IN2 SHEDS – Geelong – Another Shed Ripoff

Posted on : December 28, 2014
in 2 sheds rip off

In 2 Sheds

Check out the article here and here

Another one is added to the list and has been liquidated.

  • Debt of approximately $600,000
  • 62 people have lost deposits of $300,000

This is outrageous, something has to be done to stop this as the count of people that have lost deposits on sheds is getting very high.  I wonder how many more people need to lose their money before one of the so-called regulators does something to protect consumers.

in2sheds liquidation notice

Liquidation

It has been a while, and I am committed to adding new articles and research over the 2015 year.  I am adding some new features to the site and will start active development again.

I will be adding a paid advertising directory and will be offering some of the tools that have been developed by Shedeye to shed companies to help them with their sales process.  Stay tuned.

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Sheds in QLD cost more.

Posted on : October 10, 2011

Sheds in Queenslands rural areas to cost $27,000 more?

Pineapple Packing Shed

Under the new draft put forward by the Queensland Government, an extra $27,254 is to be added to farmers if they wish to build a new shed for packaging, storage or transport on their own property as construction on Strategic Cropping Land (SCL) now will come under the Department of Environment and Resource Management (DERM).

If this draft is accepted through the QLD parliament – then the extra $27,000 plus will be added on top of all the other fees and charges neccessary to construct a shed on agricultural land. So the local council that usually has influence over these local building applications will have to cede to the rule of the State Government. The red tape increase for a shed supplier in Queensland will also become a nightmare as dealing with all the DERM requirements regarding environment and resource management will be out of the normal field of the shed industry facilities.

The new requirements apply to sheds over 750 square meters and to packaging facilities, accomodation for workers and tourists. The additional fee would prevent the increase of an agricultural business expanding operations that would normally employ more people and generate more income.

A DERM spokesman said  “DERM will act as a concurrence agency for any development requiring assessment under the Sustainable Planning Act.” We are talking about the shed industry and agriculture here – and the DERM spokesman (not person) states this! Being a concurrance agency for any development leaves the door open for the department to step in at any time during a development. This draft should be altered drastically or it will effect the large shed construction industry in Queensland.

The problem with a draft is that the QLD government take submissions (only the ones they chose) and then enact the legislation very quickly. The shed industry in general – if it had an Australian Association of members, then it could lobby the government and may be able to prevent this going through.

Mango Packing Shed

The Queensland Times is the only publication that is reporting this new draft and a lot of support is needed if the draft is to be stopped. The rural and agricultural industries in Queensland have been through enough without another regulation that if not obeyed could end up in court. The recent Tax Summit also highlighted the need to reduce the red tape – and this one will effect many industries. Shedeye is preparing a submission to lodge in relation to this draft proposal, invites all in the industries to send submissions to Shedeye to compile this submission in opposing the implementation of this draft.

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ShedSafe – An Industry Body or A Brand – Part 2?

Posted on : September 28, 2011

Shedsafe errors in the requirements of its members?

This Part 2 (of many to come) is basically regarding the accreditation requirements placed on its manufacturers of sheds that are Shedsafe Accredited. The first requirement that is outlined below is in regard to the thickness of the steel roofing utilised in shed construction. Prior to delving into this area – a brief explanation of the product flow is required of the steel used in the shed roof cladding .

The steel manufacturers process iron ore in a furnace to produce steel – very basic and this is then transformed into the many steel products available on the market. The roof sheet steel is in a coil approximately 940mm wide with a BMT (Base Metal Thickness) of 0.42mm which can have a Coloured paint coating or Zinc Aluminium Alloy. This coil is sold to the metal rollformers to run through a rollforming machine to get the required profile of roofing. These companies also rollform the purlins, battens, tophat, gutters, ridge cap, fascia, barge mould, gable roll and fold most of the required metal flashings. These are all rolled from an order from the shed manufacturer according to the shed being supplied. In some cases the shed reseller may be part of a large group and simply order direct from the parent rollformer.

So the rolled coloured corrugated roofing arrives on site (and all other parts) as a direct result from the customer shed order that has been designed, approved, manufactured, delivered and ready for erection. Your shed is also issued with a 15 year roofing, cladding and purlin warranty from the steel manufacturer also sometimes the parent company of the shed reseller.

Lets start with the quote to the customer from the shed reseller. You’ve given all the details of your requirements of a shed and accepted the quote. Here is a small sample of one such Shedsafe Accredited reseller that is also owned by a national Shedsafe Accredited Shed manufacturer.

