The unreasonable cost of consumer goods
This is a plea to all those business owners who unreasonably mark up their stock by more than 50% or, as seems to be the case in most stores, more than double what the exact same product costs in the US. I know you have to make a profit in order to survive but do you not see that in applying such substantial mark-ups to your products you are actually doing yourselves out of business?
I have raised this point before here on CNS, and numerous business people have come back with various excuses about shipping, business taxes and import duties to (unconvincingly) justify their decisions to charge us, the customers, such extortionate prices for the items we purchase from them. Some businesses have even had the audacity to claim that because so many of us choose to buy abroad and import ourselves we are doing them out of business? These businesses are failing the people almost as much as our politicians currently are failing us with their bad decisions. Both are costing the public too much money and it needs to stop.
You cannot pull the wool over our eyes and try to justify mark-ups that exceed 50%. Why on earth do you think we, the public, prefer to either go abroad to do our shopping or import it ourselves? Do you not realise that it would be easier, and we would prefer to be able to buy the products for a reasonable price locally? Do you think we really want to go through the hassle of buying from abroad and waiting for our productsto be delivered or do you realise that we do this because it’s a necessity, particularly in this day and age when the cost of living in Cayman is so high comparative to our earnings? I recently made a purchase and had it imported from Hong Kong. In total, it costs me CI$78.03 including shipping and import tax. The exact same item is on sale locally for CI$140 – and that’s what influenced my decision to import my own. I’m glad I did. As you can see I made a huge saving. I recently bought Adams Plus Pyrethin Dip for my dogs from a local store for CI$21/US$25.60. The same item costs US$9 in the States. I now import that myself too – total cost to me less than C$13 including shipping and import duty. If I know someone going over to the States, even better still – I give them a shopping list to take with them!
Let’s not forget that we, the people and your prospective customers, are individuals, and therefore do not have the option to buy in bulk as businesses do and thus obtain further saving through bulk buy discount. This is the norm to you guys – so I know you are bringing in these items for much less than the cost to me. And these are not luxury items I am speaking of, just plain ole necessities that I am sick of paying unreasonable amounts for on-island.
Do you not realise that if you would just drop your mark-ups to something reasonable we wouldn’t have to go or order off-island and you would be making a heck of a lot more business, not to mention profit?
Just putting some food for thought on the table. Hope you are listening.
Walk good Cayman.
Category: Viewpoint
I know this is now and old article but it’s so important.
I want to bring into account the cost of TVs.
I bought my TV in the US and shipped it to Cayman. My cost for my 42in Plasma as US$699 and when landed the total cost was CI$894.50.The shipping cost was a bit high because of all the padding.
I saw the same TV in Price Right for CI$1,899 a few weeks later. And I say Whyyyyyyyy? This is a wholesaler bringing in tons of things daily. Why more than twice my price? Ooh wait that was on sale also. It was originally CI$1,999.
I see AL Thompson pricing some things more reasonably now and I applaud them. I saw an add for LG’s 42in for CI$699 and LG 50in for CI$899 which is a really good price. At those prices I would never consider bringing in. The 42in could have been CI$800 and I would buy it in Cayman.
Problem is this is an anomaly in Cayman not the norm.
never mind jeans, shoes, tops etc – have you ever tried shopping for a bra here?? next to impossible – can’t find them in any colour other than white or black, sizes are extremely limited …… I can buy two online which are exactly what I want, ship them here, pay duty and still save money!
and this is such a basic item..
check the labels on some items – some items are made in low income countries therefore the costs are probably even lower than buying from the US but they’re still marking them up over and above US prices…
Yes I absolutely agree on that one I have a nightmare trying to get a decent bra here. In fact I have never found (an affordable) one yet.
I have had terrible problems bra shopping. And decent heels in size 12 are too hard to come by too.
I actually bought a Sony 49" flat screen on island and it died 9 moths later, when I took in to a repair shop, apparently it contained a counterfiet card inside. According to the repair guy it happens a lot in Cayman.
It seems if you buy overseas it’s cheaper and real.
Also bought a cinema ticket online yet, you actually pay more due to a $1.00 convience charge on each ticket bought. Only online is it more expense to buy online
Did the local store honour your product’s warranty?
One place we "should" buy local is the farmer’s market. The items are fresh, well priced and in most cases raised/grown by hard working farmers across the island. Fruits and vegetables bought from the local supermarkets that are imported are full of preservatives etc injected into them so they can make it from their source of origin to the island. Funny how every imported fruit/vegetable is "in season" all year round.
Start buying local fruits and vegetables from the local farmers and you and your family will be better off.
Although it may be argued that local meat may not meet the "rigorous" inspection of some foreign countries take a look behind the scenes (Movie: Food Inc. and others) and you will see that the inspectors and the large producers are all in bed together anyways so any inspection is not truly independent. I have audited cattle feed lots back home and once had a farmer try and hide the GH needles (Growth Hormone) when I walked into the cattle weigh station. They were respectable farmers but cattle is sold by the pound so if drugging means that they will grow bigger, faster, with less feed, then that’s what happens.
