Active in Glen Vista apparently will have a climbing wall when it opens.

No shit.

http://www.climbingwall.co.za/index.php?option=com_content&view=article&id=37:climbing-wall-at-virgin-active&catid=9:latest-news&Itemid=36

edit: Oh crap, it's miniature
http://ow.ly/i/4KKF

"your prayers have been answered"
Hahahaha! Go Virgin Active!

_________________
...Chalk is cheap...

Evolv Pontas SA price: R1,140. that includes 14% vat and 1/3 duty. so before VAT and duty about R700.
Amazon.com price US$104 = R728. so about the same.
Fiveten Anasazi SA price: R1,290. pre-VAT and duty = R850.
Amazon.com price US$132 = R924. SA is in fact CHEAPER.
so i think the problem is in fact MSR and not the SA climbing retailers.

while we are at it: you can do the same price comparison with climbing gyms. SA prices are very much on par with international gym prices. at CityROCK we charge R80 entrance. i co-own a gym in San Francisco and the price there is $19 - that translates to R133.
also; the small boulder walls at the MCSA or UCT have no monthly bills to pay as they are entirely subsidized by the larger entity, the club or the university. we private gyms on the other hand have to pay significant monthly bills: staff, rent, liability insurance, electricity, purchase of new grips and ropes, clean existing grips, etc. our rent alone is tens of thousands every month.

well, VAT is not unique to South Africa - US sales tax varies between 0% and 8% depending on the state - buying in good ol' california sees 8% sales tax (i again get the feeling us saffas are ripped off by VAT )

anyways, i'm 100% sure no local retailers or importers are ripping us off. what i'm challenging is a grossly inefficient market in some instances. if i can buy a dragonfly from a US retailer; throw in VAT & (expensive) shipping, and it still is substantially cheaper than what i would pay locally then something is wrong.

Work the system

Loyalty, like Respect, is earned, not granted!

So Robert I see that according to you MSR is also responsible for the "discrepancy" of Jetboil.

ok Catheine, we agree that the problem children are then MSR and Jetboil (sure that must be others as well), and the A grade pupil are Kovea = Never heard of the brand before but saw a very nice (and light) fold up gas stove for R190 at one of the retailers. I think I going to buy that one as a nice backup, or for when the drone of that jet engine pretending to be a dragonfly stove gets to me.

The answer is even more simple, buy a GAZ! I got mine from Shoprite for R25, you can then take the other R1995 and spend it on something worthwhile, like going on a climbing trip instead of sitting at home complaining and writing all this crap. Get real ppl!

This thread just illustrates how good MSR products are. Not without reason - they are quite simply the best in their field.

I mean, the time spent griping about and researching prices on a particular excellent product could quite easily be spent trundling off to your local chain store and purchasing an el cheapo product.

Yes, most climbers probably don't have vast amounts of liquid cash floating about, but MSR is a fairly aspirational product, and well worth saving for. In the same light as saving for a pair of top-end aggressive shoes, rather than cheaping out on a pair of entry level ones. Why would you do it? Because it's better, and it's worth it.