 

Details of Roof Sheet Thickness

 

Notice the roof cladding is 0.40 TCT Trimdek Profile C/B. The Trimdek and Colorbond description is fine, the 0.40 TCT is the roof sheet properties – that is in this case a 0.40mm thick Total Coated Thickness or back to the earlier description is equivalent of 0.35mm BMT (Base Metal Thickness). So this is 0.07mm thinner than the normal roof sheeting that should be installed on a domestic sheds. Why do they supply this sheeting for roof materials on sheds? Because it’s cheaper and many people don’t know the difference! So Shedsafe accredited resellers and manufacturers have been through the extensive training and requirements of the ASI run Shedsafe group. In fact in one of their requirements of shed manufacturers to become accredited is the fact outlined above regarding product warranty for 15 years. Here is the item by Shedsafe that requires manufacturers and resellers to:

 

15 Year Roofing Warranty

 

So the Shed Industry Benchmark group of Shedsafe – is setting the target or requirement of a 15 year warranty and its strick accreditation process is followed by all of its members. So the sample above (a shed which was supplied in 0.35BMT roofing) will have a 15 year warranty? WRONG.

Now lets look at Shedsafe again, an industry body run by the ASI of which BlueScope is the major sponsor. BlueScope also manufacturers the steel coloured coil for these very same Shedsafe accredited manufacturers and resellers. So lets examine the warranty for 0.35BMT roofing use in sheds.

 

 

BlueScope Roofing & Cladding Warranty

 

The main part in this warranty is that the supplier of the steel will not give a warranty on the 0.35BMT roofing that can be found in part 1 of the terms and conditions of the BlueScope Shed & Garage Warranty.  The basic error is that the BlueScope run ASI and its ShedSafe group have not covered all the small detail and continues to stipulate that Shedsafe accreditation is the Industry Benchmark. If they cannot enforce a simple base metal thickness that the manufacturer stipulates – what else is also wrong?

If your shed is supplied with 0.35BMT (or 0.40TCT) roofing – then it is not covered by the BlueScope warranty and the shed reseller will have to provide an independent cover for this warranty. Will they provide a 15 Year warranty on a 0.35 BMT thick roof sheet?
Accreditation is a simple word that enforces the meaning of having all the checks and processes in place to eliminate error.
This is one error that Shedsafe has to correct.
Next week part 3 – more detail of the marketing group Shedsafe!
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Steel shed price Rise

Posted on : September 19, 2011

Steel Price Rise Due in next 3 to 7 Weeks

BlueScope Distribution has notified customers of an impending two tier price rise in the coming weeks. It involves a base steel rise of between $60 to $120 per tonne on most product groups. As well they will be implementing specific surcharges to recoup key costs. These surcharges will be provided shortly.

 

Steel Shed Prices will rise with Australian Steel?

 

This comes after a significant bonus of over $3 million was paid to Key BlueScope Management (11 people) as a reward for leadership – not profit incentive? The notification states that volitilty in steel prices, rising labour costs, rising freight costs, rising processing costs, rising warehouse costs, and a rise in general utilities are the reasons. Along with the iron ore and coal price increase that has caused the steel price rise – the others will be included in the additional surcharges.

They state they have begun to receive notice from their steel suppliers (BlueScope Steel) of pending price increases. This does not look good for further sales of BlueScope Steel in the shed industry. With imports on the rise at cheaper prices currently – this price rise will further erode steel sales by BlueScope.

It will also follow by a notification by One Steel on its price increase – so many of the big shed manufacturers will be importing direct to keep competitive in the shed industry. Many of the big reseller shed companies will want to lock in prices for as long as possible to avoid this increase. Negotiations are already occurring between some of the big rollformers and BlueScope, along with talks between rollformers and shed companies.

 

Have you been told of this price rise?

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Shed Builders Beware!

Posted on : May 12, 2011

Building contractors are being targeted by the ATO from July 2012 and hence shed erectors are likely to be targeted also. If you don’t understand your tax obligations then you are likely to find yourself facing an ugly Tax Audit.  The ATO have done their sums and from the building industry as a whole they expect to reclaim $300 million in 2014-2015 and over $500 million over four years.

The following article in the SMH states “Mr Shorten said some businesses would be required to report annually on payments made to contractors in the building industry including the contractor’s ABN. The data would then be cross-matched.”

The killer piece of tax legislation for contractors is called Alienation of personal services income and it is a horror (not just the name of it).

The groups that should be unnerved by this ATO blitz are:

  • Builders that get paid (contracted) by a single Shed Company (receiving more than 80% of their income from a single source).
  • Building sub-contractors that work for a single Builder.  This applies to  sub-contractors that work for Shed Companies that are the builder.
  • Any contractor or sub-contractor that receives more than 80% of their income from a single source.

