The Overseas Purchasing Debate

Questions about purchasing bicycles and parts

Re: The Overseas Purchasing Debate

Postby jacks1071 » Thu Oct 25, 2012 3:27 pm

usernameforme wrote:
jacks1071 wrote:When an Aussie company matches and overseas price, they do it at the expense of their profit margin.

so why can my LBS, who I have been shopping at for 2 years, is always within 10% to overseas prices? When they are over a 10%, its generally because the product is CHEAPER than what it is online (Shimano equipment excepted), still be running?


Simple, your LBS is working on a SMALLER margin than the overseas company. Why are they still running? You'd have to ask them that question.
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Re: The Overseas Purchasing Debate

Postby im_no_pro » Thu Oct 25, 2012 3:28 pm

rkelsen wrote:This discussion comes up all too often. It always goes nowhere. The last one ended up with insults flying left and right.



Very true. Fair warning that if this degenerates the way other threads on this topic have then it will be locked without so much as a second thought. Thanks to everyone for participating civilly so far lets keep it that way please.
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Re: The Overseas Purchasing Debate

Postby jacks1071 » Thu Oct 25, 2012 3:34 pm

jimboss wrote:Hey Jack,

Are most of those fees due to your use of a container? And port to port shipping obviously.

When I've imported stuff (albeit in smaller quantities than you would) I've pretty much run into duties, GST, brokerage fees and that's about it.

I expect those costs would be quite considerable in absolute terms, but do they work out to be a fairly small cost (10-20%) when costed against an entire shipment's wholesale/retail worth?


I get stung one extra AQUIS fee. I'm not 100% what its for but because they class Mackay as a rural area due to cattle production I think they do an external steam clean on the container.

The port we use is Brisbane.

I'd guess your shipping agent just hasn't bothered to break all the fees down for you or perhaps with LCL freight the fees could be built into the price? I havn't had LCL freight for a long time..
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Re: The Overseas Purchasing Debate

Postby ThePhil » Thu Oct 25, 2012 4:44 pm

Superb civility us punters are way more polite than our elected officials, I only ever made the vid as my version of community service, it feels like the Gov't is happy to let consumers and retailers fight it out, while they do nothing.

This Government does do some things amazingly fast, they moved on the live sheep trade and the big fishing boat amazingly fast, seems a few twitter feeds and there anybodies.

Feel free to sigh the petition:-

http://www.change.org/en-AU/petitions/f ... ying-field
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Re: The Overseas Purchasing Debate

Postby jacks1071 » Thu Oct 25, 2012 5:38 pm

jimboss wrote:I expect those costs would be quite considerable in absolute terms, but do they work out to be a fairly small cost (10-20%) when costed against an entire shipment's wholesale/retail worth?


I work on 20% for a normal shipment of bikes, frames, wheels etc. Sometimes it comes in less but thats a safe number to work on for items that arn't too bulky.

I've got a new shipment of Bike Cases on the water at the moment - they are bulky. Only 90 odd cases in a 20FT container. The freight cost for that shipment will be around 50% of the cost of the cases. Once the domestic freight to send them out to the customer is added the price will be roughly double my purchase price, then I need to add a modest margin so I can feed and educate my kids, pay my staff etc :-)
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Re: The Overseas Purchasing Debate

Postby boss » Thu Oct 25, 2012 5:44 pm

I have one last retort I forgot to include. Couldn't help myself.

The customs duties and charges you whinge about exist all over the world. The UK has particularly nasty duties which include VAT (20%) and duties that can be from 0 to 96% depending on product.

They apply these tariffs after parcel value is GBP30.

I've said it earlier and ill say it again. The government taxes are small fish, removing them will not help and possibly encourage us to shop abroad on larger purchases.

The issue is distribution. The government can't fix that.

For some reason I think you won't ever get it and will cling to your IPDC 49% tax that doesn't exist.

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Re: The Overseas Purchasing Debate

Postby ThePhil » Thu Oct 25, 2012 11:11 pm

I'm not clinging to anything, I could not work out all the crap reasons I keep seeing in the news, so I read the customs website, there's no right or wrong thats just what the law says. It's not a theory.

