Closed Sale

Reporter: Jackie Quist

It's the hidden cost built into everything we buy, a secret charge driving thousands of dollars out of our pockets each year, and lining those of our biggest retailers.

Now, mark ups have become madness, taking hold of stores and we're all paying -- big time.

Andrew Cavanaugh from the Australian Centre for Retail Studies knows just how crucial this invisible fee is to a retailers bottom line. "At the higher end you could be talking markups of 1000 percent. They might buy it for $1 and sell it for $10", Andrew said.

If you've purchased an electrical appliance recently, chances are you paid a mark up of between 5 and 30%. When it comes to clothing you'll pay double what the retailer did, with high end stores upping prices by as much as 300%.

And if you're in the market for jewellery, chain stores will charge you at least twice the amount they paid.

With summer around the corner a new pair of sunglasses might be on the agenda, but be warned. They can be marked up anywhere between 100 and 500%, and prestige brands like Gucci can cost you six times the wholesale price. "Furniture will traditionally be lower markup than apparel, it would normally be somewhere around the 80-120% markup range, but with a lot of furniture retailers now they are directly importing that product, markups that may be around the 150-200% markup", Andrew said.

With our retailers going mark up crazy, its little wonder profits are pouring in:

Last year Harvey Norman made $350 million; David Jones rang the till to the tune of $137 million, while Myer declared a profit of $93 million. "Retailers mark up their goods because they have a whole lot of expenses they need to pay. They need to pay wages, they need to pay electricity, they need to pay leasehold, they need to make money for their shareholders or their owner", Andrew said.

Quickly becoming a retailer's worst enemy, Mark Epstein has devised a way for consumers to avoid paying "mark up" altogether, and considering the state of the world's economy, his timing couldn't be better. "We want to do our share to develop consumer confidence. There are going to be tough times ahead but from what we've seen and what the warehouses are telling us there's no shortage of money out there when there are bargains on offer", Mark said.

It is a wholesale shopping revolution, exclusive access to the very warehouses from which our biggest retailers buy. After registering on a website, you'll be treated to a closed door, private sale, choosing from toys, cosmetics, leather goods, kitchenware and fashion.

And unlike traditional tours, you won't be forced onto a bus or attached to a large group. "This is a first and that's why shoppers are getting to our website to download tickets to attend these sales because they do need to have a ticket to gain entry", Mark said.

So far six warehouses have agreed to be part of the tour, but only two would allow us to record inside. The others were concerned their big retail clients wouldn't like them going rogue.

For further information visit the website at: