The Overseas Purchasing Debate

Questions about purchasing bicycles and parts

Re: The Overseas Purchasing Debate

Postby il padrone » Sat Dec 22, 2012 11:56 am

jimboss wrote:
ThePhil wrote:But lobbying the Government for a level playing field regarding just taxes and charges can only be a good thing, most people don't know the hidden charges, how could they?
Overseas guys Wholesale $100 then say 33% mark up, $133.
Aussie guy $100 then 5% Duty, $105, then IPDC $49, $154, 33% mark up, $205, then gst, $225.


I knew there was something fishy about that video. A taxes equating to 54% + GST just didn't gel with what I've experienced myself commercially importing goods.

IPDC. Import Processing Declaration Charge.

Cost - between $9 and $70. Per shipment imported. Not per item.

The Aussie Guy that you refer to surely would not be importing his stock one piece at a time. Surely.

Therefore, you are not talking a whopping 49% tax (using the $49 called out in previous calcs) on a $100 item. If the importer is importing 100 items, it costs them... what... 49 cents to process that item. 1000 items - and now we are talking commercial quantities - 4.9 cents.

So the real figures are something more like $100 + $5 duty = $105, $105 + IPDC $0.49 = 105.49, 105.49 + 33% mark-up = $140, $140 + 10% GST = $154. Far cry from $225, and not that far off $133... and not that bad when you include the fact you're going to get local warrantee, etc.

So, just to re-iterate. We are talking $133 for an overseas supplier, $154 for an Australian supplier. $21. Taaahhhhh-wenty-one dollars.

Plus the Overseas guy has generally got a VAT (in Europe at least), so:

Overseas guys Wholesale $100 then say 33% mark up, $133, then VAT (20%) $159

Retail in Australia is looking pretty favourable - should be $5 cheaper. Why can't they make it work??
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by BNA » Sat Dec 22, 2012 12:27 pm

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Re: The Overseas Purchasing Debate

Postby boss » Sat Dec 22, 2012 12:27 pm

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Re: The Overseas Purchasing Debate

Postby MarkG » Sat Dec 22, 2012 12:57 pm

jimboss wrote:Image


Classic episode that one.
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Re: The Overseas Purchasing Debate

Postby Ross » Sat Dec 22, 2012 1:22 pm

Jimboss - go easy buddy, play the ball not the man.

Is there duty as well as VAT in UK?

Originally our govt said they were going to abolish other taxes such as duty when they implemented GST, but of course they didn't, just another broken promise/lie. :x
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Re: The Overseas Purchasing Debate

Postby boss » Sat Dec 22, 2012 1:51 pm

This guy rehashes the same old dribble without considering the facts. He's all over the place, he hasnt even said if he wants taxes/duties/gst dropped altogether, or threshold abolished. Call a spade a spade. He's an idiot.
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Re: The Overseas Purchasing Debate

Postby ThePhil » Sat Dec 22, 2012 2:27 pm

No I'm not your are. :mrgreen:

The old style super 100-200-300% more expensive than overseas is a traditional/hangover thing, it's when a big brand (or importer) could control the whole Australian market, and an overseas shop could not advertise effectively in Australia. I suppose they were not able bo do that in say the UK and US, so they have always been cheaper.

Now that has been blown out of the water and exposed for what a rip it was, (just in the last few years). So the Aust guy has to really finally compete on the world stage with much lower margins, around the 20% mark instead of more like 60%, (and it was only really like 60% as the Brands that wrapped up the market were the ones really making the serious margins), maybe a few importers too if they were really well set up.

So by now penalising the Oz shops 20% it's a really big deal, that's why they have not gotten competitive, their know they can't compete, instead moving backwards into repairs and or closing up. It's a shame to lose them and as much as you might be annoyed the Brands (admittedly with retailers as part of the system), gouged you your whole life, it's the local shop owner who is actually losing his life's work and superannuation. The brands are just as happy as ever, and more than happy to ship direct to you cutting out the Oz retailer and tax/duties system, they may well own some of these large online shops just to muddy the waters a bit.

A spade is a long handled digging device, I don't give a rats whether they drop gst, abolish threshold, whatever, I just want a level playing field, they should at least do some work for themselves! Logically though if you are going to have a consumption based tax then you would just lower the threshold, like all the other countries in the world.

Seems you have a real interest in supporting the overseas shops?
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Re: The Overseas Purchasing Debate

Postby biker jk » Sat Dec 22, 2012 2:39 pm

jimboss wrote:This guy rehashes the same old dribble without considering the facts. He's all over the place, he hasnt even said if he wants taxes/duties/gst dropped altogether, or threshold abolished. Call a spade a spade. He's an idiot.