The customs duties and charges you whinge about exist all over the world.

Yes they do except for items imported to individuals under $1,000 into Australia.

The Brits kick their VAT and Duties in at 30 quid to make a level playing field for their retailers, our Government says this can't be done.

The taxes are huge fish and the costs of complying to all that crap would be considerable too, I would imagine.

The IDPC is not a percentage, its $49 for the Import Declaration Processing Charge, it's Australian Customs Notice 2006/21, how can it not exist? But as I conceded straight away with your example, if you were to spread this over say 100 items it would of course become a small percentage of the final cost. What happens when you are trying to fill a container with different products with different duties, do you have to do multiple Import dec forms? then is there multiple IDPC's?

Distribution is a totally different conversation, I never set out to talk about any of that, just the Government taxes and charges.
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Re: The Overseas Purchasing Debate

Postby AUbicycles » Thu Oct 25, 2012 11:29 pm

A survey in the forum some time back with over 100 participants showed that an additional 10% GST on OS purchases products wouldn't deter them from buying overseas.

In The Ultimate Guide: Shopping for bicycles and cycling gear online (free PDF download) the survey participants were asked how much extra they would be prepared to pay to buy it locally, and it was up to 15%.

I understand that importers have a lot of overheads to deal with, it is a different business landscape where 10 years ago only very few customers were able to / likely to purchase overseas - so it means a shake-up and rethink. Some businesses are quite proactive, and new businesses are starting to popup where they see that they can do things differently.

The feasability of lowering the GST threshhold is in discussion and assuming that it was lowered, it is only one part of the equation. Another massive part are shops and customer service. Sure you don't walk into a shop wanting to pay for customer service, but you are out the door quickly when there isn't customer service.
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Re: The Overseas Purchasing Debate

Postby Stuey » Fri Oct 26, 2012 12:14 am

ThePhil wrote:....it feels like the Gov't is happy to let consumers and retailers fight it out, while they do nothing.


Well, not nothing. It was looked at.

If you read this it was looked into for the under $1,000 imports and from what I speed-read, it's all too hard. It'd cost more than the revenue returned to the Gov't to administer taxes and duty on these imports. The $1,000 threshold appears to provide a good balance between revenue collected and cost of administration. I didn't read enough of the (quite lengthy) report to find what was said about the effect on Australian businesses.
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Re: The Overseas Purchasing Debate

Postby ThePhil » Fri Oct 26, 2012 1:12 am

Another massive part are shops and customer service.

A shop being able to give you what you want is the greatest service of all, you walk into a shop, they are out of stock, instead of the shopkeeper knowing they can just get it for you, add on postage and something for their trouble, they know that it's; wholesale, plus duty, plus post, plus $49 IDPC, then something for their trouble, then GST that they have to collect off you and give to the Government. And to the customer it just looks like they are being taken to the cleaners and sets up a totally bad vibe, it's not good for anybody, except for the overseas retailer.

I understand that importers have a lot of overheads to deal with, it is a different business landscape where 10 years ago only very few customers were able to / likely to purchase overseas - so it means a shake-up and rethink. Some businesses are quite proactive, and new businesses are starting to popup where they see that they can do things differently.

The Gov't has to get their bit in order first, there's no point hobbling the local retailers if there is no great advantage.
If you think it through to the end, the most efficient business under these rules is to have an overseas store, sell into Australia, then have an arrangement with a network of repair shops to do the service and warranties, maybe even have a showroom and demo's, but do the sales offshore. That way not only do you avoid all of the duties, gst etc, but also any Oz company tax, just a few wages down under that is it. It's nuts. We should be the ones doing that, not having it done to us.

With the cost to much thing (I haven't read that document it's quite amazing, kinda beyond me) to collect the tax. Twaddle, all the infrastructure is in place (it's done for over $1,000), you just lower the threshold, put in a few more resources to catch a very small percentage of offenders and trust that the majority of people do the right thing. It's how we police every other aspect of the society, income tax is self assessment and just a very few get audited, you only get caught about 1 in a 1000 times speeding, there's no effort to police everytime you speed. What does the report say that they are going to log and check every parcel?