Just a thought.
I agree with your sentiments. As a vegetarian, I would love the opportunity to buy local all the time. But as another lady has commented about this elsewhere on CNS – the farmers market is a heck of a long way away for some of us who rely on public transport, and even then its a long walk from the bus stop up to the market itself, which is not easy for elderly/handicapped folks trying to carry heavy bags full of vegetables. Perhaps thought could be given to holding a farmers market in a more central location that everyone could access easily? I would certainly be a regular there if we did.
This is another story that never made it past my former employer in Cayman. Probably because most of the major offenders were also advertisers.
The problem is that this goes far deeper than just the price. You have goods (particularly electrical and electronics) being sold by retailers who neither offer realistic warranties and aftersales service or honour the manufacturer’s worldwide warranties.
We uncovered electrical goods on sale in Cayman that didn’t even meet basic safety standards and some that were clearly marked as not for sale in the USA. All very easy to do with no Cayman equivalent of either UK’s trading standards department or the USA’s CPSC.
The previous government talked about establishing consumer rights but the bottom line is that is was just that, "talk."
Every year in the UK and the USA hundreds (thousands?) of tons of unsafe products are impounded and destroyed before they get onto the market – I wonder how many similar products are currently on sale in the Cayman IIslands?
Aha you are leading to my next topic… too many times I buy electrical goods which would usually carry a maufacturers warranty of 12 months anywhere else but in Cayman… one month – what’s that all about? And as for safety standards… well perhaps that explains the one month warranty – I often wonder if these retailers are buying factory rejects or something! As for the Consumer Protection idea that was floating around – Ezzard Miller brought that motion. I really hope they make it similar to Trading Standards and Consumer Protection in the UK… if this ever becomes anything other than the usual ‘hot air’ from our politicians that is!
I too find the prices in Cayman outrageous & avoid buying some things locally as a result.
However just to be fair, local businesses don’t just have the cost of buying goods, shipping, duty, & profit to take in to account in their pricing. They also have to account for their own expenses such as extortionate rent, insurance costs, permit fees/wages/insurance/pension for staff, electricity & other business expenses, & all the costs of setting up & maintaining their business using products & services that they have to buy locally & are ripped off with too.
Of course, high prices are mainly due to greedy people ripping us off.
You missed my favorite business expense. Credit Card fees. These extortionate fees are now under scrutiny worldwide.
The concept of a credit card fee, the bank effectively lending the retailer the money until the card holder repays the bank is one thing. But with debit card fees of close to 5%, and the money removed from the cardholders account immediately, the result is criminal!
All the expenses you outlined along with declining population and revenue put most retailers lucky to net 10%. Unless you pay by credit card and the shopkeepers equal partner takes half of that.
Yeah the card companies are a rip off.
They get it from the business and the customer. They charge the customer outlandish interest rates as high at 18% to 22% per annum and then charge the business for accepting the service also. To me that’s double dipping.
Remember when C&W use to charge on cell phones the people making the call and the person receiving the call? This is the same thing.
This seems to be the case in ALL local businesses where gouging the customer is the norm rather than the exception. Sadly the radio advertisements to "Buy Local" have done very little to sway my opinion, and instead have furthered my resolve to only buy the "necessities" here.
As an example, I needed a memory card for my camera and while at work did some quick research for pricing. I found the card for sale for $5 US from a reputable web site, and $15 from a store in the US. Not wanting to wait for it to be shipped to me, I decided to visit a local electronics retailer on my way home where I found the exact card on sale for… $120 CI. Yes One Hundred and Twenty Cayman Dollars for a card that I could get for $5 in the US. When I asked in disbelief if the price was correct I was told that yes indeed it was. I prompted for a further explanation, citing that I had seen it for only $5 online, and was told that the price was what it was, take it or leave it. I left it.
I could cite hundreds of occasions like this, as I’m sure we all could, but the local retailers just don’t seem to get it. It is getting to the point where I have refused to shop in certain retailers not just for their horrible price gouging but also for their abysmal customer service. I would gladly frequent a business that had reasonable pricing on ALL items in the store, not just on a few "loss leaders" to bring in the traffic. Until then, I will ship in everything I can and the local businesses will not be getting my business at all.
Andto those who say that the prices are what they are since it is expensive to do business in Cayman I call foul. Can anyone name ANY retail business in the USA, Canada, or UK where items are marked up 150% or more over actual cost? Stores survive on a modest markup of items, and still manage to treat their customers with respect. Something which the money hungry store owners here just don’t get… treat your customers well, offer reasonable prices and convenience and the sales will come. Try to gouge us and we wont be coming back.