+1. I've never heard so much repeated rubbish in my life. He needs to read a microeconomics textbook. The internet has already lead to a level playing field via it's role in promoting price discovery. He just wants a return to protectionism in Australia and we know how that screwed consumers.
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Re: The Overseas Purchasing Debate

Postby ThePhil » Sat Dec 22, 2012 3:35 pm

The racket is over thank God, nobody happier than I about that, thanks to price discovery (nice term).

But if the Aussie guys had a level playing field years ago then they would have set up in opposition to wiggle etc, or wiggle or someone would have put an outlet in Australia. When they level the playing field that's what will eventually happen, a number of big Aussie shops will get together and do it, would have happened years ago with the right policy.

How is anything I have said promoting a return to protectionism? At the moment you are advocating protectionism for overseas shops.

Think about who would have really pulled the strings in setting Australia wide prices, would Shimano really have said, hey we sell this for $10 but we will let an aussie importer make $50 on it, no they controlled it they set it at $35 and gave $15 to the shop. Look who has the power.

Now the shopper has the power thank God, but the Aussie retailer (and his customers) is still being taxed higher than the overseas guy. Just level it, will make it easier to see who is really ripping us off. Then your much hated local shop will have nowhere to hide will he?

Say no to protectionism!
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Re: The Overseas Purchasing Debate

Postby boss » Sat Dec 22, 2012 3:55 pm

ThePhil wrote:No I'm not your are. :mrgreen:


I'm not an idiot and quite comfortable with that. Many on here may not agree with my opinions - not just about overseas shopping, but many other issues - but I do not think anyone here would accuse me of being lazy in thinking, nor of talking about things I do not understand.

I am accusing you of being lazy in thought, I am accusing you of talking about matters you do not understand.

Even worse, I accuse you of campaigning for change on issues that you have very little knowledge of, other than reading of newspapers, a cursory glance at the customs website, and perhaps banter with a shopkeeper.

Now that we are done here, back to my beer.
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Re: The Overseas Purchasing Debate

Postby il padrone » Sat Dec 22, 2012 4:28 pm

ThePhil wrote:But if the Aussie guys had a level playing field years ago then they would have set up in opposition to wiggle etc, or wiggle or someone would have put an outlet in Australia.

Cellbikes - I'm sure there are others

http://www.wiggle.com.au/ - looks like they're already heading that way.

Mainpeak seem to do pretty competitive on-line service in outdoor gear


ThePhil wrote:Think about who would have really pulled the strings in setting Australia wide prices, would Shimano really have said, hey we sell this for $10 but we will let an aussie importer make $50 on it, no they controlled it they set it at $35 and gave $15 to the shop. Look who has the power.

How is this any different to the actions of any manufacturer or distributor? They set their prices..... BUT it is up to the retailer what they sell it for (resale price maintenance is illegal in Australia).
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Re: The Overseas Purchasing Debate

Postby ThePhil » Sat Dec 22, 2012 5:00 pm

jimboss wrote:I am accusing you of being lazy in thought, I am accusing you of talking about matters you do not understand.

I accuse you of the same.
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Re: The Overseas Purchasing Debate

Postby ThePhil » Sat Dec 22, 2012 5:08 pm

il padrone wrote:How is this any different to the actions of any manufacturer or distributor? They set their prices..... BUT it is up to the retailer what they sell it for (resale price maintenance is illegal in Australia).

It is the same as any manufacturer, just they were able to target Australia quite well and I don't really know how they were able to get away with it for so high and so long, whereas they didn't seem to be able to do that in the US & UK.
It's sort of up to the retailer, but he has to compete with all the other shops, then it gets to a point where its not worth going any lower as you are close to the cost price.

But now...it really is getting close to the cost price and having an extra duty and tax burden compared to o/s makes it not feasible.
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Re: The Overseas Purchasing Debate

Postby boss » Sat Dec 22, 2012 5:50 pm

ThePhil wrote:
jimboss wrote:I am accusing you of being lazy in thought, I am accusing you of talking about matters you do not understand.

I accuse you of the same.


Now you're just being a wonderful person.
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Re: The Overseas Purchasing Debate

Postby drpants » Sat Dec 22, 2012 11:22 pm

This is silly guys. I'm come from a retail background (although electronics, but a lot of the same things still apply) and the main reason for higher prices are simple...

1. Cost of doing business and/or
2. Greedy distributors

If a retailer is doing things "the right way" they'd be buying from the official distributor of said products, save for unknown or very small brands.
It costs money to run a distribution company, of which the costs will have to be passed on to the retailer.
Some costs include: warehousing, transport, sales reps, accounts, etc.

Now some distributors are quite greedy and charge much more than what we would consider fair. Let's say a product is worth $100 ex GST in the US and their buy price is $50.
They would take pass it on at $80 and have to mark up the price by say $30 to give the retailer a reasonable 30% margin. Note that the distributor makes more % margin.