If you are in any of these groups and you have income split with you spouse, and claimed company expenses then you are in for some hurt.  Shedeye recommends that you seek the advice of your Accountant ASAP.

Don’t take this as advice, just a warning to get some advice!  Talk to your Accountant today, if he / she has no experience with alienation of personal services income, find one that does!

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Interest Free Shed and Garage Prices

Posted on : March 16, 2011

Interest Free, the joke is on you!

In Summary

  • There is no such thing as interest free finance; the finance company will make money on any deal.
  • You are paying at least 7.8% interest and you are paying most of this upfront.
  • If you pay one day late outside of the fictional interest free period you are up for up to 27.8% interest
  • If you are extremely disciplined and pay off the loan in full before the fictional interest free period is over, then it is actually quite a reasonable interest rate.

The details

There is no such thing as interest free when buying sheds and garages, and in fact it is beyond Shedeye’s comprehension how this practice is allowed, given our strict Trade Practices Act.

The interest free deal is touted by many of the major shed companies in Australia and is little different to the tactics that major retailers use.

The first thing you need to understand is that you can usually only get finance for the Shed Kit price, as the cost of erecting the shed, the slab and site preparation is not covered.

Let’s say you are offered a $5,000 shed kit price and the Shed distributor is offering this as a 12 months interest free deal. You are definitely paying interest, and in fact you are generously paying the interest up front, and here is why:

  • The distributor has to pay a “Fee” to cover the interest free period of approximately 5%-6% for the total 12 months upfront. In dollars this means approximately $239-$284 paid up-front.
  • There is a $65.00-$120.00 “Establishment Fee” paid up front to take out the loan.
  • There is a $5-$7 “Monthly Account Keeping Fee” for the duration of the loan.

Does this look interest free to you?!  This equates to an additional $364 to $488 on top of your shed price. This means that the distributor will charge you this amount to cover their costs and label it interest free.

You should have been able to get the shed for a price of $4,522 – $4,646 without signing up for the interest free DEAL! To put it another way, you’re paying between 7.8% and 10.8% on top of the price of your shed.

There is no such thing as an interest free period, you simply pay more for the shed!

As far as getting finance for your sheds, garages or carports, this is the second cheapest option after drawing down on the equity in your house. However, if you do not pay off the entire balance of the loan before the interest free period lapses, you’ll have to pay approximately 20% interest on the entire outstanding balance (the same way credit cards operate). For example, if you pay off the balance on the first day AFTER the 12 months interest free period expires, the shed will now cost you $6,000.00 and you would have paid a massive 27.8%-30.8% interest rate.

If you don’t plan to pay the loan off within the interest free period, you must consider different options. In order of preference, redraw on your existing home loan, get a line of credit for any property you have or take out a personal loan, secured if possible. If all of these are out of the question, then do not buy the shed!

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Shed Distributor Party!

Posted on : February 1, 2011

If you don’t want to meet a Shed Distributor at a party then it’s a good idea to live in Canberra.  But if you do want to meet one, then live in Queensland!

Shedeye has conducted a study to determine the distributor density per state and the results are interesting!

State Indexed Relative Number of Distributors per capita
ACT 100
SA 190
VIC 196
NSW 223
TAS 295
NT 319
WA 324
QLD 493

This shows that you are nearly 5 times more likely to meet a shed distributor in QLD than if you live in the ACT.  Victoria and SA are the surprise here, both with very large populations but with a relative low distributor population per capita.

This gets even more interesting when you start to question why, as there are quite logical reasons for this disparity.  Taking a look at Land Area, Population density and the % of the population in the capital city in each state shows a good part of the story.

State/territory Land area (km²) Population (2006) Population density (/km²) % of population in capital
Australian Capital Territory 2,358 344,200 137.53 99.6%
New South Wales 800,642 6,967,200 8.44 63%
Victoria 227,416 5,297,600 23.87 71%
Queensland 1,730,648 4,279,400 2.26 46%
South Australia 983,482 1,601,800 1.56 73.5%
Western Australia 2,529,875 2,163,200 0.79 73.4%
Tasmania 68,401 498,200 7.08 41%
Northern Territory 1,349,129 219,900 0.15 54

(Source from Wikipedia and accurate at 2006)

Combining all of this data shows strong correlation between the percentage of population in the capital cities, an almost linear relationship with a couple of blips!  The population density has less of a correlation, due to most of Australia being an arid and barren place.