If you think about being proactive, the whole of Australia does some sport or another, so your better off talking about it and using people power to make it an election issue, look what people achieved with banning live exports and the Supertrawler, took them 1 week. The worst scenario would be if the gov't only lowered the threshold, that would be pretty crap for the consumer.
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Re: The Overseas Purchasing Debate

Postby boss » Fri Oct 26, 2012 5:42 am

ThePhil wrote: plus $49 IDPC


Take your hand off it man. This charge does not exist for goods imported under $1000. Does. Not. Exist. Let go of it.
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Re: The Overseas Purchasing Debate

Postby boss » Fri Oct 26, 2012 5:44 am

jacks1071 wrote:
jimboss wrote:I expect those costs would be quite considerable in absolute terms, but do they work out to be a fairly small cost (10-20%) when costed against an entire shipment's wholesale/retail worth?


I work on 20% for a normal shipment of bikes, frames, wheels etc. Sometimes it comes in less but thats a safe number to work on for items that arn't too bulky.

I've got a new shipment of Bike Cases on the water at the moment - they are bulky. Only 90 odd cases in a 20FT container. The freight cost for that shipment will be around 50% of the cost of the cases. Once the domestic freight to send them out to the customer is added the price will be roughly double my purchase price, then I need to add a modest margin so I can feed and educate my kids, pay my staff etc :-)


Missed this. 20% for shipping + tax sounds about right to me.
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Re: The Overseas Purchasing Debate

Postby rkelsen » Fri Oct 26, 2012 2:08 pm

ThePhil wrote:(I haven't read that document it's quite amazing, kinda beyond me)

Yet you see fit to comment on it?

:roll:
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Re: The Overseas Purchasing Debate

Postby MarkG » Fri Oct 26, 2012 4:15 pm

Regardless of price - Aus Post still sux majorly in most my overseas purchases.

Ordered some Bont Vaypor from Merlin on Friday, they were dispatched 6 hours later and by last Saturday were already in Australia.
6 days later, still nothing. So they can travel half way round the world in 24 hours, but it's too much to ask for them to arrive to my office in less than a week.
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Re: The Overseas Purchasing Debate

Postby ThePhil » Fri Oct 26, 2012 4:26 pm

ThePhil wrote:
plus $49 IDPC
Take your hand off it man. This charge does not exist for goods imported under $1000. Does. Not. Exist. Let go of it.

My previous reply:-

Yes they do, that's the point of the video, if you check out the legislation, it says OK as a one off i.e. as an individual, but if you do it all the time, you will not get the $1,000 threshold, here it is straight from the Customs website:-
Multiple Packages
Consignor is the person or organisation overseas that sends goods (the sender).
Consignee is the person or organisation in Australia that receives the goods (the receiver).
If multiple packages arrive in Australia to the same consignee sent from a single consignor overseas, the value of all packages may be combined for duty and tax assessment purposes (refer to Example 1).
And that's what a shop does, gets packages in all the time for customers.
As a thought I'd like to be wrong about this, if there is another bit of legislation that trumps this one let me know.


So if maybe someone other than us two can comment on this one, I can't see how you can read it any other way; than that for shops they will keep tabs and just add up multiple deliveries. But I would like to be proven wrong, not told I am wrong.
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Re: The Overseas Purchasing Debate

Postby ThePhil » Fri Oct 26, 2012 4:32 pm

ThePhil wrote:
(I haven't read that document it's quite amazing, kinda beyond me)

Yet you see fit to comment on it?

Well it was presented as an answer to a question, but I have to admit it's so big and convoluted I could not face it. To me things like that are like reading the bible and I get confused. I did try though.
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Re: The Overseas Purchasing Debate

Postby boss » Fri Oct 26, 2012 4:39 pm

ThePhil wrote:
Yes they do, that's the point of the video, if you check out the legislation, it says OK as a one off i.e. as an individual, but if you do it all the time, you will not get the $1,000 threshold, here it is straight from the Customs website:-
Multiple Packages
Consignor is the person or organisation overseas that sends goods (the sender).
Consignee is the person or organisation in Australia that receives the goods (the receiver).
If multiple packages arrive in Australia to the same consignee sent from a single consignor overseas, the value of all packages may be combined for duty and tax assessment purposes (refer to Example 1).
And that's what a shop does, gets packages in all the time for customers.
As a thought I'd like to be wrong about this, if there is another bit of legislation that trumps this one let me know.


