16% compared to zero is a fair bit, but I thought about that when making the video, maybe something like 25% would be better (like buy 10 items at once) but then I would have had to explain that as well and it's a hard one to get across. Also I could have made the product more expensive like $1,000 which makes the $49 proportionately less, but you know, have to start somewhere, the reality is the same, why lump it on one bunch of retailers and not another. Even 1% is a lot in some markets.
The ease of warranty is or soon will be the same, a big company like Chain Reaction
could/will just employ a local 'warranty agent' and pay them a wage or do a deal with a local shop. If I was say China car co. I'd just do a deal with Auto Masters and NRMA, hey presto, national service network, 24 hour assistance.
I regularly purchase items locally when they are 10-20% more expensive, and I suspect many around here do too. Why? Convenience, ease of warrantee issues, and the simple fact that you can have it right... now.
On stuff that is to small to bother comparing you may well be paying a lot more than 10-20% whenever I have been on an overseas holiday it feels like about 100%.
For starters, it's unlikely that local shops are dealing with overseas suppliers, more likely they are dealing with local distributors. Local distributors would definitely be ordering the quantities to avoid the IPDC skewing prices.
Local distributors/importers are a whole level of extra cost that is getting wiped out as all industries become more efficient, it's more common nowdays to just have an 'agent' who helps the shops with consolidating orders direct to the factory.
But let's ignore that piece of trivia and assume we are talking a small shop that, for whatever reason, imports directly from overseas and does not use a local distributor to source their product.
If their order is under $1000, they don't pay IPDC.
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:-
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.
If their order is over $1000, they pay IPDC on the entire shipment. For an order of value $1000, it is effectively a 4.9% tax. As the order value increases, the effective tax rate decreases.
At this point the duty, IPDC, and gst kick in for the o/s guy, so at this stage it is all equal, but still a bit of a rip for the consumer and I pity the poor customs agents trying to figure if something is genuinely under $1,000, what does he do? open the packet, then try and work out what it is?
Supply chain etc it is separate to a discussion on govt taxes and charges, may as well talk about sexism.
But if the overseas guys know that the Aussie guys have all these extra charges, then like Adobe he sells just under the Aussie shops price and pockets the difference, ends up looking like the Aussie guy cannot negotiate a good price, but really the overseas manufacturer/retailer has a vested interest in competing with a hobbled competitor, and 16-69% is really a lot. So you are paying more, just Australia does not get the revenue.