And let's stop using the word "markup" on retailers, they rarely have a say on the matter. They're concerned with margins and trying to preserve as much of it as possible.
I know for a fact that Aussie retailers often make less than those in Malaysia, Singapore etc on the same product.

In my field I try to compete on service whilst giving customers a reasonable price. Unfortunately this means I can't match overseas prices but we can usually manage to get within 20% or so by negotiation with distributors as well as cutting a bit of our margin.

Let's not forget that we get paid a hell of a lot more for doing the same jobs as people in the US etc. get paid. Does it make it unfair that we have to pay a tad more for our goods?
If you have a reasonably good LBS that's willing to help you out I'd highly suggest making good relations and negotiating with them, otherwise they'll be gone very quickly.
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Re: The Overseas Purchasing Debate

Postby DavidS » Sat Dec 22, 2012 11:39 pm

drpants wrote:Let's not forget that we get paid a hell of a lot more for doing the same jobs as people in the US etc. get paid. Does it make it unfair that we have to pay a tad more for our goods?
If you have a reasonably good LBS that's willing to help you out I'd highly suggest making good relations and negotiating with them, otherwise they'll be gone very quickly.


I tend to agree although I would pick up on the point about wages, yes ours, along with most of the developed world, are higher than the USA. The USA is a bit of a special case in that they are able to pay very low wages, the situation is not the same for most developed countries and not the same in the mainly UK based online bike shops.

That said, I will support local shops when their prices are within 20% of online, I'll generally go a bit further than 20% because I support our retail employees being paid a living wage. Where I draw the line is when the price is sometimes double the online price and when I can't find or the shops don't stock what I want.

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Re: The Overseas Purchasing Debate

Postby Ross » Sun Dec 23, 2012 5:00 am

I think larger retailers such as Harvey Norman and probably Cell Bikes and Cycling Express bypass distributors/wholesalers and import directly from manufacturers or o/s wholesalers, whereas the smaller retailers just buy through local distributors/wholesalers because they don't know any better or are too lazy to shop around.

With these days of global shopping and the internet I don't understand why some manufacturers restrict the warranty to country of purchase even though exactly the same product (originally made in China) is sold all over the world. I bought a bike frame from USA and it developed a crack but the local agent washed their hands of responsibility saying it wasn't purchased in Australia. So what? The frame is cracked, it is faulty. It's the same frame that they sell in Australia, came off the same production line and the same factory and has the same specs and same carbon. But it was sold in USA not Australia.
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Re: The Overseas Purchasing Debate

Postby jcjordan » Sun Dec 23, 2012 7:13 am

Ross wrote:I think larger retailers such as Harvey Norman and probably Cell Bikes and Cycling Express bypass distributors/wholesalers and import directly from manufacturers or o/s wholesalers, whereas the smaller retailers just buy through local distributors/wholesalers because they don't know any better or are too lazy to shop around.

With these days of global shopping and the internet I don't understand why some manufacturers restrict the warranty to country of purchase even though exactly the same product (originally made in China) is sold all over the world. I bought a bike frame from USA and it developed a crack but the local agent washed their hands of responsibility saying it wasn't purchased in Australia. So what? The frame is cracked, it is faulty. It's the same frame that they sell in Australia, came off the same production line and the same factory and has the same specs and same carbon. But it was sold in USA not Australia.

The local distributor is a separate company, with smelling exceptions like Trek, and therefore did not make any profit from the sale so have no responsibility for the warranty of the item.

This is another failure of the Australian market system. It may have made sence when air transport was rare and expensive but all it dies now is kill local businesses who rely in them to bring in goods.

Local distributors have to buy product, store it and then support the local industry.

The biggest problem is the amount of stock they need to hold. Say it's $500000 order. The distributor will generally only have 30 days to pay the bill so will either have to the cash or pay interest on a overdraft.

Plus as a separate company it needs to make a profit as well.
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Re: The Overseas Purchasing Debate

Postby ThePhil » Sun Dec 23, 2012 11:06 am

Ross wrote:I
With these days of global shopping and the internet I don't understand why some manufacturers restrict the warranty to country of purchase even though exactly the same product (originally made in China) is sold all over the world. I bought a bike frame from USA and it developed a crack but the local agent washed their hands of responsibility saying it wasn't purchased in Australia. So what? The frame is cracked, it is faulty. It's the same frame that they sell in Australia, came off the same production line and the same factory and has the same specs and same carbon. But it was sold in USA not Australia.