So if maybe someone other than us two can comment on this one, I can't see how you can read it any other way; than that for shops they will keep tabs and just add up multiple deliveries. But I would like to be proven wrong, not told I am wrong.


I run a small business (a brand) that receives many orders from suppliers for under $1000 over the course of a year. Between 30-40. Never been charged customs unless I go over $1000.

That's my experience, I'm telling you that you are wrong, I can prove you are wrong. I suspect anyone on here that has similar experience in business at the scale I work at, will also tell you that you're wrong.

Heck, I bet there are dudes on here that have ordered $2000-3000 worth of stuff over 1-2 months in small orders and never been pinged by customs for separate shipments.

Even if I am wrong (which I am not), your whole IPDC argument relies on a business ordering goods one at a time from an overseas supplier. You would soon go broke if you ran your business this way. I guarentee that any business owner worth his or her salt would optimize their orders such to maximize the number of goods per shipment to save on shipping costs, and flat-rate charges if they apply. I would also argue that most business owners would attempt to optimize their orders to stay under $1000 if they are working at the small end of the market.

Your whole argument on IPDC flies in the face of reality and intuitive business sense. You keep bringing up this mythical business that orders small items one at a time while still incurring charges that only apply to orders over $1000.

If you are a mythical business that orders $100 items one at a time, you have bigger things to worry about than IPDC. That worry would be ridiculous shipping costs.
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Re: The Overseas Purchasing Debate

Postby }SkOrPn--7 » Fri Oct 26, 2012 5:37 pm

jimboss wrote:
Heck, I bet there are dudes on here that have ordered $2000-3000 worth of stuff over 1-2 months in small orders and never been pinged by customs for separate shipments.


I'm one of the dudes you speak off I ordered 3500 bucks worth of wheels in one order and never got pinged and in the same month ordered 2000 worth of RC gear and never got pinged. My next order of RC gear worth 1500 in that same month got stopped and had to pay taxes etc so it's hit and miss if stuff gets through or it gets stopped. Most times on my orders I leave 4 days between orders if under the 1000 clam limit and they all fly through straight to my door step so yes leaving a small gap and you can order till your hearts content keeping it under the 1000 threshold.
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Re: The Overseas Purchasing Debate

Postby elantra » Sat Oct 27, 2012 12:14 am

ThePhil wrote:There's no reason why the Aussie shops should not be as cheap as the overseas guys. Check out the video, shows how the Gov't is letting down Australian cycling.

http://www.youtube.com/watch?v=gASv-zrnMy8

Thanks for sharing this issue.
Don't hold your breath waiting for Canberra to create a level playing field.
Government does what is politically expedient, not what is just or fair or sensible.

The interim report of the Low Value Parcel Processing Taskforce is interesting reading.
All sorts of wisecracks about Committee outcomes and government sponsored report outcomes spring to mind.
I hav worked in a government sector, and i feel sorry for you, because i know how appalling and unfair government systems can be.
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Re: The Overseas Purchasing Debate

Postby Stuey » Sat Oct 27, 2012 6:45 pm

ThePhil wrote:With the cost to much thing (I haven't read that document it's quite amazing, kinda beyond me) to collect the tax. Twaddle, all the infrastructure is in place (it's done for over $1,000), you just lower the threshold, put in a few more resources to catch a very small percentage of offenders and trust that the majority of people do the right thing. It's how we police every other aspect of the society, income tax is self assessment and just a very few get audited, you only get caught about 1 in a 1000 times speeding, there's no effort to police everytime you speed. What does the report say that they are going to log and check every parcel?


