The Overseas Purchasing Debate

[biker jk]

Makes me wonder we're they are getting their stock from.

As of 2 months ago shimano Australia whole sale prime on a DA chain was $58

If I owned a business which depended upon dealing with Shimano Australia, I'd call around and gather support from other shop owners in a similar situation.

Then, once I have the support of as many fellow shop owners as I can find, I'd organise a meeting with Shimano Australia to try and hammer out a better deal. You have a [virtual] bottomless pit of evidence when it comes to significantly lower prices for the same product.

You have to be prepared to threaten to walk out en-masse. If the current situation is allowed to continue, everyone will lose. Shop owners, customers and Shimano. Everyone.

You can change things. Don't just sit around crying about it.

Indeed this is what happened in the US where the LBSs complained that their market share for Shimano products had collapsed due to cheaper overseas prices and Shimano US agreed to lower wholesale prices. The same needs to happen in Australia. Getting rid of the $1000 exemption for GST won't save the LBS.

[Metor]

I have read most of the topic and noticed that it is a sensitive subject.
Something which is not clear (yet) to me and hopefully someone can answer it here. What are the hidden costs if I would order (let's say) 4x Conti 4000s?
Most of the time I got them for $30 in Europe and a web shop that I used a lot will sent for $20 to AU. Simply meaning $35 for each tire. I notice that even with shipping costs I can save a lot of money. But I don't believe it is that easy. So when will costumes come and bring me a unpleasant bill?

[KenGS]

So when will costumes come and bring me a unpleasant bill?

About two weeks after you order a cheap duck outfit.

[Metor]

So when will costumes come and bring me a unpleasant bill?

About two weeks after you order a cheap duck outfit.

And the customs then?

[Ross]

Metor - at the moment the govt only charges GST and/or duty when the value of the goods coming from overseas is valued at AU$1000 or more so a couple of tyres at $30ea will not attract any extra charges (except postage/shipping). Most of the big UK cycling shops such as Wiggle have free freight when you spend over a certain amount of money - varies from shop to shop but typically $100 is the threshold.

[jasonc]

So when will costumes come and bring me a unpleasant bill?

About two weeks after you order a cheap duck outfit.

And the customs then?

only to be worn at fancy dress parties. or

[Metor]

Metor - at the moment the govt only charges GST and/or duty when the value of the goods coming from overseas is valued at AU$1000 or more so a couple of tyres at $30ea will not attract any extra charges (except postage/shipping). Most of the big UK cycling shops such as Wiggle have free freight when you spend over a certain amount of money - varies from shop to shop but typically $100 is the threshold.

Thanks! Good to now.
Germany is often cheaper then the UK for bike parts. My favorite online shops there will also sent to AU so that could be interesting. I do now that most of my shopping will be done overseas without any extra costs

[Ross]

Gerry Harvey and friends whinging again about GST-free threshold for imports - http://www.smh.com.au/business/retail/o ... 2uwrq.html

[Mulger bill]

Gerry Harvey and friends whinging again about GST-free threshold for imports - http://www.smh.com.au/business/retail/o ... 2uwrq.html

Cry me a river Gerry. Fight suppliers and wholesalers for abolition of the "Australia tax" and I might consider listening to your bottom line serving plaints.

[warthog1]

Change of government. I reckon he will succeed this time
I saw on the abc news tonight that there was a study tracking the increase in overseas online purchases over the last several years. Specifically mentioned the loss of gst revenue per year which amounted to roughly 700mil last financial year.
The propaganda campaign has started to soften us for the changes that are coming.

[hudnut]

And Gerry once again misses a few points.
Actually, I don't think he misses them. He just doesn't want to work to keep his business ahead in an evolving marketplace.

Disregarding the issue of cost altogether, if you don't actually have to check the item for fit, size etc or feel a need to physically see the item first, then shopping online means:
- you can research online for exact specs, from multiple sources
- you can check reviews online (being careful of veracity, but they'll be at least as truthful as most sales staff in my experience)
- you can discuss on forums if desired
- avoiding inconvenience of traffic, parking, getting there during opening hours, fitting the stuff in the car etc
- getting it delivered to your door
- not wasting a day shopping around
- not wasting a day finding someone who has it in stock
- avoid incorrect product information given by clueless, pimply, gum chewing, sullen floor staff.

If I want some tyres, some tubes, chain etc, then I get online after dinner and order them.
Then they arrive. Easy Peasy.

This isn't just for bike gear. This goes for every consumer commodity item Gerry is selling.

I need a new ADSL router.
What's available on the market?
Compare features between a few?
New acronym on the spec sheet you've never heard of? Chances are the Sales Droid hasn't heard it either. Google it.
Check some forums to see if there's been any issues with that model.
New firmware available?
Now I know which one, who has one in stock?
Order at 11:30pm and get it delivered in a couple of days.
Sorted.

I would generally also do a youtube search to look at the interface if it's something like a GPS unit.
Someone is bound to have put up a demo.

