Australia - PricingAustralia - Pricing

The Australian market requires that companies be price competitive, expect lower profit margins, and expect sales of smaller quantities.

In addition to Australian domestic supply, products from all over the world are represented in this sophisticated market, where sellers and end-users alike are all searching for something new. It is important for US companies to adapt their pricing to the local market, which is active and highly-competitive.

To structure their prices competitively, suppliers must consider all the cost elements that imported products have to bear. The key factors are: freight rates; handling charges; import tariffs in some cases; a Goods and Services Tax (GST); marketing costs, such as advertising and trade promotion; and agent or distributor commissions. US exporters should note that sea freight rates from the US to Australia are high when compared with those from within Asia, and even from Europe. The cost of living is generally higher in Australia, and this is coupled with higher wages.

Australian wholesalers and retailers traditionally have sought the highest markup the market would absorb, rather than thinking of volume buying or selling. This pattern is changing as open markets and the influx of high-volume businesses particularly in the B2C eCommerce sector have alerted the increasingly cost-conscious consumer to competitive discount sales and services. Suppliers need to be able to deliver quality products or services at attractive prices. To compete successfully, exporters should consider granting maximum wholesale discounts, keeping in mind that what may seem to be a small transaction to the US exporter appears as a major order to an Australian buyer.