It's only 'cos you bought it from a different company in the states, the local guy will only have responsibility for what he sold, otherwise if he is too nice a guy everything bought all over the world will end up with him. Usually he has to show the manufacturer, photo's, sales invoices etc and an explanation of what happened, same as what you had to show him. Thing is that takes up his time and from his angle has been undercut by the US guy anyway. Usually though the US distributor or the brand themselves will pay the Aussie guy to do it. Still no reason why you can't send all the photo's etc back to the US guy, won't they just ship you another one?
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Re: The Overseas Purchasing Debate

Postby ThePhil » Sun Dec 23, 2012 11:08 am

jimboss wrote:Now you're just being a wonderful person.


You started the name calling.
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Re: The Overseas Purchasing Debate

Postby jacks1071 » Sun Dec 23, 2012 11:24 am

Ross wrote:I think larger retailers such as Harvey Norman and probably Cell Bikes and Cycling Express bypass distributors/wholesalers and import directly from manufacturers or o/s wholesalers, whereas the smaller retailers just buy through local distributors/wholesalers because they don't know any better or are too lazy to shop around.

With these days of global shopping and the internet I don't understand why some manufacturers restrict the warranty to country of purchase even though exactly the same product (originally made in China) is sold all over the world. I bought a bike frame from USA and it developed a crack but the local agent washed their hands of responsibility saying it wasn't purchased in Australia. So what? The frame is cracked, it is faulty. It's the same frame that they sell in Australia, came off the same production line and the same factory and has the same specs and same carbon. But it was sold in USA not Australia.


I don't think you understand what is involved in dealing directly with manufacturers. Quantities involved, lead times, forcasting etc. Manufacturers arn't like big bunnings style warehouses, they build stuff when ordered and often have lead times of several months.

You also don't seem to realise that most distributors are generally not owned by the manufacturer in China/Taiwan. As such, if you have grey imported their product - effectively bypassing the part of the supply chain that allows these people to make a margin and survive in business then expect them to give you the time of day when you need a warranty claim than that is really rude.

Why would you expect someone you've not bought a product from to work for you free of charge??
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Re: The Overseas Purchasing Debate

Postby Ross » Sun Dec 23, 2012 12:42 pm

jacks1071 wrote:
Why would you expect someone you've not bought a product from to work for you free of charge??


No, the manufacturer should reimburse any costs involved, it is their product that is faulty. No different I don't reckon than if I bought it locally. The LBS still potentially had costs, they shouldn't have to pay for them, the manufacturer should.

While I'm venting about warranty, what a cop-out by bike manufacturers to have the warranty only apply to the first owner. No other product I'm aware of has a warranty like this. Warranty should be x years regardless if it's the 1st or 31st owner.
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Re: The Overseas Purchasing Debate

Postby ThePhil » Sun Dec 23, 2012 12:55 pm

Ross wrote:
jacks1071 wrote:No, the manufacturer should reimburse any costs involved.

Yea they should, if they are going to let people sell inter-country, they should set up a warranty system. Won't they just freight you another one, so you don't have to deal with the Aussie importer?
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Re: The Overseas Purchasing Debate

Postby jcjordan » Sun Dec 23, 2012 1:04 pm

Ross wrote:
jacks1071 wrote:
Why would you expect someone you've not bought a product from to work for you free of charge??


No, the manufacturer should reimburse any costs involved, it is their product that is faulty. No different I don't reckon than if I bought it locally. The LBS still potentially had costs, they shouldn't have to pay for them, the manufacturer should.

While I'm venting about warranty, what a cop-out by bike manufacturers to have the warranty only apply to the first owner. No other product I'm aware of has a warranty like this. Warranty should be x years regardless if it's the 1st or 31st owner.

LBS would love if the manufacture/distributor should cover cost. The fact is the warranty only covers parts. If they replace a frame the shop wears the cost to remove and replace tgevbackv groupset and consumables
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Re: The Overseas Purchasing Debate

Postby ThePhil » Sun Dec 23, 2012 1:15 pm

jcjordan wrote:
Ross wrote:
jacks1071 wrote:LBS would love if the manufacture/distributor should cover cost. The fact is the warranty only covers parts. If they replace a frame the shop wears the cost to remove and replace tgevbackv groupset and consumables


So the end game of the current system is that manufacturers (or big overseas retailers) will do some warranty deals with local repairers (not necessarily shops). Basically they take over and the local industry makes do with whatever crumbs they can.

If the Govt would stop putting the locals at a disadvantage, they could at least compete evenly and retain a lot more of the market.
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Re: The Overseas Purchasing Debate

Postby jcjordan » Sun Dec 23, 2012 1:51 pm

ThePhil wrote:
If the Govt would stop putting the locals at a disadvantage, they could at least compete evenly and retain a lot more of the market.


It has nothing to do with the government it is a business arrangement.

Some importers, like trek, do actually cover these cost even though they don't have to.

The biggest problem we have with LBS is the middle layer of distributor. Look at Trek for a model. They drop the distributor and went to a local company representation for marketing and warranty. They now charge less for there products and have a higher profit.
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