My latest thoughts on Gerry Harvey's tax plan to hide behind the skirts of small retailers. Where might I ask will they be hiding.
Japan Foreclosed Guide Profiting from the Gold Boom Mining Fundamentals eBook
Showing posts with label Retailers. Show all posts
Showing posts with label Retailers. Show all posts
Friday, January 7, 2011
Thursday, January 6, 2011
Customers give Harvey Norman the stick
Gerry Harvey's demise will ultimately be tied to his ego; or should I say his pretense of one, which compels him to be self-righteous. He will show that 'perceptions are more important than ever'. A web poll by the Sydney Morning Herald shows as much. The reality is that he has highlighted to non-discerning customers how irrelevant traditional selling is. I personally walk through his stores all the time; but I never buy. I have this curiosity about going into stores, just looking. I would never think to buy from such stores. I do the same from Dick Smith. They are all over-priced. They will all suffer. It might actually be the 'spoke in the wheel' which causes the big shift to online commerce in Australia. What a paradox.
This story suggests Harvey was always very negative on online commerce. I am not a retail analyst, so its interesting to observe that all these retailers (e.g. Fosters, David Jones) failed with their acquisition of online businesses. I think their attempts to buy competitors was always a very defensive and deluded strategy. Akin to plugging up holds in a dam wall. Know doubt the equity markets at the time probably loved the strategy, thinking these companies were trying to remain relevant.
The suggestion that the distances in Australia are a setback is false. A great many shippers have stock, and if there are low margins delivering in Australia, they can always drop-ship from the supplier. It is argued that 'many people are still wary about buying online', but Harvey has given them reason to take a second look. Indeed, buyers should know that they can always charge back any goods which are not delivered within 30-60 days with Paypal. Of course the seller ought to have the first opportunity to correct the problem, whether its a faulty product, etc. If consumers knew that they might just be more willing to take the plunge.
I think this commentator is on the mark:
"Harvey Norman's problem isn't 10% worth of tax, it's that his customer base are people too stupid to shop around" and I would argue too gullible to test his bluff on matching 'his price guarantee". The guarantee probably comes with so many pre-qualifications that is not even a real or effective guarantee.
Another commentator confirms my suspicions. The damned fine print. The secret to the modern businessman's success. Bury the customer in paperwork and loopholes.
"Dick Smith Electronics' excuse [is that] they will only price match if the competition is within 100km radius".
Thank you Gerry Harvey for showing that even idiots can succeed. You are the best evidence for capitalism and the utter uselessness of the welfare state.
Gerry Harvey remains defiantly self-righteous...big mistake!
That was our shortest protest action against tax charges. Harvey Norman has backed down from proposed tax lobbying for a GST on imported goods. He said he is hurt by the criticism. Well, I wonder if that was his pride. He says his message was 'poorly communicated'....in fact it was 'poorly conceived'. He showed himself to be a shallow, pragmatic thinker. He of course does not have a monopoly on this. Sadly, most business people these days are shallow, pragmatic thinkers. No doubt he will console himself with some takeover, and ever reflect on why he stuffed up with his lobbying scheme. He argues that the campaign was 'bad timing'. No Gerry, there is no good timing for a bad idea. But such is the philosophy of pragmatism that an exponent of some idea would argue that a good idea tomorrow is not a good idea today. I don't preclude that timing can be a factor (i.e. pertinent context), but exactly what have made his timing better. It was a matter of diminished intellect. He ought to have argued against taxation, and focused upon the unfairness of ALL TAXATION....in as much as it is all imposed, its all extortion, and it serves no one...not the poor, not politicians. Its an entirely false economy perpetuated by shallow-minded people.
By all means, prove me wrong. Harvey did not take the criticism well. He said in the SMH:
'The rise of social media had made people like him more prone to personal abuse. ''You might have got a nasty phone call or a letter back in the old days but now anything slightly controversial, these people, whoever they might be, they go for you zealously and with hatred all over Twitter,'' he said. ''If you are a CEO of a company and you speak out and then the board gets involved … it is suicidal'.
The fact is that politics impacts people's life. This is personal. Taxation is coercion, so anyone who lobbies for change risks changing a balance. There is only one justifiable change - the repel of tax, not its 'adjustment' or 'addition'. If his ego is hurt, tough, he should understand that he has the greater power to hurt people's lives. A responsibility such as his demands a higher level of thinking. His subordinates and his own judgement have failed him here. There is no hatred on my part for his efforts. On some level I respect business people to the extent that they exude a sense of purpose, conceptual skills, respect the rights of others (i.e. empathy), exhibit an efficacy in business, and develop effective business systems.
