{"id":11436,"date":"2011-04-21T00:09:00","date_gmt":"2011-04-20T22:09:00","guid":{"rendered":""},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-29T22:00:00","slug":"interview-prophecy-co-za-s-paul-johnston","status":"publish","type":"post","link":"https:\/\/mygaming.co.za\/news\/features\/11436-interview-prophecy-co-za-s-paul-johnston","title":{"rendered":"Interview: Prophecy.co.za's Paul Johnston"},"content":{"rendered":"

e recently got a chance to catch up with Prophecy.co.za’s Paul Johnston to discuss the local hardware market. Yesterday we published a sneak peak of the interview, with an interesting explanation of how local hardware pricing <\/a>works.<\/p>\n

Read on for the full interview<\/p>\n

MyGaming:<\/strong> Prophecy seems to be SA’s most established online PC hardware retailer.  When did it all start?<\/p>\n

Paul Johnston: <\/strong>Well thanks for the compliment in the question! We launched the site in August 2005, having worked on the company for about 6 months prior to launching the site.<\/p>\n

MyGaming:<\/strong> How many people now work for Prophecy?<\/p>\n

Paul Johnston:<\/strong> 6 People at the moment, although not all are on site. I’m hugely proud of what our team is able to achieve with the number of staff we have. We aim to run our business as effectively and efficiently as possible, and automate as much of the process as possible.<\/p>\n

MyGaming:<\/strong> What have been some of the biggest challenges for Prophecy over the years?<\/p>\n

Paul Johnston: <\/strong>One of our biggest challenges was dealing with the recession. Sky rocketing petrol prices and the movement of the rand from R7.60 to R9.76 (to the dollar) combined with negative information in the news every day resulted in a huge decrease in sales. It took about 9 months for sales to return to pre-recession numbers.<\/p>\n

MyGaming:<\/strong> Do you think the hardware enthusiast market has grown significantly in SA over the past 5 years?<\/p>\n

Paul Johnston:<\/strong> I would say yes. While I don’t have any firm figures or formal research to back up this claim, our anecdotal experience talking to customers is that many of them are moving into PC gaming for the first time. People are becoming more interested in the technology behind their computer, rather than just the performance or experience it offers.<\/p>\n

MyGaming: <\/strong>What are some of your biggest selling components? <\/p>\n

Paul Johnston:<\/strong> We sell a lot of graphics cards, and at the current moment AMD (ATI) is outselling nVidia. On the CPU side, the latest Sandybridge CPUs are dominating the market – we sell very, very few AMD CPUs at the moment! Brand wise Asus, Gigabyte, EVGA, Club3d, Samsung and Antec are all big sellers.<\/p>\n

MyGaming:<\/strong> People regularly complain that hardware pricing in SA is artificially inflated. Do you think this is the case?<\/p>\n

Paul Johnston: <\/strong> This is a tough question. My answer would be yes, hardware in SA is more expensive than it should be … but not by as much as the average person thinks.<\/p>\n

I’ve written a long blog post on this going into it in detail, but here are some quick points:<\/p>\n

1. SA is a much smaller market. The cost of setting up local infrastructure for sales and support must be covered by a smaller volume of products.<\/p>\n

2. SA importers and distributors bring in a smaller volume of products than US importers. This results in them paying higher prices for products than the US importers.<\/p>\n

3. Prices in SA are listed including VAT (14%), while US prices are listed excluding local Sales Tax, that differs state to state.<\/p>\n

4. Shipping to SA is more expensive than shipping to the US – we are a smaller market, and a smaller volume of products are shipped to SA.<\/p>\n

Furthermore, for some products the volume sent to SA is not big enough to justify sea freight, while for the US it is.<\/p>\n

5. Yes, some suppliers (and retailers and importers) charge higher markups in South Africa than the USA – but I think the larger part of  the higher price we pay is determined by structural differences between the two markets rather than greed.<\/p>\n

As a rule of thumb, I think a fair SA price (inc vat) for a relatively mainstream product should be (at the current exchange rate) about 9.5x the US price, excluding US sales tax. As an example, the cheapest HD 6950 2gb is $264 in the US from New Egg, and cheapest HD 6950 we have is R2552.32.<\/p>\n

MyGaming:<\/strong> What would you like to see change in the local hardware industry?<\/p>\n

Paul Johnston:<\/strong>  I would love to see more importers and distributors take after sales service more seriously. Some distributors are great, and offer timely after sales service. But others are not so great – we often end up doing “warranty arbitrage” – in which we swap out the clients product at our own cost, and then wait for the supplier to honour the manufacturer’s warranty after many weeks of waiting and frustration!<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

We catch up with Prophecy.co.za co-owner Paul Johnston<\/p>\n","protected":false},"author":161,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[20],"tags":[],"class_list":["post-11436","post","type-post","status-publish","format-standard","hentry","category-features"],"_links":{"self":[{"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/posts\/11436","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/users\/161"}],"replies":[{"embeddable":true,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/comments?post=11436"}],"version-history":[{"count":0,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/posts\/11436\/revisions"}],"wp:attachment":[{"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/media?parent=11436"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/categories?post=11436"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mygaming.co.za\/news\/wp-json\/wp\/v2\/tags?post=11436"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}