Someone earlier wrote about products that are not reduced as their expiry date nears. This is a topic that really irks me. There is a supermarket in Cayman and I know that if I name it CNS will not print it, so let’s call it XXXXX (note 5 Xs, not 7). Their ‘Italian Bread’ is wonderful – when it is fresh. On the day that it is made it is a joy to eat. Don’t eat it buttered or with cheese, just revel in the glory of the taste of the fresh bread. Eat it accompanied by fresh, ice cold milk.
If loaves were baked this morning, May 27th, the sticker on the wrapping will read, "Sell by May 31st". On May 17th I pointed out to the bakery manager that the bread on his shelves had been there for three days. "So?" he said. "So it’s not fresh," I suggested. He picked up a loaf and studied the label. "It’s all right until tomorrow," was his response.
"What’s to stop you putting, "Sell by October 12th on the batch you bake tomorrow," I asked him. He didn’t seem to understand my point.
Back in the UK in the 80s, Mothers Pride was baked five days a week and a different coloured plastic tag was attached according to the day it was baked. As I approached the bread shelf I would be saying, "BOPGY" over and over in my head: Blue – Monday, Orange – Tuesday, Purple – Wednesday, Green – Thursday and Yellow – Friday.
I never would buy a loaf with an orange tag on a Wednesday. They stopped providing that service because of people like me and because the shopkeepers complained but they, the shopkeepers, should have been more careful with their orders.
The next time you spend the night at the Ritz and you fancy a nice piece of bread the following morning, head south and stop at the first supermarket you come to. I can’t remember its name now but go and look at the bread. If the sell by date is less than four days in the future, it is already stale.
Point that out to the manager and I hope you get more sense from him than I did.
The price you pay for living in an ISLAND paradise. You are not in Kansas anymore. Deal with it.
Buying local is stupid. I always laughed when the Chamber of Commerce crew pushed their "Buy Cayman" campaigns. They would explain the virtues of shopping locally on CITN or whatever while wearing clothes that undoubtedly bought overseas. Hypocrites.
Save up for one or two Miami shopping sprees per year and you will save tons of money.
Chamber of Commerce are hypocrits. They will only "But Cayman" if you are a member of the Chamber, otherwise, they source off island. XXXX
1) Offering Sunday opening would increase the opportunity to reduce prices by have more opportunties to achieve sales to meet fixed overheads.
2) Allowing foreign business to open their own stores here would all massive reductions in consumer prices by allowing these businesses to take advantage of economies of scale on purchasing power, fixed costs and stock issues.
But Cayman wants to keep shut on Sundays and maintain a lack of competition in favour of protectionist stances for local retail oligopolies (see sports stores for a good example). So there is no point complaining about prices of goods if you are still in favour of 1) and 2).
I wish we could separate our church and state here then we can see Cayman grow some.
We need Sunday trading. Nothing wrong with a grocery store opening. You already let bars open so why not groceries.
Foreign stores already open here they just need a Caymanian partner unless you are "special".
Any foreign stores reading this I’m available. Sorry had to drop that in there.
If money runs everything, business entities and stores are going to do whatever they can to survive. And if the heads become greedy, they will not think about the consumers nor their own employees
#1 People need to start becoming self-sufficient like planting their own food and inventing their own things in order to survive. More creativity and wisdom is needed.
#2 People especially owners and business managers have forgotten that if you don’t take care of the goose, your not going to get your golden eggs – money is not everything
What gets me are the groceries that they try to sell for the full price up to a day or two before they expire! It is just rude! Nobody can afford to throw money out like that, and everyone feels cheated! I had this discussion with various managers at various supermarkets. They know Saturdays are their biggest shopping days. Why not blow out the inventory then and mark down the stuff that you know expires the following week? Why let stuff go to waste and risk having to dump it rather than selling it half priced? I don’t get it, but I urge everyone to check their expiration dates and not just on dairy, but also on crackers, cereal, pasta etc etc. You would be shocked to see how many stale items they are trying to sell!
Boy tell me about it! I frequently get into heated arguments at a certain prominent Supermarket on a Saturday about products about to expire that day or Sunday, yet they won’t offer any reduction or discount – so countless items remain on the shelf unsold, when a simple reduction a few days before the sell by date would probably see them all sold.
Maybe its got to do with the ability to get cargo on island and the distribution centers. Every time I go to the store for specific items, they aren’t in stock.
I actually saw the product in a box on the show room floor, with a price tag on it. They wouldn’t sell it to me cause it wasn’t in the Point of Sale System yet. So I walked out and got it off the internet.
Did you ever stop to consider that maybe these chains are buying "close to expired" stock from their suppliers in the US at the lowest price possible?
Retail just sucks in Cayman!! Often I find myself aching for some Retail Therapy and literally unable to buy anything. Stores never have sales here, so it’s the same old crap in there day after day and when they do get in something cool and it sells out right away they seem to never reorder. I agree too that stores need to consider opening later. We also really need more clothing retailers, right now there is no choice. Everything is either low quality or high end – nothing middle of the road. I mean has anyone found a descent place to find blue jeans (which aren’t bedazzled) and good t-shirts? If so please share!!