The extent to which they court government favours, lobby for tax 'adjustments' rather than repels, and do not display the conviction to support freedom, but rather to befriend extortionate government ministers, is the extent to which I think them 'shallow' people who lack depth and humanity. On that basis I say to Gerry Harvey 'Get a real education', we have had a practical product (Industrial) revolution, join the 'revolution of ideas' which will eventually sweep away current contemporary values.
''Because of my profile, I then get all these threats and people home in on me. It becomes me, Gerry Harvey and Solomon Lew - billionaires, greedy, ugly, old, out-of-date, c---s, and the people writing this seem to think we have been ripping them off for years and that we deserve this,'' he said. ''I think to myself, 'you don't want to get up every day and live this life'.
I would never criticise a person for being greedy...socialist nonsense. He did however fail to adapt to the current market trends, as he is holding onto high cost showrooms which will quickly lose market share because its high margin shopping compared to low-margin, online shopping. So he can play the victim, but really he should have seen this happen. We don't have to worry about him growing broken though, he can convert his stores into apartments I guess. I trust he owns the stores. Poor guy if not....he is about to lose a lot of money. Hope he escapes with spare change. Insofar as he is accused of ripping people off, the reality is that his stores were always advertising and 'product variety' driven. I think he probably was never very effective in business because he probably always struggled with high staff turnover and low efficiency. Hence, the high margins. I always respects the far better prices I got from Bing Lee for white goods. The reality is that product pricing comparisons with overseas show a huge discrepancy, so let him account for that. He has not. He just laments the criticism of him. The reality is people expect competitive pricing, and they feel they are extortionists because in some sense, they know and understand there is an absence of competition in Australia and NZ.
''When people criticise you like that, it makes you think, 'do I really want to do this? No, I don't'. I have got so much heat that I think I have to sit back now".
Nonsense. This is a time for him to reflect on the more reasonable criticism of him. Not to do a dummy spit and evade the issue. Learn!
Mr Harvey said the gripe of the retailing coalition was not about ''online retail versus bricks and mortar'' but rather about closing a tax loophole that did not support Australian jobs or the local economy. ''What we are talking about is someone buying a guitar in New York, for instance, and having it sent over here 30 per cent cheaper. It is giving that overseas retailer the advantage. It makes you think, 'I am paying all the bills, creating jobs, and this guy is getting the sale and doesn't contribute anything to our society'.''
He argues pragmatically that it is about a tax loophole. The problem with this is that his campaign merely closes one loophole so the government can open another. He needs to appreciate why there are loopholes, and lobby to change the system. The way he structured the issue - it is an issue of online vs 'the majors' because he sponsored the issue. It is not about jobs. If Australia has to lose some jobs, so be it. They were marginal, low value jobs which should have disappeared years ago if he was smarter. The economy will always create more jobs. The unemployment rate is not exactly high. He rationalises that this guy offshore does not create jobs for Australia. Who cares if he creates jobs or not. Employment is not the customers responsibility...and its only his because he is over-exposed to the high-margin, traditional, model of retailing. They are cheaper, not by the 10% GST, not by 30% as he suggests, but more like 70-80% because he is not competitive in his warehousing, distribution, retailing operations.
He agrees it was "poor judgment to launch the campaign in the post-Christmas sales period".
I disagree with this. It was poor judgement in any seasonal context. The issue is tax imposition, though certainly recession and Xmas might elevate sensitivities. But that was not the basis for criticism, so let's not build straw men.
"Mr Harvey said the launch of his own online store in the 1990s had been another example of bad timing. ''When I opened my site, I was doing $30,000 a week turnover, so I closed it and I opened it up again … I got the same turnover so I closed it again. Now I am opening another one as we speak because in this business it is as much about timing as anything else".
What nonsense. Plenty of others opened online stores and have done very well in the 1990s and 2000s. The problem was not his timing, it was his business model. He wanted to retain his high profit margins, so he was not relevant commercially when he opened, so he was forced to close. If he cut margins online, people would just buy online. Clearly he needed to offer some justification for people to buy in-store, and he can't at his profit margins. The reality is that it might have been difficult to integrate online and showroom based stores. The reality is that his high-margin model is not sustainable. He will be left selling to the elderly who cannot use a computer, and need the unit installed.
One of the commentators on this story made the point:
"The missing link in this argument is suppliers of branded goods. They are just as responsible for setting the prices we pay in Australia. Why are brands like Bose so much more expensive in Australia than anywhere else? Because the suppliers charge cost prices that are more expensive than retail prices overseas! Where the public wants the brand (eg Apple, Bose) the retailers either have to pay the cost or the supplier won't sell to them!!"
