GST on Imports

[Mike Busby]

Hardly Normal can whistle all he likes about losing profits to people buying overseas and it won't do him any good. The amount purchased wouldn't be a high enough revenue raiser for the government to seriously consider taking it seriously. Just because NZ is trying to tax thier population into teh ground isn't a reason for us to do the same.

(When I am feeling very depressed I go to my local HN store and follow the computer sellers mumbling "liar, thief, numpty, scham merchant bull artist" etc until I feel better and scare off a few customers" - Hey it's a hobby. )

[Waldo]

Solomon Lieu just had a cry on Lateline Business, essentially he and others are calling for protectionism on the retail sector. Maybe I should petition the government for protectionism on the ad/design industry - somehow I think that would fall on deaf ears.

Success against competition is all about innovation and adding value on your product/service.

[johnc]

Interesting isn't it in the '70's and 80's as the Australian clothing manufacturers were hitting the wall one after the other under the weight of cheap overseas imports brought in by Lew and others there was silence from the retail industry as they reaped the profits. Now they are feeling the small sting of competition from the online industry they are seeking protection.

It is a problem for us if we kill retail because it is a large employer of unskilled and semi skilled labour just as manufacturing was. However any national discussion needs to look at this across all sectors not just the import reliant retailers. The words pot, kettle, black apply here.

[damian]

Yes it's funny isn't it. Gerry Harvey made his money undercutting the traditional department stores, now he's crying because online is killing his business.

The customs threshold was raised under howard because the administration of the previous threshold was costing money. Think about it, on a $1k item they can make at most $150, but to collect that they ahve to open many many packages most of which won't yield a return, then they have to collect the tax. The previous threshold was $250 or $400 or something, I can't remember. Imagine all that trouble for a lousy $37.

Most of HN's product line is too big to economically import privately, and more is 240V which brings other problems. Maybe he's losing accessory sales, but not fridges.

As has been pointed out the savings are in the order of 40% (or whatever) not 10% so all they will achieve is bad feeling next time you, me and them need a fridge.

[Gwhat]

Hi,

This isn't a beef, more an explanation.

Originally 5 or so years ago, you could import $250.00 (goods + freight) without doing a formal entry. Great convenient and logical. BTW Customs don't open every parcel, they rely on the integrety of the declaration most of the time.

When the threshold was lifted to $1000.00 it was logical with countries that we have a Free Trade Agreement with e.g. USA, provided the goods were made in the USA. But as many goods (particularly electronics) are manufactured in Asia and either direct imported or distributed through the US the government not only misses out on GST but Duty as well!!

From our perspective it isn't too bad until we get the 'phone call..... "My brother in law picked up an XYZ in the states when he was there, it doesn't work, you're the agent fix it please" OK we try to help but that's effort we could be putting into our customers.

Direct importing and distributing is expensive when done in volume (like us) all the add on costs are significant, Product Liability Insurance, Customs Brokerage, Bank Charges etc. etc.

Individual importers generally don't factor in all the costs, shipping, exchange rate and bank fees (the banks love it when you buy with a credit card from overseas). Also, what happens if there's an issue with the product???

Hardly Normal shouldn't be beefing too much as bulk (size) and voltage are good reasons not to buy their product lines overseas.

Again, my thoughts not a beef... well maybe just a little one.

Regards

Grahame

[Drillit]

HI jimbur,
Having noted other comments - it is easy to focus on the real issue. With the exchange rate as it is - we can buy goods at about 50% of the retail costs here and when you add postage the saving is about 30-40%. So can I suggest to some of our retailers that they think about their prices more realistically. People are price driven, irrespective of loyalty. Drillit.

[Big Shed]

Bill Shorten was on the ABC News tonight and emphatically stated that there would be no change to the GST regime for imports or that the limit would be lowered.

He repeated himself several times and stated that our local retailers would have to learn to compete with internet sales as they were a fact of life.

So it seems that issue has been laid to rest and Mr Harvey will have to live with that.

[Fuzzie]

I think the problem the retailers have is the Internet makes it easy to shop around. This is a game changing issue and it is not about GST. I know when I shop around however, I sometimes spend more on the petrol visiting stores than I save on the goods, but if you find it online the delta cost to shop around is much less.

The shelf price of things in HVN et al is usually not the lowest you can buy in Australia. Usually you can find a domestic retailer that will save you 20+% even though you are still paying GST and it comes from a local business.

And buying overseas isn't necessarily cheaper. Yesterday for instance I finally bought a Veritas honing guide form Carbatec for $79, (admittedly a sale price, but that is part of shopping around). The Lee Valley price is Can$64.50 and if you buy it in Canada you get charged GST of around 15%, depending on Province, which in the end works out to be about the same as my local buy price.

