The Zimbabwe business model

10 04 2012

Zimbabwean retailers seem to have a curious business model. It often centres around marking up products to the highest possible price that the consumer will accept and when the consumer doesn’t buy the product it is simply left on the shelf in the hope that they might change their mind. This is most noticeable in the luxury goods sector.

On the way back from the bank to the carpark this morning I went past a local photographic shop. I’d seen a rather nice tripod there that I thought would do rather well for mounting my binoculars for a bit of steady stargazing. I’d made a mount for this purpose this long weekend and it had worked better than I thought on a monopod so I was keen to try it out on a tripod. Everything about the tripod seemed suitable for the purpose and it was a Slik 400 which is a reliable brand but the price at $464 seemed high even by Zimbabwean standards. A bit of internet research showed the same model at 72 pounds from Amazon.uk which at today’s exchange rate equilibrates to just $100! Now I don’t for a moment expect to buy that sort of item for anything like the same price it goes for in the UK, but trying to sell it at that price is ridiculous. I have also just checked the South African price and that is less than half the Zimbabwean price and South Africa is a very bad place to buy photographic equipment (it is usually around double of the USA price).

I bought my Nikon 10×50 binoculars from the same shop at least a year ago and they had another pair of very nice Nikon 8×40 roof prism binoculars which I briefly contemplated but could not justify the $760 price tag. I saw today that they are still for sale at the same price so maybe cash flow is not an issue and they are relying on the core business of photo printing and photo copying. Maybe I am sensitive to this because my business relies on very high volumes of sales (our pricing unit is in $/1000 seedlings) at a relatively low markup but I cannot for the life of me think why they don’t just drop the price and at least sell SOME of their higher value stock!  A curious business model indeed.