I actually agree that this was a factor in the old days when Sony were supplying product from Japan, and they marked up the price margin on new products because Australia was not a strategic market, and given their limited supply capacity. These companies wanted to be leaders in the USA and Japan, as they were the leading markets. That is no longer true. Today, the Chinese just indiscriminately dump product on the market, and this has allowed middlemen to cut into Gerry's margins. The implication was that Gerry was a lazy retailer, living off the easy sales. This is why I say he did not understand the market changed. In a few foul swoops, he has desecrated his repudiation. His first mistake was his comment that poor people never learn; that they are defined by their early years. i.e. Once a bum, always a bum. A lot of people will never forget that. He seems to think he is a revolutionary. He sells products for Christs sake, and employs idiots to do his planning, now to his detriment. I personally have little interest in selling stuff. I do it because I have to live. But its so incidental. This guy has no respect for ideas. Well, he will be defeated by his ignorance and self-righteousness.
It is amazing that the salesman who one market share with his 'in-your-face' promotions will go down in flames because of poor publicity. I guess salespeople are famous for having a pretense of an ego. His role as a CEO has allowed him to lose his old touch. He might not have made that mistake years ago....he was probably closer to the customer. He is out of touch, and selling by an old paradigm....failing in the new.
Wednesday, January 5, 2011
Retailers don't get it - dumb nuts
The retail association in Australia claims that some Australians are 'not getting it'. The reality is that they don't get it.
Myer head Bernie Brookes argues: 'I get quite upset when I read some of the disparaging comments about Gerry Harvey and Solomon Lew because, whatever you think of them personally, they started with nothing and have become successful.''
What has that got to do with it? We are not here to give Harvey or Lew a medal. This issue is a point of law. The public is arguing that these companies are not competitive, but they feel compelled (before the advent) of the internet to pay high prices.
Mr Harvey was not surprised by the backlash ''because people are not quite getting it''. He said the group was not arguing against online shopping; it just wanted a level playing field. ''You've got a retail store offshore that doesn't pay duty or GST competing with an Australian store that does,'' he said.
The reality is - he does not get it. There might be a level playing field, but your lobbying point is not the way to resolve the issue. The solution is not a new tax, it's fixing the basis of the tax system. i.e. A user pays system rather than an 'extortion racket' which these guys passively accept since they are morally indifferent. They want to function as 'middlemen' and not concern themselves with the dirty aspects of tax. He does not realise that we are not so approving of paying tax....we don't have all the deductions which a growing business like Myer does, and I personally don't even want to deal with such a complex system. In contrast, he has an army of people who can help him evade taxes. I personally don't want to engage in such a false economy where I have to collect receipts. Life is too short to spend it summing receipts and reading through 200-page tax packs to account for any arbitrary changes in taxation legislation, because there is always some new exemption or revision to account for some new 'corporate' rout, i.e. a loop hole.
Tuesday, January 4, 2011
GST on foreign imports on tax efficient
According to the SMH, the federal government's peak tax advisory body, the Board of Taxation, says the cost of collecting the extra GST would be likely to outweigh any benefit. The problem is, nothing about government is efficient. That is not to say that certain courses of action are more efficient than others, merely that a false economy is acceptable if it serves the governments interests; never mind what it does to people's lives.
I am a case in point. I will spend a lifetime repudiating an unjust system of governance when I could be engaging in more productive activities, if the 'problem of governance' had already been resolved. Sadly, people are permitted under democracy to preserve any subjective indulgence they please, and any standards are deemed to be 'dictatorial', as opposed to being merely subjective impositions. By this subjective notion, it is an imposition to allow people to fend for themselves. And yet these people don't seem to repudiate the indulgent parent who 'spoils their child' with kindness; nor the government with constrained resources, who 'spoils welfare recipients' with unaccountable, 'unconditional love', and in the process makes them unfit for living any form of meaningful life....if one cares to define terms and seek meaning beyond the intrinsic notion of 'value in itself', as opposed to functional realism. i.e. Good for objective reasons. so much for science.
The good news is that "the Board of Taxation recommended last February that the figure not be changed". The bad news is that this is just one case of taxation creep, and having being complicit in a global financial system meltdown, the government is going to be looking to raise more taxes.
Australian retailers extorting wealth from consumers
According to this latest article in the SMH, it is now the large retailers in Australia who are now trying to extort wealth from consumers in Australia. I find it bizarre that it is a business group that is not just looking for tax concessions, but is prepared to advocate additional tax. We so detest these efforts, we have dedicated a new blog to exposing the unethical conduct of Harvey Norman and these other retail extortionists who are seeking market concessions.
Subscribe to:
Posts (Atom)
’Global Warming Misconceptions - View the table of contents!
Governments this year have ramped up their global warming propaganda, but in truth, just how certain is global warming. In the process of preparing a consulting report, we undertook some research and were startled by government policy. We will show that the propaganda being financed by government is shamelessly creating hysteria for the sake of political expediency.