State Indexed Relative Number of Distributors per capita Population density (/km²) % of population in capital
ACT 100 137.53 99.6%
SA 190 1.56 73.5%
VIC 196 23.87 71%
NSW 223 8.44 63%
TAS 295 7.08 41%
NT 319 0.15 54%
WA 324 0.79 73.4%
QLD 493 2.26 46%

The correlation is very clearly related to the population density and the % population in capital cities.  One of the reasons for this correlation is attributed to the size of the blocks of land; small suburban blocks may not be suitable to hold large domestic sheds, while larger blocks are.  Hence the percentage  of the population in the capital city is one of the strongest influences, coupled with the policies governing the size of the blocks and the restraints in regard to planning permits on sheds in these cities.

QLD has the best conditions for Shed Distributors in Australia, with a relatively low centralization of population in the capital city and a relatively low population density.  Victoria is the real surprise with very high percentage of the population in the capital and a very high population density relative to all other states.  This again is a clear indicator of why there are relatively less distributors in Victoria.

The story is a bit more complex than the above tables indicates.  As with all statistics there is more to some of these stories than meets the eye.  For example, the Canberra market is largely served by nearby NSW border towns, due to the prohibitively expensive and rare commercial land in the ACT.  That said, I think you will find that this is an interesting piece of analysis!

Shedeye has analysed the shed industry down to discrete regions to ascertain potential areas that are saturated or under-serviced.  This report is available on request from support@shedeye.com.au

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The Shed Duopoly Monopoly

Posted on : January 27, 2011

Shedeye has conducted analysis[1][2] on Australia’s Shed Distributors, and their link to wholesaler’s and manufacturers.  The results are surprising and show that while there is a good degree of competition in the distributor[3] and wholesaler[4] sector, the manufacturer [5]sector is exclusively tied to Bluescope as a source of their steel.

The graph below shows that Bluescope has dominance on the shed distribution chain and hence will have significant pricing power.   The “Unknown” comes from ambiguity in some of the manufacturer company reports as they source some of the Cold Rolled steel from Bluescope, however it is not clear how much they source from China or elsewhere, it could be the “Unknown” quantity falls to Bluescope.  As you can see there are few distributors that do not directly or indirectly source their products from Bluescope.

This graph shows that even in Roll Forming Bluescope has significant market dominance across the distributors of Australia.  This again shows that the competition is almost limited to a duopoly and the barrier to entry is very high due to the vertical integration of the supply chain and the high capital costs associated with this process.   Titan Sheds and Garages has made successful inroads into this arena, using its distributor network in QLD and NSW to successfully become a specialized shed roll former in their own right.

This looks much more promising from a competition point; however when you take a closer look into who actually owns the largest distributors, some layers of the onion start to unfold…..  Stramit owns both Fair Dinkum Sheds and Garage World, while Lysaght (Bluescope) owns Ranbuild.

This shows that the independents own just less than 50% of the distributor market and the two big players have slightly over 50%.

An extremely interesting market when you look at this.  Bluescope has vertical integration from the production of their Cold Rolled Steel, Roll Forming to distribution.  However, nestled in each stage of the supply chain they have a wholesaler division that is servicing other companies.  A very interesting and a very powerful pricing position indeed.  Micheal Porter would be proud of Bluescope for ticking off each one of his competitive advantage points!

There are quite a few things in Bluescopes favor regarding price rises and sheds

  • Sheds are still a multiple cheaper than the substitute products of brick and steel.
  • Steel is well suited to Australian climate
  • The supply chain with steel sheds is sophisticated and impressive
  • The simplicity of erection is hard to beat and results in quicker time to completion.

Does this indicate that sheds are more expensive than they need to be?  Are Steel price rises that are being passed onto the distributors reflected in the international steel prices and even iron ore spot prices?

Do you want more detailed analysis than this report provides?  Shedeye has a detailed report that gives state and geographical information on the shed distributor market in Australia.  Please contact support@shedeye.com.au to request this report.


[1] This report is based on the number of distributors and may not accurately reflect true steel volumes.  For example one distributor may be selling as much as 3 distributors by volume.  Comprehensive steel volume data is not available and is very difficult to ascertain accurately.  That said analyzing the links in the supply chain to distributors does give you a very good idea of market control and dominance.

[2] This applies only to custom designed sheds; prefab sheds such as Abasco and Spanbuilt are not included in the analysis.  Even though they do represent a good percentage of Shed sales in Australia.

[3] Distributors are the retail outfit of the Shed Wholesalers.

[4] The Wholesalers are the Brands or buying groups (Fairdinkum, Ranbuild, Garage World, Sidach, Titan) and they handle the sourcing of shed components, ordering from the manufacturer, the software and engineering.

[5] Manufacturers are defined as a company taking the raw Cold Rolled Steel product and Roll Forming it into a product.  Also commonly called Roll Formers.

