My name is Nadine, and this is my husband Marcel. It’s been a while since I have done an interview, I thought we would do one on something that many customers have expressed and interest in, and that is what is involved in getting goods in from overseas for our customers. So, let’s start..
What are some of the countries that we need to import from?
Predominantly, China, but our other main suppliers are from the UK, and the USA, some are even from Serbia and other lands.
Is the import process the same for all of these?
Shipping from the USA to Australia is extremely expensive. Forget pallets, you need to go with small air shipments, really. This seems to be one of the reasons that so few products that are heavy make their way here from the USA when it comes to Astronomy – it is just too expensive. There is also a massive immediate cost – for even just one pallet – then you would need to order many more pallets, with the import shipping price only going up slightly. So, it’s not much more to perhaps order in 8 pallets rather than 3. Of course, are you really going to move such large quantities of goods from the USA? Probably not. In some cases, it is better for us to order US products from our suppliers via the UK, especially if they are small products.
So, that seems to be an explanation of larger products?
In a way. Even small air packages are expensive from the USA. The UK is cheaper in that respect. For both the USA and the UK, pallets are not viable for us. China, yes, we can do pallets.
Is getting something in by Ship the same as by air, that is, as far as process is concerned?
No. It’s completely different when dealing with pallets. There is also a great variation to the possible cost with a lot of shipping companies. Sometimes, and import cost as far as shipping goes looks good – but then you could get completely stung when it gets here, and be charged a fortune. We don’t do business that way, we rely on predictable, steady costs. So, we have formed a relationship with an excellent Australian based shipping company that has offices in China, and we work with them whenever we have a load. We stick with what we know and what works.
One issue, regardless of whether you do ocean or air, is currency. When you get a bill, you need to pay it. What if there is some crisis and the Australian dollar isn’t worth as much in relation to the US dollar? Chinese suppliers all want to be paid in US dollars. So, you need to pay in US Dollars. How many US dollars you get for the price, depends. And you don’t know what a currency is going to do. You can see the Australian dollar lose value, but should you buy now, before it collapses further, or wait until it recovers? Will it recover in days, weeks or even months or years? It can be very hard as the decisions you make will be with you for a long time and force your hand when it comes to what you have to charge customers.
For some reason, when you order things via the ocean, there are a great deal of additional charges that go on top of the regular costs. You need to pay for certifications, for example, a certification that the product you are importing does not contain, for example, asbestos. Certification that you are getting it under certain agreements between China and Australia so that excessive duties do not apply. You need to deal with clearance fees that an agent will file for you to make sure that there won’t be issues when it arrives here. You need to pay GST for the goods that arrive, which can add thousands. There are origin charges, port and wharf service charges, which is sort of the loading and unloading costs. Then, lodgement and entry costs. It all adds up.
Has it gotten more expensive over time?
Let’s see – how can I put this.. YES! Our costs have in some cases doubled. We try very very hard to try and absorb these costs and not pass them on to our customers behind the scenes.
What do you mean?
I mean, as I explained, it doesn’t cost much more to order 8 pallets compared to three or four. So, what we try and do is double the amount that be import at one time. There is a cost involved, but it isn’t a financial cost. It means that the time period between orders also needs to double. We also need to be very careful, not to order too much, and not to order to little. When we do, it is very annoying.
We run out of stock, because we ordered too little and underestimated demand. For example, what I would do right now for some of those Kson EQ4 mounts, or another Ke’sil. We could also end up with too much. Right now, I am sitting on too many light trackers mounts. They are fantastic, but people don’t know about them, so they are moving more slowly than I would like, and I have more than I expected at this point.
Another case in point, we have a customer whom we want to supply with a Ke’sil, which is a fantastic specialty scope. It’s been ready for a while, but we can’t get it over here just yet, as we need to order larger quantities and it just takes time to make up the quantities that we make. We are dealing with a factory here.
Why not deal with Saxon or Skywatcher in Australia and avoid imports?
We do, and Saxon produce wonderful gear, but it is a mistake to think your really avoiding import issues by having a mono-market – it’s not good in the long term, it’s like putting all your eggs in one basket. Saxon do have backorders – it’s a simple fact of life. That doesn’t mean they are in any way negligent or not doing well, it just means at times delays will happen despite the best of planning. Yes, Saxon are in Melbourne, and the goods come here to Brissy, but really, they get the Goods from Synta in China, so you have the import there. As well as that, who wants to walk into an astronomy shop (virtual or physical) and see exactly the same thing in every store? Part of the fun is discovering and enjoying different scopes and accessories and making your own astronomy experience with the gear you piece together.
By expanding the scope of our suppliers, we build some resiliency into the system, so if one is out of stock, the other can fill the need. We want a decent variety of scopes here, and Kson have immensely upped their game since we started our partnership with them and are producing some outstanding equipment, largely thanks to the design collaboration with Astro Dog. We get a lot of unique products as Kson work with us directly on a design level – we are for example, developing a simply marvellous f/12 100mm planetary scope with them, and it promises to be quite an outstanding product. When we get those over here, they will be to die for – we don’t want to be like every other retailer who has the same ho humm stock. We like our stuff to be special and lifetime keepers.
OK, that was interesting.. What do you want to say to customers who are still waiting for something on order?
Well, sorry, for starters. It is a pain to expect something and then find out it is being delayed. We have plans for the things we buy, and when we find out that they might not be happening just yet, it is disappointing. But I also want to say that it is worth it, and it’s my hope that customers understand that in a changing market, with production and supply issues, the pandemic, politics and who knows what else, we are working extremely hard to try and keep costs under control and absorb the rises, but it means we need to be a bit more patient than usual. Please also understand that suppliers tell us things, but that doesn’t always happen. They may say “ready in 10 days” and then turn around to us in 10 days with nothing, and then say “we have been very busy, and we are getting to your order this week and will finish it”. Then, at the end of that wait, the shipping agent may say, you waited two weeks longer, now I don’t have ways to get it to you immediately and it will be a week before pickup”. I just hate it, but that is the nature of the industry right now. What bothers me is that I worry that customers will think I haven’t told them the truth – I have, it’s just that I can only pass on what I am being told myself, and when that isn’t accurate, it frustrates us also. I wanted to do this interview so people have some more insight into what goes on, as once people understand why things are happening, it makes sense – you know that we are not being painful, just genuinely doing our best.
I think they will understand what’s going on Marcel, it is happening in other areas also. So, no price rises?
:laughing: I’ll do my best! I always do. I hate it when you put me on the spot. Look, it will take a little longer, but I think we got good currency exchange rates locked in and we should be able to keep the costs stable or at a slight increase. Customers who prepaid are of course locked into that lower price anyway.
Ok everyone, well that’s all from us at Astro Dog, I’m Nadine and I’ve been interviewing my husband Marcel. We wish you all well and hope you enjoyed the interview.