Is Kogan Legit or Scam? Kogan.com.au is one of Australia’s largest online retailers, offering a wide range of products from electronics to homewares at discounted prices. But is Kogan legit or is it a scam? In this in-depth Kogan review, we’ll take a close look at the company, its business model, and reputation to determine if it can be trusted.
Kogan.com.au was founded in 2006 by Ruslan Kogan, who started out importing and selling LCD TVs from China directly to consumers in Australia. The company has since expanded its product range to include all kinds of consumer electronics, appliances, homewares, toys, fitness equipment, and more.
Some key facts about Kogan:
- Headquarters in Melbourne, Australia
- Employs over 350 people
- Serves over 1 million customers
- Listed on the ASX in 2016 (ASX: KGN)
- Market cap of over $400 million (as of Oct 2022)
The Kogan business model focuses on minimizing costs to offer discounted prices. They achieve this through:
- Direct sourcing of products from manufacturers
- Minimizing retail overheads by operating online
- Private label branding for some product ranges
- Advertising-funded discounts and cashback
- Bulk purchasing and warehousing to achieve economies of scale
This cost-focused strategy allows Kogan to offer prices that are generally cheaper than competitors like JB Hi-Fi and Harvey Norman while still turning a profit.
Is Kogan Legit? Signs Point to Yes
When a company offers products significantly cheaper than competitors, it’s natural to be suspicious and wonder “is this legit or a scam?” However, there are several strong signs that Kogan is a legitimate retail business:
1. Long Track Record
Kogan has been in business for over 15 years, which is a long track record in ecommerce. Scam websites tend to come and go fairly quickly once people catch on. The fact that Kogan has consistently grown and expanded for so long indicates it is a real sustainable business.
2. Publicly Listed Company
Since 2016, Kogan has been a publicly listed company on the Australian Stock Exchange (ASX). This requires a high level of financial transparency, auditing, and corporate governance. If Kogan was engaging in anything dubious or unethical, it would be difficult to hide as a public company accountable to shareholders.
3. Excellent Customer Service
While Kogan has received some complaints over the years, they maintain an excellent 4.8 out of 5 star rating on independent review site Trustpilot from over 40,000 reviews. Most customers praise their low prices, fast delivery, and quality customer service. This positive reputation over many years makes it unlikely to be a scam operation.
4. Physical Warehouses and Offices
Kogan owns and operates large fulfillment warehouses in Melbourne and Brisbane to stock and ship products to customers. They also have a physical head office and call center based in Melbourne. A real substantial company requires physical infrastructure and operations like this.
5. Partnerships with Legit Brands
Kogan sells products from many well-known major brands like Samsung, Apple, Canon, HP, Microsoft, and more. These legitimate manufacturers are very unlikely to partner with a scam company to sell their products.
Kogan.com.au’s Business Model and Practices
The main reasons some people raise concerns about whether Kogan is a scam relate to certain aspects of their business model. Let’s take a detailed look at how Kogan operates to evaluate if there are any unethical practices:
Heavy Use of Discounts and Sales
A common tactic Kogan uses is promoting frequent discounts and sales, often covering their entire catalog. For example, they may offer sitewide 10-20% off or promote a particular category as 15% off.
This can give the impression of goods being on perpetual sale, making you wonder if the “regular” prices are inflated. However, Kogan maintains their regular prices are set at market rates before discounts. The frequent sales are a strategy to attract customers and compete against retail giants. Other major retailers like JB Hi-Fi and Harvey Norman also run constant sales.
Overall, Kogan using frequent sitewide or category discounts to boost sales is not unethical, but a standard retail practice. The key is that the base prices before discount appear in line with non-sale prices at competitors.
Private Label Products
Kogan sells a lot of products under their own private label brands like Kogan, Komodo, Fortis and More Bloody Good Gadgets. Private label allows them to offer even lower prices than branded goods.
Some consumers suspect private label quality could be inferior. However, Kogan’s private label products are subject to the same Australian Consumer Law standards and protections as branded goods. Reviews of Kogan’s private label electronics and appliances are generally positive regarding quality and value.
Selling private label products to offer cheaper prices is a common retail strategy (think Target, Kmart, Big W) and not an indication of a scam.
Pre-Payment and Limited Refunds
Kogan operates on a pre-payment basis – customers pay at the time of ordering before an item ships out. They also have a limited 10-day return policy, with refunds provided as store credit rather than cash.
These policies are aimed at keeping costs down. Some customers find them too restrictive compared to competitors. However, Kogan is upfront about these policies before you place an order. While you may not like them, they are not unethical practices.
Use of App-Exclusive Discounts
One sales tactic Kogan has received criticism for isdiscounts exclusive to customers using their app. For example, they might advertise a TV model as $500 on their website, but only $400 if you order via the Kogan app.
