Online retailer Kogan is now selling products from major electronics brands alongside its house brand, in a move that will significantly undercut traditional Australian bricks-and-mortar retailers like JB Hi-Fi, Harvey Norman and Ted's Cameras, as well as behemoth manufacturer-retailer Apple.
A post on the Kogan store's blog details the new arrivals: products from major electronics brands (initially digital SLR cameras and tablets from Apple, Samsung, Canon and Nikon, although a more diverse range of products is expected in the future) would be sourced from 'higher up in the supply chain' and offered for sale in the Kogan online store. These products include the popular Apple iPad 2 and the Samsung Galaxy Tab 10.1 tablets.
Kogan's prices for these products are significantly cheaper than Australian recommended retail prices — for example, its price for the Nikon D3100 digital SLR is $489 — almost half the price of the $949 RRP charged in Harvey Norman's retail stores. According to Kogan, the same camera is $777 in cut-price retailer JB Hi-Fi. It is likely that Kogan is sourcing its products from international distributors and shipping them in under Australia's parallel importing laws, which allow most manufactured goods apart from cars to be sold in Australia no matter the distribution channel.
Another product offered in Kogan's online store is the Apple iPad 2. Apple keeps a tight leash upon pricing in various regions around the world, and sets different prices dependent on local factors like currency exchange rates and distribution costs. Kogan's parallel imported iPad 2 costs $659 (for a WiFi-only 64GB model) where Australian Apple Store pricing is $799 and JB Hi-Fi sells the tablet at $784. The same product is US$699 in the US online Apple Store. The controversial Samsung Galaxy Tab 10.1 is also on sale in Kogan's online store.
A draft report released by the Australian Government's Productivity Commission discusses Apple's international price disparity, and concludes that among other factors it is the long chain of distribution that chiefly influences local pricing: "A seemingly minor difference in manufacturer prices charged for goods at the beginning of a supply chain can also have significant flow-on effects and, compounding with higher costs throughout the supply chain, lead to large differences in the end retail price of a good for consumers." Apple did not respond to a request for comment by the time of publication.
Kogan would not disclose the source of these new products, simply stating that fewer parties were involved in the process of getting products from the manufacturer to the consumer: "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.”
A Kogan spokesperson told GoodGearGuide that despite the undisclosed distribution route that the products took, warranty concerns wouldn't be an issue. "At minimum, there is a 12 month Australian warranty for all products. Different products have different warranty arrangements. For instance, the Apple products have a world wide warranty - you can simply take them into your nearest Apple Store. For some other products, you just contact Kogan if there is a fault and they will replace it with a brand new unit."