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Can Harvey Norman Buy Branded Goods, Cheaper Than Amazon Some Doubt It

Harvey Norman boss Gerry Harvey believes Amazon are mad to launch into the Australian market “just weeks before” the peak Christmas, New Year period.

He has dismissed claims that Amazon would “eat our lunch”, claiming that Harvey Norman would leverage the strengths of its bricks and mortar showrooms and online stores and match or beat Amazon on price to remain No. 1 in its categories.

What he failed to tell shareholders yesterday was whether he could buy products cheaper than Amazon with some major brands telling ChannelNews that their local subsidiary was paying more for one of their own products in Australia because of local specification needs than what Amazon were paying.

Graeme Reardon the CEO of Network Company D-Link said that on products that had no local customisation due to Government regulation Amazon were able to buy cheaper because of their sheer volume when ordering stock.

“If it gets rough we have a war chest much greater than any of our competitors in this space and we will be the last man standing.” claims Gerry Harvey.

Mr Harvey also said Amazon would be “idiots” to launch new retail products and services before Christmas, suggesting the e-commerce giant was running out of time given that most online retailers shut up shop by mid-December because shoppers were worried about getting deliveries on time.

Some analysts are tipping that Amazon will be able to buy core range consumer electronics and appliance products up to 30% cheaper than what Harvey Norman is able to buy the same products for.

Harvey Norman executives who have been calling their suppliers “daily” to ascertain their involvement with Amazon claim that more than 50% of the stock they range “will not be available” on Amazon.

ChannelNews understands that a great deal of this stock is slow selling house brand products.

Cameron Trainor the CEO of JB Hi Fi admits that discussions have taken place with suppliers regarding “pricing parity”

At yesterday Annual General Meeting Chairman Gerry Harvey mounted a spirited defence of the retailer’s performance and outlaid plans to tackle Amazon head on.

“It’s not a simple case of Amazon coming in and eating our lunch – we’ll be the most formidable competitor they’ve ever seen,” Mr Harvey told shareholders.

Harvey Norman shares rose 3.8 per cent to $3.91.

“They should be opening in February or March,” Mr Harvey said. “To get out there and open now shows how dumb they are – they will make so many mistakes if they do this.

“It makes no sense, it’s just crazy. Every time they do something wrong guess who will do something about it – they are our No. 1 target,” he said, adding that many of Harvey Norman’s suppliers would not supply Amazon at all.

 

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