Here is my wish list
1. longer store hours
2. more sales (move that stock!)
3. more clothing stores (we don’t need anymore candle shops, massage parlours or manicure places!)
4. better prices!!
5. better selection
Until I will keep my retail therapy sessions limited to online shopping.
Best place to get jeans and shirts cheap is Jamaica. Plenty of choice and bargain basement prices. Same with shoes – Jamaica has some wonderful shopping on offer!
Bet those Items are HOT!!!
Sorry for the late reply, if you have any ideas on the type of t shirt you would like to see in the stores on Cayman please give me contact info and I will supply you with what you want. Guaranteed!!
While we have many who agree about the cost,shipping and the dutiespaid for an item. No one has mentioned that those profits made then exchanged from CI to US and another 20-25% is gained. So with this gain andthe huge markup they made they get to shop again at wholesale rates. We also did all of our shopping and shipping from the states for over 13 years. I have seen many Caymanians do this and even some are business owners themselves taking advantage of the deals the USA has to offer. Just watch at the ticket counter in the states to see how much baggage is checked, even at the extra cost. Not wanting to open up another topic here but we all know who is going to pay duties upon returning home and who will be charged for every little item. Do not forget that the Cayman Airline employees that fly for next to nothing and their shopping trips. How I would love to fly to and from for little to nothing and shop. We all know that they are not paying for those extra suitcase and big boxes too! We are now back living in the USA. I real miss the island life and friends. But I must tell you that shopping is fun now. I love that my USA money is USA money!! Sales and Clearance Racks are a REAL SALE and not just some 10% off bargain. Food shopping is a real treat. A gallon of milk with a long sell before date. Not with next week not the next day or even already passed. All this for under $2.00 US. I know I pay taxes but high would be 7% but we pay no tax on food items. When we lived on the island I would take in to consideration that some of the food items might go bad before they are sold but come on when is the last time you would see that happen. Also if the shipment is delayed and the items goes bad the shipping company must pay for that. Besides but the item on clearance and still make a profit before the date expires! Now with all of that been said do you really think that any of your big time business owners are suffering. Ask/answer these questions: where do most of your big business owners live or have a vacation home and where do you think some of them have invested money and/or have it banked. If you answered the USA you are right. I too would go where my money would bring me more than 20% gain. That is why they have done so well and you are doing so poorly
The biggest insult for me is not only the high mark-up, but the fact that the majority of businesses close their doors by 5:00 o’clock! A lot of us have to work for a living and don’t get out of office until after 5:00 and a lunch hour is not always available to everyone or enough time to run errands. Businesses should be open at least until 6:00 if not 7:00. If you have to, don’t open your shop until 10:00/11:00 in the morning during the week, but keep stores open longer.
I agree with this poster. I just spent a large part of my lunch hour driving around town trying to find a parking spot because I needed to pick something up at a downtown store that closes at 5:00. The only other option is to do all of our shopping on Saturday, and we all know there are a lot of other things that take up time on Saturdays. And with no Sunday shopping yet, it has all become a chore to shop on-Island.
The mark up is bad enough, but what about the lenth of time you havt to wait getting a product delievered! I was dumbfounded the other day when I looked for some appliances which I wanted to purchase on Island (nothing fancy, standard stuff). Well, apparently the stores don’t even have ONE of the more popular appliances in stock and have to SPECIAL order with a lead time of 6-8 WEEKS! If your appliance breaks down and you want to replace it, who can wait 6-8 weeks? By then you find out that either the items arrived damaged and had to be re-ordered or that there was a mix up with the order and you have to wait another 4 weeks. I can’t believe that in this day and age and with such a close proximity to the US it takes so long for something to be shipped. If you offer products for sale, I would expect that you have at least one of each item in stock and then re-order immediately once that item has been sold. I can understand if it is something very unusual, but come on! How can you expect people to support something like this???
I assume the writer has never shipped anything from the States by ship. US suppliers do not always hold the items you in stock and it takes 5- 10 days to be shipped to them and then a day to be delivered to the dock and await the next ship, which is once a week for small items. Pick up papers from shippers, pay customs and port fees then pick up item from port, check it is not damaged and deliver to customer. I import over a million dollars worth of goods per year and yes it can take up to 16 weeks for certain kitchen cabinets and brushed nickel plumbing fixtures. The local shops cannot do anything about the time it takes to get materials and equipment here. If you want to find out why not import something yourself.
I don’t think it is too much to ask for a store to keep a certain stock of the basic items they sell. Kitchen cabinets and brushed nickel plumbing are not really time crucial items (unless you are building your house and want to be able to move in, but we all know the house building process is always long and painful). However, when a wash machine or a fridge breaks down, one should be able to replace it without having to wait almost 3 months or more!
