Amazon purchases and new GST Rules

[Huon pine fan]

Mr Morrison said in a statement. “The government doesn’t apologise for ensuring multinationals pay a fair amount of tax here in Australia. services."

Mr Morrison, surprise, surprise, is being somewhat disingenuous with his statement. Multinationals and for that matter Australian companies, do not pay GST they collect GST. My political cynicism tells me that by using the words multinational, pay and tax in the one sentence he thinks that he can bluff the populace into thinking the government is doing something about the income tax that they are not paying.
As someone else noted, I don't think that Australians really begrudge paying 10% GST. I do think however that we have an issue with some of the extortionate mark-ups applied locally.

[Chris Parks]

I know of a group on another forum who are about to make Morrison's life a little difficult for a while. They are going to buy very cheap womens erotic underwear and address it to his PO box to see what happens. This group generally carry through what they say and have been known to cause businesses that rip people off some considerable problems so it will be interesting to see what happens.

[Beardy]

This whole concept that the local retailers are ripping us off blind with 300 odd % markups has got me a bit miffed.
If retailing is such a lucrative money maker, why isn’t the likes of guys here jumping on the gravy train and making a killing out of it? You would be mad not too if it was true.
And why can’t the little one man band corner shop be undercutting the big chain store retailers by settling with only a 200% markup but still be on a winner? Maybe they don’t want to make easy money and rather just shut up shop.

Just doesn’t make sense does it.

[ian]

What I'd like to know is if Amazon.com.au's geoblocking is legal.
It's not like it only applies to copyrighted material where there might be some argument about Australians should purchase the item through the Australian rights holder.
Which becomes very tenuous where there is no Australian rights holder.


On the face of, forcing Australian consumers onto a local site with restricted range and/or grossly inflated prices, is a restraint of trade. Perhaps bordering on unconscionable conduct.

[ian]

This whole concept that the local retailers are ripping us off blind with 300 odd % markups has got me a bit miffed.
If retailing is such a lucrative money maker, why isn’t the likes of guys here jumping on the gravy train and making a killing out of it? You would be mad not too if it was true.
And why can’t the little one man band corner shop be undercutting the big chain store retailers by settling with only a 200% markup but still be on a winner? Maybe they don’t want to make easy money and rather just shut up shop.

Just doesn’t make sense does it.

one issue is that the little one man band corner shop does not have the buying power of a chain store retailer.
It's not uncommon for the retail price of a chain store special to be less than what the corner store can buy the identical item for.

The real pain of Amazon's move will be felt in the area of specialty merchandise.
According to the Productivity Commission around 30% of low value imports are bicycle parts. One would have to think that a large proportion of these imports are going to one man band bike stores.

And given this is a woodworking forum, how likely is it that Carbatech or another retailer will stock the full range of Pfeil carving tools or Auriou rasps?

[rrich]

Just found this on MSN.COM



Amazon will soon be sub-prime, if you live in Australia. The company is blocking Aussies from shopping on its international websites, and limiting them instead to its much smaller local platform, Amazon.com.au.

The change, which takes effect July 1, is Amazon’s response to a 10% goods and services tax that Australia is adding to all imported online goods worth less than A$1,000 ($756). Previously, GST only applied to most goods and services sold in Australia, as well as imports worth more than A$1,000, giving companies that sold cheap imported goods an advantage over local suppliers.
“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites,” an Amazon spokesman told Reuters. Goods sold on Amazon.com, the US site, will cease shipping to Australia on July 1.
Amazon is still fairly new in Australia, where it only launched in December 2017. Amazon.com.au has roughly a tenth the selection of Amazon’s US website, with about 60 million products compared to nearly half a billion. When Amazon first launched in Australia, local media also reported that prices on the site weren’t all that great, and could be beat at regular department stores.
For now, the GST change looks like a win for local businesses, which will have an easier time retaining shoppers while Amazon builds out its Australian inventory. But taxes seem unlikely to protect brick-and-mortar shops from Amazon—.com or .com.au—in the long run.

