The price of all imported products is set to rise now that the Aussie dollar is falling to 5 year record lows. In this post we’ll explain why this is happening and what you can do to make the most of the situation.
Why do price rises occur?
We’ve been very lucky in recent years to have had a strong Australian dollar. Online shopping has been cheaper, imported goods have been more affordable, and overall it has made the cost of living that bit easier for all Australians.
In the past six months, the Australian dollar has fallen 16% against the US dollar and is currently sitting at US$0.78. With this trend showing no sign of reversing anytime soon, businesses around Australia are bracing themselves for an increase in the cost of imports. We have also just received notice from our major suppliers that price rises are imminent on our major brand equipment.
Let’s use the example of a book which costs US$10.00 to purchase from overseas.
– The US$ and AU$ are at parity, i.e. AU$1.00 = US$1.00.
– Each US$1.00 only costs us AU$1.00.
– The book would cost us AU$10.00 (10 x AU$1.00) to purchase.
– The US$ is stronger than the AU$, i.e. AU$1.00 = US$0.78.
– Now, each US$1.00 costs us AU$1.28, i.e. $1.00 ÷ $0.78.
– The book would cost us AU$12.80 (10 x AU$1.28) to purchase.
As you can see in Scenario 2, the fall of the Australian dollar by 22c makes it 28% more expensive to purchase the same item compared to when the dollar is at parity.
What effect does this have on security?
The vast majority of electronic security equipment is manufactured overseas. The benefit of overseas manufacturing means that global brands can have higher quality equipment, manufactured for cheaper prices—a win for all customers.
Major manufacturers such as Sony, Samsung, Hikvision, Panasonic, Nuuo, Paradox, and Bosch all have factories located overseas, from which we import into Australia. The vast majority of international purchases are traded in US dollars; this is why suppliers imported products from other countries will be affected by a price hike. Even for the slim number of electronic products still being manufactured in Australia, parts and materials almost always originate from overseas and thus will still be affected by the Australian dollar.
The guarantee of a reputable security installer
Some security installers sell pre-made packages with promotional pricing for an ‘out of the box’ alarm or security camera installation. With the increase in prices, some installers use cheaper quality hardware or cut corners with installation to maintain the same profit margin and rounded price point, e.g. $999. Craig Woolford, a retail analyst from Citi cites the apparel industry as an example of where businesses “…could change their product specifications to maintain their price points—ultimately lower quality.” The old phrase ‘something’s gotta give’ definitely applies in this scenario.
It’s important to search for an installer which focuses on tailoring solutions suited to each individual home or business, and avoid one which focuses on off-the-shelf packages. Whilst this does mean that pricing will fluctuate from time to time, it does mean that there is always a guaranteed quality of installation.
With all this in mind, if you’ve ever considered the installation of a security camera system, an alarm system, or an intercom system now’s the perfect opportunity to get moving to beat any impending price rise. If you’re not in a position where you’re able to have anything installed, it’s still worth keeping the above points in mind when you are ready.
At Signal Security, we’re happy to answer any queries in relation to your security or for more information on pricing. You can call us on 1300 73 83 93 or send us an enquiry via our online form.