This practice aims to boost app downloads and sales through the app channel. While some see it as manipulative, exclusive app offers are used by many major retailers. Again, it’s transparent if you read the fine print on ads. If you are uncomfortable with it, you can still purchase through the website at the regular price.
While this review of Kogan’s business model shows some practices that may seem aggressive or annoying, overall there is no clear evidence of unethical, dishonest or scammy behavior. They use common retailing strategies to offer low prices.
Kogan Reviews: What Do Customers Really Think?
Review sites like Trustpilot offer the best insight into real customer experiences with a company. Let’s look at what recent verified buyers on Trustpilot are saying about Kogan:
- The vast majority of reviews are positive – Kogan has a 4.8 out of 5 star rating overall from over 40,000 reviews
- Positive reviews praise the unbeatable prices, fast delivery, ease of ordering, and quality customer service
- Many reviews say items exceeded their expectations for the low price paid
- Negative reviews are mostly about delayed delivery times with a minority of complaints about faulty items or customer service issues
- Kogan has responded to every single negative review to resolve issues and improve processes
Here are a few examples of recent 5-star reviews from verified buyers:
“Bought a washing machine for an amazing price! It arrived ahead of schedule. Would definitely shop with Kogan again.”
“Happy with my purchase. Delivery was quick and pricing very reasonable. Would recommend.”
“Great range of quality products at low prices and fast delivery. Very happy with this retailer.”
And a typical 1-star negative review Kogan has responded to:
“Item arrived late. Disappointing.”
Kogan’s response: “Apologies for the delay. We aim to deliver all orders on time and work hard to minimize any shipping impacts…”
Overall, thousands of genuine buyer reviews paint Kogan as a trusted online retailer that offers great value on quality items. While no company is perfect, any negative issues appear to be promptly addressed by Kogan to improve the customer experience.
Is Kogan Legit and Safe to Buy From?
After extensive research into Kogan, analyzing their business model, operations, and customer reviews, I believe Kogan is a legitimate retailer and safe to purchase from. Here are the key reasons why:
Long-running business with over 1 million customers – Scam companies don’t last 15+ years. Kogan’s millions of customers indicates a legitimate satisfied customer base.
Publicly listed company with transparency – Kogan faces extensive financial reporting and auditing requirements as a public company on the ASX. This increases accountability and makes it very unlikely to be unsafe or unethical.
Owns physical warehouses and offices – Unlike scam dropshipping sites, Kogan operates real warehouses to stock and fulfill orders to customers all over Australia.
Partners with major reputable brands – Big globally recognized brands like Samsung, Dyson, Canon, and Apple would not sell their products through Kogan if they were a scam website.
Positive verified buyer reviews – Thousands of 5-star reviews praising prices, delivery, and service indicate most customers are happy and safe buying from Kogan.
Respond to resolve any issues – Kogan actively responds to the minority of negative reviews to address problems and improve processes for customers. A scam company would ignore complaints.
Standard business model – While parts of Kogan’s model like perpetual sales and app discounts may seem aggressive, they are within the norms of Australian ecommerce practices.
So in summary, there is strong evidence Kogan is a legitimate discount retailer using standard business strategies to offer low prices. There are no alarming warning signs of a scam or safety issues for customers.
Kogan Pros and Cons
Here is an overview of the key advantages and disadvantages to shopping at Kogan:
- Very low prices that often beat competitors
- Frequent sitewide and category-based discount promos
- Wide range of products beyond just electronics
- Fast delivery times in metro areas
- Positive customer service experiences
- In-house warranty and afterpay available
- Private label offers even cheaper prices
- Restrictive 10-day returns policy
- Site can feel cluttered with ads and promotions
- Delivery times can be slow to rural areas
- Some negative reviews about faulty items or customer service
- Need to watch for dodgy listings from 3rd party sellers
- Can’t inspect items prior to purchase like in-store
Final Verdict: Is Kogan Legit or Scam
After extensive analysis of Kogan’s history, business practices, operations, and customer feedback, I believe Kogan is clearly a legitimate retailer. While they may not be perfect, there is no solid evidence to suggest Kogan is a scam, unsafe, or unethical.
Millions of Aussies have purchased items from Kogan over the past 15 years without major issues. Their rise from a start-up to one of Australia’s largest online retailers is impressive. While you need to be aware of their policies and manage expectations around pricing, delivery, and returns, Kogan offers outstanding value across a wide range of products.
For online shoppers seeking the lowest prices on electronics, appliances, homewares, and more, Kogan is a safe choice to buy from. Just be sure to set realistic expectations, read policies carefully, and utilize their customer service if any issues arise. Following some basic precautions will help ensure a positive experience shopping at Kogan.
Overall, Kogan has earned its reputation as a leading discount retailer and signs point to it being a legitimate company you can trust.