[Beardy]

What I'd like to know is if Amazon.com.au's geoblocking is legal.
It's not like it only applies to copyrighted material where there might be some argument about Australians should purchase the item through the Australian rights holder.
Which becomes very tenuous where there is no Australian rights holder.


On the face of, forcing Australian consumers onto a local site with restricted range and/or grossly inflated prices, is a restraint of trade. Perhaps bordering on unconscionable conduct.

is that a national or international law? My guess is that given it is not an Aussie owned site they can do what they like and Australian law has no effect on them.

[ian]

I have no idea. Just curious.

[q9]

This whole concept that the local retailers are ripping us off blind with 300 odd % markups has got me a bit miffed.
If retailing is such a lucrative money maker, why isn’t the likes of guys here jumping on the gravy train and making a killing out of it? You would be mad not too if it was true.
And why can’t the little one man band corner shop be undercutting the big chain store retailers by settling with only a 200% markup but still be on a winner?.

Simple answer - Markup doesn't equal profit.

If I buy 100 widgets for $100, and then sell them to you for $200, I've made $100 profit right?

NO!

I made a $100 contribution to my fixed costs, like rent, office equipment, wages, electricity, etc. Only once I've paid for all those underlying fixed costs do I start to make a profit.

[damian]

I've always avoided buying from harvey norman, this just gives me another reason not to go there.

As for amazon ebay are cheaper about 80% of the time for me.

Thank you for the comment on fast chinese shipping. Maybe it's just me that's had a poor run lately...

While I was looking into sharpening my chainsaw last week I priced new chains. $11.50. It's almost not worth sharpening the thing...

[Beardy]

Simple answer - Markup doesn't equal profit.

If I buy 100 widgets for $100, and then sell them to you for $200, I've made $100 profit right?

NO!

I made a $100 contribution to my fixed costs, like rent, office equipment, wages, electricity, etc. Only once I've paid for all those underlying fixed costs do I start to make a profit.

Yes I understand that, my post was full of sarcasm in reply to those that think we are getting ripped off when comparing prices from two different economies

[Enfield Guy]

Just to interject briefly. I think some are a little confused with regard to GST. The vendor merely collects and remits. The consumer/ user is the one who pays.

The legalities and protocols of collection of Australian Taxes by overseas entities seems to have been resolved between those entities. Whether or not it actually happens is someone elses issue, whilst I have a report that indicates GST has been withheld from my sales then I'm a happy camper.

Who gives a toss really? I'm happy to pay my share, my customer pays, I don't. I merely collect and remit if need be.

Cheers
Chill

[woodPixel]

Does anyone honestly think that a French company or one in Sudan is going to remit their collected GST?

I suspect every overseas company will gleefully collect the extra 10%, but it will be extra effort-free profit that will go straight into their pockets.

We are schmucks.

[bueller]

I have no problem paying GST on imports, problem is retailers will just put it in the too hard pile and refuse to ship here. Considering Amazon refused to play ball I can’t imagine too many smaller businesses will be willing to put in the effort. Pretty annoying, a lot of the stuff I buy from overseas isn’t even available locally. Guess I’ll have to start dealing with more drop shippers

[ian]

I have no problem paying GST on imports,

agree.

problem is retailers will just put it in the too hard pile and refuse to ship here. Considering Amazon refused to play ball I can’t imagine too many smaller businesses will be willing to put in the effort.

that for me is the issue. Restriction of choice.

The limit for compliance is supposed to be sales over $75000 per year INTO Australia. Hopefully many smaller OS retailers will be below that limit.

I think that Amazon is taking a "principled" stance. Chop Australian customers off at the knees in the hope that we will pressure the Government to do a rethink. (Watch to see if it's an issue at the next Federal election). If what I think is Amazon's strategy is successful, then this policy will be short lived.
Amazon after all doesn't want to be the world's tax collector

Pretty annoying, a lot of the stuff I buy from overseas isn’t even available locally. Guess I’ll have to start dealing with more drop shippers

just remember to write to your local MP every time you can't purchase what you need.