And shipping by ship, despute being longer, is of course, substantially cheaper than UPS/Fedex/DHL or other fast courier services so even more savings to the retailer which I bet don’t get passed on to the consumers.
What I would love to see and many others, is a list of the most affordable goods and services broken down, so I will know where to shop.
THESE COMMENTS HERE IS NOT HELPING ME ONE BIT!
Sorry :o)
You have to do your research. In the past year I bought a Blackberry from the US and after shipping and duty it ended up costing close to CI$300. I could have bought it from LIME for CI$300. I had to replace my washer. I priced it at CI$1100 from a couple of sources here. Just the washer. I ordered a comparable washer AND dryer from HD in Tampa on sale for US$1100 (and free shipping to Thompson in Tampa). After shipping and duty I paid about CI$1500 for a washer and dryer opposed to a washer alone for CI$1100. It took about two weeks but worth it in my circumstance. So, we could make a list but there are many variables to take into account. Shop carefully especially around big sale days in the US.
Your cellphone price situation is actually kind of wierd to me because I but a lot of cellphones because I do Ebay a lot and generally if the price locally is about say CI$300 I make a savings over local prices of CI$125 to CI$200. Over $500 it’s CI$200 to CI$250.
To be honest to my memory I have never loss on a phone nor even come close to breaking even. The least I can remember making as profit is CI$65 and that was because I wanted it fast and couriered it in.
Yeah, I found it wierd too. Goes to show that I should not automatically reach for the laptop and check local prices too when I need to make a purchase.
CNS, can you sort out the order of postings please?
I start at the top, realise that people are replying to comments further down, then find those comments, then jump to the middle, or another page, then find I have to go back and forth to string the conversation together. Sometimes I just end up giving up.
Not knocking what you do, love the site, but surely you can simplify the order of posts for a simpleton like myself?
CNS: The comments are published with the most recent at the top. Because the conversations were jumping around, as you describe, we implemented a "reply" button, so a response to a particular comment is indented and a response to that is indented again. However, I can’t make people use this function.
Start at the bottom.
If you are here to save as much money as possible before going back to civilization the ridiculous price of stuff actually works in your favour since you buy less.
"civilization" !???
Aka "the real world".
Dred,
so you buy a shirt for $17 USD…shipping probably costs $10…duties are cost + shipping + duty which gives you about 34.50…and you wonder why the store here is charging $35?
and the Crib…you say you buy it for around $100 in the states…ok so you buy it for the equivalent of $85 KYD…ship it (probably $50 to miami and $50 to Cayman)…and pay duties…now we’re up to $225…so if its sold for $300 the person made $75 (a 35% markup from landed cost)…imagine how many cribs you’d need to sell per month to buy the product back and pay rent…the number for a small store is probably is probably around 40-50 cribs…sorry but these stores aren’t making as much as you think if you really rationalize what they have to do to survive…the volume doesn’t exist here to pass along the economic efficiencies to consumers that exist in the US or elsewhere…if people use their brains and factor in the cost of going off island (ticket, car, hotel) they would realize that even paying the high markup is cheaper in the larger scope of things
Bull. You are WAY off on shipping costs! And yes, your math adds up on your shirt example with that shipping rate, but only for an individual importing that one item by air and paying all warehouse fees and package taxes for one shirt that weighs less than a pound when retail stores here import and pay that tax for each 100lbs and ship things by sea.
I ship things here all the time and unless you are paying for your stuff to be sent individually and overnight and demand that it be put in the first class section of the airplane there’s no way it’s that high. Retailers bring things in large containers in bulk by sea, and they pay much less for the item. Most retailers in Cayman have unreasonable mark-ups. Plain and simple.
No idiot would buy a shirt like that or the crib. We fly to MIami on a buying spree like we always do and buy up all sorts of stuff. He’s just playing the fool and he does it so well it makes me wonder if its an act or real.
My shirts would never deign to fly economy class…
Let’s not forget insurance and tailgating fees!
Which store do you own which is overpriced goods by 300%?
No one shops the way you say.
Basically if I go to the US and spend CI$2,000 for everything that’s Airline Tickets, Rentacar, the items and duty. The same items if bought here would cost about CI$3,000 to CI$4,000 easy.
You can say what you want but Caymanians have been doing this for years for the same reason. When we fly we don’t buy a shirt and comeback. We reload our wardrobe, we buy up our gadgets, new TV and all the doodads you can think of. Some of us skim CIG on duty and I can’t lie I have done it once or twice or three times. Fact is the stores in Cayman rob us on a daily basis. If I buy a shirt in the US for US$17 the local store would have gotten it for US$15 or less and they don’t buy one item they buy by the container so they don’t take the hit like we do. Their shipping cost becomes almost non-existent on something like that. I dare say 5% or less.