The report is very detailed on this issue, because clearly this is one of the primary considerations of the review - whether to reduce the threshold or abolish it, and the costs and effects in doing so. It's not as simple as you suggest and according to the report would cost, as I say from memory, more than the revenue collected.
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Re: The Overseas Purchasing Debate

Postby rkelsen » Sun Oct 28, 2012 8:43 am

Stuey wrote:The report is very detailed on this issue, because clearly this is one of the primary considerations of the review - whether to reduce the threshold or abolish it, and the costs and effects in doing so. It's not as simple as you suggest and according to the report would cost, as I say from memory, more than the revenue collected.

Meh. It's easier to blame the gummint.
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Re: The Overseas Purchasing Debate

Postby Aushiker » Sun Oct 28, 2012 10:46 am

jimboss wrote:So what you really should be doing is campaigning for the government to move closer to the rest of the world, and get more people over here while we are at it. I'm sure they will be keen to help us push Australia closer to Europe so we can all enjoy cheaper bike parts.


Time to bring the Kiwis in to make it a bigger market. I actually often buy camping gear from there as it is much cheaper than Australia. Smaller market, smarter business model I guess :)

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Re: The Overseas Purchasing Debate

Postby ThePhil » Mon Oct 29, 2012 8:22 am

I'm one of the dudes you speak off I ordered 3500 bucks worth of wheels in one order and never got pinged and in the same month ordered 2000 worth of RC gear and never got pinged. My next order of RC gear worth 1500 in that same month got stopped and had to pay taxes etc so it's hit and miss if stuff gets through or it gets stopped. Most times on my orders I leave 4 days between orders if under the 1000 clam limit and they all fly through straight to my door step so yes leaving a small gap and you can order till your hearts content keeping it under the 1000 threshold.


So when they do ping you, do they just hit you up for the normal charges? or do they give you a fine for not having declared it? (the value)
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Re: The Overseas Purchasing Debate

Postby takai » Mon Oct 29, 2012 8:37 am

ThePhil wrote:
I'm one of the dudes you speak off I ordered 3500 bucks worth of wheels in one order and never got pinged and in the same month ordered 2000 worth of RC gear and never got pinged. My next order of RC gear worth 1500 in that same month got stopped and had to pay taxes etc so it's hit and miss if stuff gets through or it gets stopped. Most times on my orders I leave 4 days between orders if under the 1000 clam limit and they all fly through straight to my door step so yes leaving a small gap and you can order till your hearts content keeping it under the 1000 threshold.


So when they do ping you, do they just hit you up for the normal charges? or do they give you a fine for not having declared it? (the value)


Just normal charges. Heck I've quite commonly had 2-3k parcels, clearly labeled as such, pass customs no issues at all. No charges, thy just overlooked it.
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Re: The Overseas Purchasing Debate

Postby boss » Mon Oct 29, 2012 9:16 am

ThePhil wrote:
I'm one of the dudes you speak off I ordered 3500 bucks worth of wheels in one order and never got pinged and in the same month ordered 2000 worth of RC gear and never got pinged. My next order of RC gear worth 1500 in that same month got stopped and had to pay taxes etc so it's hit and miss if stuff gets through or it gets stopped. Most times on my orders I leave 4 days between orders if under the 1000 clam limit and they all fly through straight to my door step so yes leaving a small gap and you can order till your hearts content keeping it under the 1000 threshold.


So when they do ping you, do they just hit you up for the normal charges? or do they give you a fine for not having declared it? (the value)


They can't fine you for not declaring something as it is the sender that must declare the value of goods.

As a recipient you have no control over the senders declaration.

If you are receiving goods over $1000 and this value is correctly declared, sometimes you have to pay a charge, sometimes you don't. Sometimes you pay the bill to your shipping company (Toll, DHL, etc), sometimes it is to a shipping agent. I've never paid directly to the feds but I suppose that might happen if you file your own paperwork. I don't know.

Around 60-70% of the time when I am receiving a shipment declared at over $1000, it gets picked up through customs and appropriately taxed. I have had stuff come through and get missed, but such occasions seem to be rare in the scheme of things.

I find it really surprising that you come in all guns blazing complaining about government taxes but don't know the actual implications of customs when purchasing goods from overseas, whether it be commercially or even just a few overseas online store purchases here and there. I suppose on one hand it is better than hearing from a stakeholder in the process (i.e. Gerry Harvey) but on the other hand, very naive.
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