Wednesday, 13 June 2007

To buy or not to buy in the city...

The other day, I was in a conversation with a friend about how pricing of certain category seems to be always more expensive, in particular items for weddings and babies. At this stage, our son has just reached 20 months old so we recount our experiences for baby item purchases.

Before our son was born, we always thought that the major ticket items for a baby are the cot, the change table and the pram. Most baby shops will do a package deal for you if all the items are purchased in one hit. This is a fair enough deal. Where we live, suburban Melbourne, there are an abundance of baby shops around. After doing the rounds of shops and deciding which brands we want, we started to negotiate a price, but never able to get a good price of the package. On the surface, the shops appear to be working together to sustain a high price ;-)

On trip to visit the my wife's family in Ballarat, we thought a visit to the Ballarat only baby store would be wise. To our surprise, the Ballarat shop was not only competitive, they were significantly cheaper than the Melbourne stores. In the end, we purchased the package from the Ballarat store. Ballarat is a country city about 1 hour drive away from Melbourne.

The pricing of the baby goods in Ballarat certainly goes against logic. Normally, you would assume that because Melbourne's population (about 3.5 million) is much larger than that of Ballarat (about 90 thousand), the pricing in Melbourne would be better as the market base is also bigger. I also assumed that competition among the baby shops in Melbourne would also reduce the pricing as well.

Perhaps, the market base per baby shop is much higher in Ballarat than it is for Melbourne stores. The Ballarat store has a customer base of the whole town as it is the only baby store in town, and the turn over of goods is also much higher. This may not be the case for Melbourne baby stores.

The lesson that I learned was when shopping for items, in particular, high price items, it may be worthwhile looking at shops that are in the country rather than just to concentrate on the city shops.


Anonymous said...

Incomes in Ballarat are lower, so the shops price their goods accordingly.

tehnyit said...

Excellent point. Maybe targeting a town with a lower socio-economic makeup will provide us with some bargains.