So you can listen to this idiot talk but all he/she is doing is trying to justify why they kill us in the name of lining thier pockets to send their kids to boarding schools because their kids dislike them because they spend too much time counting their money instead of with their kids.
YOU are the reason we are where we are today. YOU create artificial inflation. YOU create the high cost of living. YOU are the reason why tourist stop coming here because YOU are too greedy and stupid at business. In the end it will be YOU have to close your stores because no one shops with YOU any longer.
From the bars who sell sodas to tourist at CI$2.50 a glass while cost are actually less than CI$0.50 to the Gas Stations who rise gas quickly when the US goes up but slowly when they go down. And let’s not forget the CUC who’s quickly to raise our bills also. We have been raped retail wise for years from the monopolies of C&W to CUC to everyone in between.
We need to take a good long look in the mirror because we soon won’t be able to live here. The cost of land now is thru the roof and pay is not rising fast enough to meet the increased cost.
My ten year old worked hard to earn himself some money and together with birthday gift certificates from friends, he went into a local sport supply store and bought himself a ripstik. When my neighbour saw it the next day, she apologized and said she meant to tell us that the same item only cost US$45 in the States, She had recently bought three for her kids. My son paid CI$185 for his.
Needless to say, that is one of many establishments we no longer frequent.
Screw their greed. Order online and get it shipped.
I personally find that the baby stores on island are some of the worst offenders. There have been occasions where I’ve seen items being sold for triple the price that it would cost in the US!
As an example, I recently purchased a small baby swing on a trip to Florida. It cost me US$50. Upon returning to Cayman I found the exact same swing for sale in a well-known baby store for CI$90 and in another less-known store for CI$150!! How can such an obscene mark-up be justified?
I recently made two trips off island to buy baby items and managed to get everything I needed including car seat, stroller, and crib for under US$800. If purchased on island these items would have easily added up to thousands of dollars! Even when you factor in the cost of flights, hotel, and car rental (which we got a sweet deal in US$ through Expedia) the savings are still significant – plus you get a little holiday break off the rock!
When you realise how extortionate the prices on island can be, one can’t help but look forward to the trip overseas to find a fair deal.
Baby stuff is a rip off. Buy it all online or go to Miami for the weekend and save a fortune.
Buy local? No way.
The sad part my friends is that this falls on deft ears. They are bang for buck thinkers not sell in bulk thinkers and they’ll always have someone or something to blame.
I know exactly what you mean. I could go down a list of things I have bought overseas and made a ton of savings on, here a short list:
Direct TV Receivers – Sold in the US for USD 168 sold in Cayman for CI$350+
Cellphones sell in the US for US$259 and in Cayman for CI$600.
Car parts sometimes at 1/3rd the local price.
It’s rediculous and has always been rediculous and you always hear the screams of business for us to buy local. Why? Why should I buy my shirts in Cayman at CI$35 ea when I get same or better quality in the US for US$17 or less.
Let me go to explain something else to the viewers. These prices I am quoting are RETAIL prices not the prices the stores pay but my price off the street. Imagine what they get them for.
There is only a handful of times where I have bought something local that I could say that the savings would not have been significant % wise.
I feel 30% MU is reasonable to cover overheads and give you still something in your pocket at the end of the day. Besides if you are at a reasonable rate you should get more sales which means you will probably make that amount back anyhow.
Right now I am looking into cribs here in Cayman and the price sits between CI$260 and CI$300 but it’s not hards to find them in the US for US$115 and thereabouts. How can you rationalise CI$94 going to CI$300. That’s an amazing markup.
well said, everybody accepts the fact that items on cayman should cost around 30% more than the states… but i still want a retailer to explain why the mark-up in most cases is around 100%???
in the mean time i look forward to my next trip to the states / europe….
One other point. If Cayman had the volume of people that Hong Kong does retail stores could sell consumer items at prices you are used to seeing on the internet. News flash genious Hong Kong has 7.9 million people.
That’s 150 times more people. Go do the math.
Idiot. The internet is not limited to Hong Kong but instead is worldwide, meaning people from most places in the world can shop online easily.
If the local vendors bought their stock online, shipped it in, paid duty and made a fair profit, they could still sell 30-50% cheaper than they do now.
Take an ipod. I was buying a couple for xmas presents and the cheapest I could buy for locally was $235 CI each. Compare that to the online cost of $150 US shipped, or $152.5 CI including duty. Why would I give the middleman an extra $82.50 CI per ipod?
When these greedy sods are charging ridiculous prices I will continue to shop overseas. I’d happily pay a bit extra but I’m not letting the local retailers tear me a new one.
The only reason the product was so cheap in Hong Kong was because it was manufactured there. So rather than buy the same product from a store in the states that had shipped it from Hong Kong and already paid US taxes and applied their own mark-up, I had the sense to cut out the middle man and go directly to the country of manufacture, thus making considerable further savings on the cost in the US.
