Rand vs Dollar and Price fluctuations

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SuperGuy

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So i recently ordered a graphics card from Amazon USA. Doing my homework on pricing and such I saw that the card in question was R1000 cheaper in the US compared to local (exact same card). Yeah I know the dollar as well as the pound came down a lot recently but here is my question.

Even with deflated Dollar/Pound prices, why do these prices not reflect locally. It's like distributors here in South Africa always tell you "oh the price increase is because of the Rand/Dollar fluctuations" and then they slap on a couple R100 bucks or more on their product line being sold.

Why oh why does it not work the other way around. For instance in my case? The Dollar dropped in value compared to the Rand so with the distributor's logic the same product aught to be cheaper yet this is not the case when comparing prices on a weaker Dollar to Rand ratio.

Sure the supplier who bought the item a couple weeks/months ago had to pay more for said item (because then the Dollar was not so weak compared to the Rand), but they still get massive discounts if they buy in bulk as well as straight from the manufacturer.

Anyone care to elaborate?
 
Answer : Greed

Same happens with Cars. Price goes up when ever the rand weakens. Never ever goes down when the rand gets stronger.
 
I bought a 256GB Kingston SSD for half the price it gets sold here for. When I picked it up at the post office I expected to pay customs and all those other thumbsuck values they usually give you. I ended up paying nothing.

Now I'm kicking myself for not going for the 512GB or 1TB versions. This was from eBay (US). I will do this monthly now!
 
There is a little more to it than just greed. For the full effect of the R/$ value to become effective takes quite a while. Remember shops have stock bought at different rates. They take the average cost to determine what the sales rate is to offset the cost of stocking when the R/$ was high.

A simple example:
Shop A has 10 items (left in stock) bought at a higher R/$. To sell these items to make any profit would require them to sell at R1000.
Shop A orders 5 new stock items with a improved R/$ and now these items can be sold at R900 to make the required profit to keep the business running.
In stead of offering 10 items at a higher cost and the new items at the lower cost they average out the number to try and cover their costs for the more expensive stock. In this case all the item's prices will drop to R966 which seems negligible decrease to us consumers when you look at the current cost of the item based on what one item would cost if you buy it now directly.

That is the costs of business and the risk of ensuring you have stock when a market fluctuates as ours does.
 
I'm not a big fan of the Post office. Through Amazon it gets done at least through Aramex. But from what I've heard is that the SAPO has gotten better with stuff not getting stolen as much any more.
 
Not just that, local places that buy internationally usually work with an agreed upon 'exchange rate' that's valid for months.

So these weekly fluctuations don't affect those agreements.
 
Chevron said:
Not just that, local places that buy internationally usually work with an agreed upon 'exchange rate' that's valid for months.

So these weekly fluctuations don't affect those agreements.
Click to expand...
Currency futures. You can fix the exchange for an entire year by using these.
 
YingYang said:
Currency futures. You can fix the exchange for an entire year by using these.
Click to expand...

I see, well that makes more sense then. Why the manufacturers don't drop prices when the Rand/Dollar drops. But it still does not explain why some of them say "price increase because of the weak $ to R ratio"?
 
Price goes up when rand weakens, but they never lower it again.
 
ponder said:
BS they do. I paid R4800 for my GPU, some months later it's R4100 after the rand strengthened against the dollar.
Click to expand...
My subscriptions and services for cloud infrastructure hasn't dropped.
 
When the exchange rate goes up it's easy to adjust your prices upward and most take advantage of that. When it goes down it's not so easy as you'll likely take a knock. The rate hasn't been steady for months now so no matter when you purchased the stock it will enter the retail chain when the rate is lower. A tough predicament. But they've been coining it while it was on an upward trend so I only think it's only fair they take a bit of a knock now on the downward trend.

This is also why I like a stable rate as it gives everyone time to adjust. I'll prefer a decline of 1c a day over the ups and downs we've seen.
 
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