[jimbur]

The 'debate' seems to be heating up. I noticed last night an item on the ABC bewailing the problems it is causing to small businesses.
Jim

[Bob38S]

Myer and Hardly Normal came out last night saying that they are going to set up online "stores" in China and ship straight to the buyer.

[cultana]

Many years ago there was an article in one of the IT mags re Australian bricks and mortar business never fully appreciating the concept of online sales. The article suggested that they have a second class approach to the concept of net/online sales. The web sites were below par and hence not conducive to online buying. Much has not changes in this regard.

The cry of the high value of the Aust $ cf the US $ is trivial and just an excuse. When the parity was about AUS$1:0: $US0.60 it was in many cases still viable to say purchases reference books from Amazon than try to get them locally. Amazon was quicker in delivery as well.

As for small businesses, most are self destructive.
I ordered 3 grinding wheel from one of the local industrial suppliers. This order included me paying the transport costs. 5 weeks later still no grinding wheels even though Norton has plenty in stock of what I want. Yes I rang Norton to check before I made the order.
So don’t expect me to be sympathetic to small business as most fit the above scenario, especially when outside the big cities.

Perhaps there should be an inquiry on markup prices in Australia before these businesses start bleating too much.

[q9]

Before the internet, the yanks did mail order very, very well. They still do. I think the difference is that they set out to make that their business model from the outset, rather than trying to catch up later.

I remember back in snailmail days ordering something from the States, and being very surprised when the item arrived within 3 weeks. Various local vendors hinted at 6 months - maybe, if they could get it...

[jimbur]

Before the internet, the yanks did mail order very, very well. They still do. I think the difference is that they set out to make that their business model from the outset, rather than trying to catch up later.

I remember back in snailmail days ordering something from the States, and being very surprised when the item arrived within 3 weeks. Various local vendors hinted at 6 months - maybe, if they could get it...

Not just the yanks. I worked many, many years ago for a bookshop in the UK where the main volume of sales was to overseas customers. Turnround was usually the day the order arrived and that's going through a typing pool as well as the packing department.
Cheers,
Jim

[beeroll]

Before the internet, the yanks did mail order very, very well. They still do. I think the difference is that they set out to make that their business model from the outset, rather than trying to catch up later.

I remember back in snailmail days ordering something from the States, and being very surprised when the item arrived within 3 weeks. Various local vendors hinted at 6 months - maybe, if they could get it...

You will have the same experience today ordering from well set-up and well run US online businesses. They really do have it all over the bulk of the local retailers in terms of stock levels, shipping systems and customer service. Not to mention price.

Harvey Norman and Myer have had 15 years' warning that online retail was going to be a game-changer, and they've done basically stuff-all to prepare themselves. Gerry Harvey was known to be highly skeptical of the potential of online retail. Seems that skepticism is backfiring on him now.

When I consider the choice of dragging myself out through Sydney's horrendous weekend traffic to one or other retailer only to be told that the person I spoke to on the phone was wrong and that in fact they don't have stock of whatever it is I'm looking for, and that in any case it's three times as expensive as US retailers are selling it for, and that it will take months to come in; or sitting at home looking at products online, comparing user and expert reviews, and placing an order - well, there's no comparison, is there?

Why would anyone be surprised that Australian consumers are turning to US sites that are only too happy to ship their stock across the Pacific?

If Australian retailers genuinely can't get bulk stock into their stores for less than I can ordering individual items and paying individual shipping, then that is something that the government should look at.

But there is a big difference between "genuinely can't do it" and "have been too lazy/shortsighted to set themselves up to do it".

If you look at computer component retail, you will see that there are now a slew of Australian online sites that sell product, with local invoices, at prices almost indistinguishable from their US counterparts. They've managed to do it - other retailers need to start competing too.

The 240v argument might carry some weight - unless you took even the most cursory look at UK tool retailers.

Amazon and the like have been busy relaxing their shipping restrictions on tools and hardware, among other categories.

If I were an Australian retailer in that space, I'd be either getting very nervous, or I'd be employing some really good web developers and fulfillment specialists.

[jimbur]

We've been told ad nauseam by the same retailers that it's a new world out there and if we can't manufacture as cheaply as other countries it's just our hard luck. Get the same competition in the retail as in the wholesale sector and they don't like it. Most of us check the prices of items online before using local retailers. If it makes sense to buy from a local store whether for convenience, back-up (insert hollow laugh), knowledge of the product etc. then we do it.
Cheers,
Jim