I see the same old replies coming in from businesses… nothing more than expected – seems I’ve touched a sensitive spot?
C’mon now be reasonable and start being more commercially focused. Its an indisputble fact that almost all business operating in Cayman are extorting the public by taking advantage of the fact that we’re stuck in the middle of the ocean with not too many retail choices so its the perfect opportunity to monopolise, hike up prices and try to scrape in more profit than you would if you were in, say the States or Hong Kong, where as you state, there are many more people, but more to the point, there are many more competitors willing to offer goods at affordable prices which in turns, forces you to do the same. Its the same with the TV, internet, water, electric, and telecommunications services here. Its an absolute fact that if you had more competitors selling the same product prices would have to come down. I’ve seen this myself in Barbados when they opened up the GSM market to other mobile phone operators – prices dropped substantially as new providers came in, and drastically better deals were on offer such as top of the range mobile phones free with a 12 month contract, just as many other countries do (but not Cayman of course). The fact of the matter is, its not just the number of consumers you have in a country that drives prices: its the number of competitors and the availability and wider selection of products available. You see I might not have a business here, but I have managed them in the past so I am at least a bit familiar with the operational side. Also, as I do occasionally work with Caymanian business operators, I am more than familiar with Trade & Business Licence requirements, shipping, insurance, and other costs associated with running business here. I am still quite comfortable saying most if not all business are operating with unreasonable expectations/profit margins and thus will never have the luxury of a large and expanding customer base. As I said at the outset and others have pointed out – drop your mark-ups and generate more business, or your consumers (who currently have no option but to seek savings) will go elsewhere.
Interestingly enough I have just spoken to the person who orders for the store here in Cayman who charge CI$140 for the product I brought in from Hong Kong for CI$78 including shipping and taxes/duties. The person has informed me that the store in question not only gets a 10% discount on bulk orders, but also free shipping – he negotiated it for them as their buying agent and as he is a good and trust friend of mine – I have no reason to doubt him. I have been discussing my article here with others I know who run business here. They too did not like my stance initially but some are starting to see my reasoning. On asking them about the discounts they receive, they have given me different trade discounts ranging from 10-25%. Almost all get free shipping within the states and only have to pay shipping from Miami to Cayman. My research is proving to be very revealing indeed!
I have a friend who set up their own business, and charging reasonable mark-ups to directly compete against the stores here because he was fed up of their prices and fed up of having to go Miami or wait for delivery of imported goods. His prices are roughly 48% higher than the actual cost in the US. And he’s already doing very well out of this despite only being in operation for three months. He doesn’t even own a store – word of mouth recommendations have led to people coming directly to him as opposed to the stores where they used to shop. Being in business, and doing very well, he agreed with the writer of this viewpoint when I discussed this with him. He says even though his profit margin is small, his customer base has swelled significantly in only 3 months and he is operating at a profit he is comfortable with, and feels that within a year, he should be in a position to open his own store.
Take my advice – tell your friend to keep the business the way it is now. That will keep the overheads down and he/she will be able to continue selling at reasonable prices and still making a small profit. Is your friend paying a Trade & Business Licence fee? Remember we need to render unto Caesar what is Caesar’s (the Bible tells us that). I know I digress slightly but the Bible does make it clear that the Government must get its money that’s whay I cannot understand how this God-fearing nation of Christians are so resistant to taxes and paying Government fees.
Anyway, back to your friend – until he/she experiences the expenses of renting a commercial property and paying all the overheads that accompany that; together with paying staff and don’t forget that security guards are almost compulsory – well let’sjust say it would be difficult for this person to understand that businesses in Cayman cannot survive on 30%.
The Trade and Business Licence system addsmassively to the costs of consumer goods in Cayman but fettering competition to existing businesses and protecting monopolies or oligopolies.
In recent months on CNS posters have bemoaned the status grants for openingup Caymanian businesses to competition from new businesses started by the recipients of the grants.
So Cayman has a choice – deter competition through protectionsim or reduce the cost of living. Protectionism hurts the ordinary Caymanian the most and benefits the influential capital owning classes in the islands but rose tinted nationalism has stopped this fact being accepted by many.
Thankfully one does not have to be a Caymanian business to compete with businesses in Cayman. Online shopping and trips to the States (or elsewhere) certainly prove that regardless of the ownership behind a business here, or how many businesses in competition (well, in Cayman’s case, collusion), we thankfully don’t ever have to buy inflated local prices.
If I understand the argument from the pro-business side here. They are not making as much profit as we think because most of the profit has to go to shipping agents, landlords, utilities companies and possibly other merchants who overcharge. So where does the buck stop then? I mean literally. The logical conclusion would be that someone, somewhere is getting fat by artificially inflating profit margins. A logical place to look would seem to me to be who is doing the loudest and most organised squeaking against possible taxation.
