/ 15 March 2006

Tracking the markup

Global positioning systems units in South Africa are retailing for twice as much as they sell for in the United States, bringing into question the markup on the latest technologies that are imported into South Africa. A Garmin E-trex Yellow GPS unit retails in the US for about $100 (R617).

Global positioning systems (GPS) units in South Africa are retailing for twice as much as they sell for in the United States, bringing into question the markup on the latest technologies that are imported into South Africa.

A Garmin E-trex Yellow GPS unit retails in the US for about $100 (R617), while the same unit, which is imported by the sole South African distributor Avnic Trading, retails for between R1 200 and R1 300.

The price difference brings into question Garmin’s mission statement of providing affordable technology to the consumer.

GPS units use satellite signals to track information such as location, distance to other locations, expected time of arrival at a destination, direction of travel, altitude and speed.

They are used for professional purposes such as geology, cartography and sinking boreholes, while their recreational uses include hiking, camping, fishing and geocaching, a hide-and-seek adventure sport that utilises GPS units (see “Digital treasure hunting”).

A buyer for a nationwide retailer of GPS units, who asked not to be named, said that the biggest market in South Africa was for a vehicle-mounted unit where drivers use them for navigation in the cities. “You supply a street address and the route-finding functionality tells you how to get there,” said the buyer.

The buyer said that there was no import duty on GPS units. The reason for the price discrepancy is because in the US Garmin sold straight to retailers, while in South Africa the units are sold through a go-between company that adds its own markup.

Another buyer for a nationwide retailer said that Avnic Trading has a recommended selling price. Retailers have to stick to these prices. “You’ll notice that all retailers are selling at the same price,” he said.

Quintus van der Merwe, who runs www.geocacher.co.za and is the founder of the Geocaching Association of South Africa (Gasa), said that costly GPS units had been a bone of contention among the geocaching community and they had no idea why they were so expensive. “We have been moaning and fighting for a very long time,” said Van der Merwe.

Avnic Trading’s sales and marketing manager, Jason Theunissen, said the pricing difference was not due to a deliberate dual-price structure but rather due to the low-volume market size in South Africa.

“We provide an infrastructure technical support, after-sales service and repair, and warranty support that is more expensive per unit sold than in the US,” said Theunissen.

Theunissen says that the United Kingdom, which has a small market like South Africa with higher costs, retails the same units for between £90 and £100.

A South African who takes part in geocachingsaid he had considered importing the Garmin E-trex Yellow and had concluded that he could retail them here for about R800.

Doug Geldenhuys, a Cape Town-based geocacher, says the units are very expensive in South Africa but still feels one is better off buying the unit here because importing the model on one’s own will mean there is no warranty coverage.

Digital treasure hunting

Geocaching (pronounced Geo-cashing) is an adventure game for GPS users, where geocachers use their GPS units to navigate their way to a cache site using coordinates posted on a website, such as www.geocaching.co.za.

A cache is a container, normally plastic and waterproof, in which the cache’s founder places a logbook, a pencil and a number of items such as toys, trinkets, coins, badges, maps, books or pictures.

The rules are simple. Punch in the waypoints of the cache into a GPS unit and use them to navigate your way to the site. Once there, you open the cache and fill in the logbook.

If the cache contains a number of items one item may be removed on the condition that it is replaced with another item.

Some caches contain a travel bug, an item which has a label attached with a unique number. A geocacher who finds a travel bug can remove it and place it in another cache, registering the move online. In this way the travel bug can move across multiple cache sites, sometimes across oceans and continents.

According to www.globalrat.com, geocaching in South Africa is growing rapidly. In January 2005, only 12 caches were placed in the entire month, but by July 2005 this had improved to 30 caches. This has once again almost doubled with 120 caches being placed over December 2005 and January 2006.

Quintus van der Merwe, the founder of the Geocaching Association of South Africa (Gasa), says there are currently more than 600 caches in South Africa with over 200 active geocachers. He says the majority of the cache sites are located in Gauteng and the Western Cape.

Dudley Stops, a geocacher in KwaZulu-Natal, says he got into geocaching when a client mentioned the sport in conversation. “I went online and researched the sport.”

He says it is a real family sport and often his family heads out for the day with their GPS units hunting for new caches.

Stops is currently rated 16th in the country and has discovered 122 caches and hidden eight. His brother, Rodney Stops, currently ranked fifth, has discovered 261 caches and hidden 11.

He speaks of a Durban couple who are getting married soon. The husband, an avid geocacher, has planned a route to find 50 caches on their two-week honeymoon to Cape Town.

“He has mapped out 50 that he wants to find,” says Stops, “but I think his wife will restrict him to two a day.” — Lloyd Gedye