Latest Wii news: Wii is outselling PS3 2 to 1 in the US.
Question for Australian readers: Harvey Norman, arguably Australia’s biggest retailer of computer + electrical goods doesn’t stock Nintendo’s Wii, not just the console but the games either. The mind boggles as to why, but knowing that the Wii is a huge success, indeed supply is still a massive issue where I live from people I’ve talked to, will Harvey Norman not stocking the Wii affect the bottom line and therefore its share price? OK, so folks in Sydney and Melbourne have a huge range of choice in terms of retailers, in Regional Western Australia we don’t, and Harvey Norman is the biggest local seller, and yet I can’t buy Wii games there, I have to go to Target, BigW or EB Games, and that’s time I may have spent in a Harvey Norman store, not only buying Wii titles but also walking past the variety of other goods Harvey Norman sells. It’s money I’m spending with Coles Myer and Woolworths and not Harvey Norman. The PS3 is due out this week for memory in Australia, nearly $1k for the base model, can’t see it being anything but a failure here as its been in the States. Harvey Norman won’t win selling PS3’s when the hottest console in town is the Wii. We get a Good Guys opening here next week, wonder if they stock Wii games? They’ll certainly be getting my business on a range of other goods 🙂
I can tell you part of the reason why. Harvey Norman (Gerry Harvey) is one of the most agressive retailers in Australia. He really thumps (and I really mean *he* does – he still actively runs the company) a ton of pressure on suppliers to lower their prices for the ‘privelidge’ of gracing the shelves at Harvey Norman – a bit like Wal-Mart in the USA, except with a bit less clout. Harvey Norman require of console makers, as well as other suppliers, a minimum profit margin for the store – I have hard that the margin is as high as 16%. If you are Nintendo and you are taking a hit on every console sale, you aren’t going to like these terms too much, until you realise that in Australia we have a good variety of outlets (not only a variety of outlets, but they are also mostly independantly owned or are part of small unions) and that Harvey Norman might not matter that much, to add to that you look at your JP sales figures and you realise that if anything, you should be in a commanding position over the retailers, and in conclusion you figure you can tell Gerry to STFU and to stick his PS3 you-know-where.
It may have worked for Harvey Norman back-in-the-day but thankfully the Australian market has opened up and competition is benefiting consumers in more ways than the more obvious ways
I can’t stand Harvey Norman, never walk into their stores and I never buy there – just so that you know that if you buy there you are not only being ripped off, but you are also supporting their stance against suppliers (many of whom are in cut-throat industries and aren’t as big as you might imagine). Most supplier will tell you that they would rather you buy their product from somewhere else 🙂
I think that the exploitation of purchasing power is something that the government needs to look into, or they could do more to step out of the way of potential competitors (foreign owned or not) and not have the problem in the first place