Is this really the God-fearing Christians? Were they the ones who commissioned the neat cut-and-paste job that was the Teather report– knowing that CIG already had a similar masterpiece coming from Reagan’s master of purse? I’d never really thought of Cayman Finance as religious before, or for that matter: the Chamber of Commerce, the "Big Four", Michael Ryan, Dart, or any of the rest of the letter-signing crowd and their cronies– who correct me if I’m wrong are all implicated one way or another in the present discussion.
A question for another day is if the money isn’t going to Caesar then where is it going? I believe in "civilisation" as some of my faves on this site like to call it, it is not only the public sector that is required to be transparent.
Okay, let’s take your 100% claim and see how it works out using the example of a previous commentor regarding relative retail pricing for a shirt. I’ll even pretend a retailer is shipping it individually (which of course they aren’t) to drive up the total cost to the retailer. Let’s say a shirt costs the retailer $5-7 to purchase wholesale. Tack on $10 (air)shipping and duty. $15-17 USD for total cost including shipping and duty, mark that up 100% and you’re $30-35 USD, or $25.2-29.4 CI. So why the extra $5-10 CI after 100% (which, you’ll notice isn’t from initial purchase cost, but rather total cost)?
So now let’s buy/ship it in bulk (what a typical business would be doing). $5 a shirt, maybe $2 per shirt shipping (now by sea) and another $1-2 for duty. $8-9 USD cost to the business per shirt. Mark it up 100% to $16-18 USD retail price, or $13.44-15.12 CI. See why people buy online and pay to have it shipped here? When even 300% markup of initial cost is less than the retail we face in our stores. (As a disclaimer, this isn’t going to be true for all items, particularly designer branded ones.)
Now let’s have the individual buy it directly from the states at US retail. $17 for the shirt, $10 for shipping and $4 for duty = $31 USD or $26 CI. I can save $9 a shirt, or 26% if I skip the store. 26% and we’re not even talking about discounted internet prices. That’s for me, and many others, enough reason alone to skip buying local. Now if I buy from a trip to Miami and lose the shipping price, or if I buy discounted online for lower than US retail, I save even more. The amount I save is well beyond my desire to have the product immediately from buying it here.
If businesses lower their markups, to the point their adjusted marginal revenue is equal to their marginal costs, they would be making more overall profit because the differences in price to the consumer will become low enough that people will choose to pay a little more here than bother with buying and shipping here themselves. The overall effect would be that businesses would actually capture more overall profit, despite making less average profit per product sold by shifting and changing the slope of their marginal revenue curve.
The real problem is that most well-established businesses here are dealing with an 80’s-90’s mentality of relying upon their relatively monopolistic power in supplying us with goods. They made more money when we had little choice because internet shopping was non-existant/new and airfare was more expensive. Times have changed and they haven’t, which is unfortunate for them because they could be making a lot more money if their business models caught up to the rest of us.
This is the height of BS.
You are building your business for small sales volume but high price tags instead of higher sales volume with lower prices that is all. If your price was lower you would attract more sales and make back the difference maybe more in volume.
You go into business and price your products based on an already overpriced market not because of your actual cost but because the market already has your product priced.
With a proper advertising campaign and lower prices you will not only survive but flourish.
I do not agree with the 100% MU. That is stupid at best.
And yes I fully understand that Cayman does not have a million people but we have sufficient for a significant number of businesses selling the same basic products.
In business this is what we term artificial inflation. You drive prices up and drive away customers therefore making the prices legitimate.
Some of the worst offenders are restaurants, especially those on "the strip" (WBR). I know some meats, e.g. lamb, are not cheap, but I have seen on some menus vegetarian options for $15 – 20 CI.
Yup. I agree. Most restaurants charge similar prices for pure vegetable meals as they do for meals accompanied by meat or fish… yet the actual costs of preparing vegetarian meals is drastically cheaper.
Yes, but I see great force in overcharging the tree-hugging hippies to subsidise the costs for those of us who recognise that we are omnivores – our teeth weren’t designed for vegetables alone.
Ah… wow… that is not even close to the point of the post. I am not a vegetarian, but do try to cut down on my meat consumption simply because it is good for my body. The point is: vegetable curry (or pasta primavera, etc) shouldn’t cost $15+ CI.
Lets not even get into the price of drinks. When many bars on the strip charge the same for virgin cocktails as they do for those full of booze. XXX
Cost of goods per plate is pretty low in either case – usually you arepaying for labour and rent! Don’t forget to tip your server!
Let’s hope business owners read and take your advise. I’m more than happy to pay a little more to have the convenience of having on item on island and the immediate gratification of taking it home with me AND it is insulting when some businesses gouge their customers. I happily frequent the businesses where they provide good customer service and reasonable prices that have good value and hope others in Cayman will do the same as these business owners need the volume to be able to stay in business!
Well said. I buy Cosequin for my cat from Amazon as the mark-up in my vet’s office is like 500% over the purchase price in the US.