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Is Shedeye Independent?

Posted on : January 5, 2011

We are 100% independent and have no affiliation with any Shed or Garage Distributor, Manufacturer or Wholesaler.

Our interest is in giving  you the tools and information you need so you can:

  • Make informed decisions.
  • Streamline the Quoting process, giving you quick access to all of the major distributors in Australia.
  • Visualise your shed with a 3D Photo
  • Save you considerable time
  • Help you get the best price and product.

Does Shedeye have any conflict of interest?

The idea of shedeye was sparked by my fathers experience as a Distributor.  He manages the Sidach Albury store and has for the last couple of years.  This site in no way benefits him and will not in any way.  The only way it could benefit him is if he provides the best service and the best product, and that is open to any distributor.  Like any idea it had to be seeded from somewhere 🙂

How does this site make any money?

It currently makes no money!  It is a community service.  Shedeye is going to offer the 3D designer and Photo Rendering to distributors to use on their premises, however this will in no way effect the objectivity of this site.  Shedeye will also charge for detailed demographic information on the shed industry and sheds.

Why is this site required?

As far as a business sector is concerned, the Shed sector is very mature and competitive.  Competition is based around the Information Technology systems that the Wholesalers have and their branding.

Shedeye wants to ensure that you get the best product and the best shed price, as unfortunately there are some rouges out there selling misinformation and more importantly there are many outstanding distributors that should be getting your business.  In fact the margins that distributors make varies region by region, distributor by distributor.  As does the price, service and quality of shed you receive.  Shedeye wants you to be able to compare oranges with oranges, and ultimately for you to get a great shed.

Make sure that you check the affiliations with any site you are using, Shedeye is the only truly independent site that we know of and then there are those that are a clever front for distributors or wholesalers.

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6 of 10 – Things You Must Know Before Buying A Shed or Garage!

Posted on : August 26, 2010

Make Sure You Get Council Approval For Your Structure!

The variation between councils is great however there are a handful of situations where you do not need council approval and there are some limitations you need to be aware of.

  • Some councils do not require approval if the shed is smaller than 3 meters in width and 3 meters in height.
  • Some councils will allow the shed to be on the boundary while other councils will demand the shed to be situated at least 2 metres away with walkways .
  • Some councils will not allow certain shed colours due to the restrictions on the reflection of light and location aesthetics.
  • Some councils will not allow a shed if there is less than a certain percentage of land available on the block.

Just remember to check everything with your local council first!

This is generally what happens when you buy a shed or garage:

1)      You choose the kind of shed you want.

2)      You find a shed distributor you’re happy with.

3)      You decide how you’re going to finance the shed.

4)      You receive an engineering report from the shed distributor.

5)      You submit the engineering report to your local council, as well as an application for permission to build the shed.

6)      You receive advice from council whether your application is approved or not.

7)      If your application is approved, you can go ahead with your shed or garage.

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4 of 10 – Things You Must Know Before Buying A Shed or Garage!

Posted on : August 23, 2010

Are You In A Wind Prone Area?

Simply ask your local council and your local shed distributor, it is too complicated to work out.

It is too hard to work out on your own as is based on the probable maximum wind speed in your region, if your site is on a hill or escarpment, if your site is located in suburbia or rural and the size and importance of the shed.

If you are in a wind prone area, the shed design needs to be stronger with more steel and will cost more.  This expense is a must otherwise your shed will blow down and will be a risk to yourself and others.

You will also have to check with the shed company to make sure the shed is strong enough to tolerate your area’s wind rating.  Your local shed distributor should know if you live in a wind prone area and what wind rating your shed needs to have.

As always, it’s essential that you check with your local council first before buying and installing your shed.  For a comprehensive analysis of the wind ratings take a look at the Steel Shed Groups publication Wind Actions on Steel Sheds and Garages (http://www.steel.org.au/_uploads/429_Wind_Actions_Steel_Sheds_2009.pdf)

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1 of 10 – Things You Must Know Before Buying A Shed or Garage!

Posted on : July 29, 2010

What Is The Height Of The Vehicle That You Are Going To Put Into The Shed or Garage?

The rule of thumb is that you will lose about 500 millimetres of clearance on the advertised Roller door height.  You can get a bit more height if you choose a gable entry over a side wall.

This is a very important consideration, as the height of your shed and the size of the roller door are contingent on the height of your vehicle.  There’s no point in buying a shed or garage only to find out that your boat or 4WD won’t fit in there because the shed roof is too low.  It’s vital that you take the proper measurements before you even go looking for a shed or garage.

Make sure you confirm your measurements and the amount of clearance your shed or garage will have with your local distributor.

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