Need to know
- Some customers awaiting their Brosa goods from Kogan say the new owner is imposing exorbitant delivery charges
- Many Kogan delivery charges significantly exceed what the customers already paid to Brosa
- Kogan says it's dealing with the mess made by Brosa and isn't applying markups to shipping
When Brosa collapsed under a mountain of debt in December last year, the business was quickly acquired by Kogan.
As part of the deal brokered by administrator KordaMentha, Kogan agreed to arrange the delivery of outstanding Brosa orders, in cases where those orders could be found. Kogan also had the option of offering a store credit.
Kogan tentativley agreed that any delivery costs on top of what customers had already paid Brosa would be 'reasonable' and only applied in 'limited circumstances'.
But Kogan ultimately decided not to offer store credits and to charge delivery fees in all circumstances. Now, some of the recipients of these goods are voicing outrage at the delivery fees Kogan is charging.
Shipping costs double and worse
On a Facebook page set up after the Kogan takeover, customers awaiting their orders are citing Kogan delivery charges as high as $1800.
Other customers have been charged in the $400–500 range but are no less outraged. In many cases, the shipping costs imposed by Kogan are two to three times higher than the original shipping costs paid to Brosa when it was still in business.
Mine is $506 for a sofa bed with chaise for delivery to inner city Brisbane
Brosa customer on social media
And many of the customers facing high Kogan shipping charges say they live in urban areas.
One woman in southwest Sydney who was quoted $291.99 on top of the $150 she'd already paid to Brosa for delivery of her couch, says "I'm still not holding my breath until I see it in my lounge room," adding "there is no option other than delivery or it's treated as abandoned stock. I didn't get the option of a store credit."
"Mine is $506 for a sofa bed with chaise for delivery to inner city Brisbane," says another social media poster. "I've paid Brosa $150 for delivery already. It's criminal, the fees they're charging."
Some Brosa customers say Kogan is charging them as much as $1800 to have their orders delivered.
Annabel tells us she originally purchased a sofa from Brosa in October 2022 and considers herself lucky that her order was found after Kogan took over. (Around 2790 Brosa customers with unallocated or unidentified goods will be receiving neither the goods nor a refund.)
But she's not happy about the $444 Kogan is charging for delivery.
"The main issue I have with this charge is that, not only is it more than the non-wholesale quotes I have found online, but it is three times what they would charge anyone purchasing the same item now. And I live in Coogee, which is generally considered Sydney metro," Annabel says.
The main issue I have with this charge is that, not only is it more than the non-wholesale quotes I have found online, but it is three times what they would charge anyone purchasing the same item now
Annabel, Brosa customer
Amy* got in touch with us with a story that's similar to what other Brosa customers have reported. She received some of her $50,000 order in bits and pieces before Brosa went out of business, and other missing parts are just starting to show up – along with the high delivery charges. (*Not her real name.)
"Items were broken, dirty, damaged and beds arrived without slats, so they were useless. A number of items just didn't arrive," Amy says of the initial shipments.
Kogan recently sent Amy an invoice of $444 to deliver the missing items. "I will probably pay it otherwise I will end up losing more," she says.
Kogan says it's only passing along costs
Despite the customer outrage, a Kogan spokesperson tells CHOICE the company isn't adding markups to delivery costs.
"Kogan sympathises with customers who are dealing with the fallout of how the Brosa business was previously managed by the prior owners. Kogan has not received any proceeds from previous orders, and is doing everything it can to help get allocated stock to customers. Kogan has used its scale and volume to offer customers the most cost-effective delivery options. Unfortunately the bulkier the item, the more it can cost to deliver. The fact is Kogan has passed on the wholesale cost of each delivery with zero mark-up."
Can the administrator take action?
KordaMentha says the Kogan delivery fees do not constitute a breach of the agreement Kogan entered into after acquiring Brosa.
"We have written to Kogan to understand the methodology applied in determining the delivery fee to be charged and Kogan have confirmed to us that the fee being charged is their wholesale cost of delivery with no margin or mark-up," a KordaMentha spokesperson tells CHOICE.
... Kogan have confirmed to us that the fee being charged is their wholesale cost of delivery with no margin or mark-up
KordaMentha spokesperson
KordaMentha is "unable to provide an update on the status of individual orders or provide comments on the reasonableness of delivery fees being charged by Kogan to individual customers", the spokesperson says, adding "we can't advise customers what rights they may have. They will need to seek their own advice."
KordaMentha advises that "any queries regarding store credits or the delivery fee being charged by Kogan" should be directed to Kogan – advice that would seem to be of little help to affected customers
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