Basically, if your business is commodity items, you need to change your business model.
Bricks and mortar doesn't match the convenience of online shopping, even before price enters the equation.

I personally have paid more for things online to avoid the hassle of getting to a shop during business hours.

Gerry says he has been warning of this for years.
Then he needs to address it in other ways besides trying to make other people more expensive.

With the information available online, a lot of people do not need in store expertise to purchase commodity items.
Retailers can:
- provide services not available online
- goods not available or impractical to obtain online
- watch their clientele reduce to those who do not shop online for the reasons above (they do exist)

[hudnut]

And before I forget.

Even with GST added, overseas purchases are still cheaper than Harvey Norman.

[biker jk]

In the old days, retailing was a non-tradeable service, in that foreign competition was non-existent due to no online shopping, import tariffs and high postage costs. That has all changed. So domestic retailiers' margins are under enormous pressure. This means they need to get their costs lower to compete (and improve service, of course). The minimum hourly wage in Australia is double that in the US and the industry is heavily unionised, so it will be hard to reduce labour costs other than by shedding workers. Rents are way too high but Westfield is a near monopoly and is in no hurry to reduce them. Moreover, in the specific case of Harvey Norman, they are really a property investor (own many of the stores which are leased to franchisees) and so also in no hurry to cut rents. So the tough going for Australian shop front retailing will continue.

[rkelsen]

Australians spent more than $7 billion on shopping at overseas online shops during the 2012-13 financial year
...
Total retail sales is estimated to be about $260 billion.
...
"It tells us that the consumer has been spending more than we thought, but all that spending has been leaking to the rest of the world."

7/260 = roughly 2.7%... They're whining about 2.7% of all retail sales going overseas.

Thanks for reminding me to not set foot in one of your stores Mr. Harvey. I'd almost forgotten.

Even at $700 million, there wouldn't be much left after the costs of collecting it are paid.

[jasonc]

And before I forget.

Even with GST added, overseas purchases are still cheaper than Harvey Norman.

I just paid <$22 from chain reaction cycles for ultegra chains.
http://www.bikes.com.au/p/4362172/shima ... chain.html – $85

yup. GST....

[Dimis]

In the old days, retailing was a non-tradeable service, in that foreign competition was non-existent due to no online shopping, import tariffs and high postage costs. That has all changed. So domestic retailiers' margins are under enormous pressure. This means they need to get their costs lower to compete (and improve service, of course). The minimum hourly wage in Australia is double that in the US and the industry is heavily unionised, so it will be hard to reduce labour costs other than by shedding workers. Rents are way too high but Westfield is a near monopoly and is in no hurry to reduce them. Moreover, in the specific case of Harvey Norman, they are really a property investor (own many of the stores which are leased to franchisees) and so also in no hurry to cut rents. So the tough going for Australian shop front retailing will continue.

There really should be a "like" button for this. ^^^

Can Gerry (or other), please tell me what the "value add" is that he is providing that suggests I should open my wallet to give him his due?

[Mulger bill]

And before I forget.

Even with GST added, overseas purchases are still cheaper than Harvey Norman.

I just paid <$22 from chain reaction cycles for ultegra chains.
http://www.bikes.com.au/p/4362172/shima ... chain.html – $85

yup. GST....

Fix the "Australia Tax" Gerry and we'll talk.

[boss]

Change of government. I reckon he will succeed this time

Yeah I can see them removing threshold. I don't think it will be due to budgetary pressures, in the scheme of things 10% of $7b is two fifths of SFA in a $400b budget.

Thing is, it won't really discourage online shopping o/s. I imagine most savvy retailers that are already targeting Australia will build GST in their pricing and pre-pay customs costs.

Funny though, you've got Tony on the news negotiating free trade agreements with China, simultaneously making moves to lift tariffs. Politics as usual.

[rkelsen]

Yeah I can see them removing threshold.

It'll be interesting to see what they do. Are the Liberals really liberal?

Personally, I hope that they don't change it. Then this whole "issue" can go away.

[DarrylH]

I have no problem with a lower threshold providing that they remove the importers monopoly at the same time. That should lead to lower retail prices.

[Mulger bill]

I have no problem with a lower threshold providing that they remove the importers monopoly at the same time. That should lead to lower retail prices.

All pigs fuelled...

I can see a big backlash against stupid local traders who think this will drive up custom in the BnM stores.

[DavidS]

If they reduce the GST threshold for overseas online purchases who will pay for this? The reason I ask is that a big part of the reason for the threshold is that the government will actually lose money as it will spend heaps trying to get the revenue. Not worth it.

DS

[boss]

Yeah I can see them removing threshold.

It'll be interesting to see what they do. Are the Liberals really liberal?

I know, right. I thought the same thing when I typed out my previous post... I think pleasing business wins out over lib ideology. This sort of stuff makes those young lib types cry.

I have no problem with a lower threshold providing that they remove the importers monopoly at the same time. That should lead to lower retail prices.

Too hard basket.

I have no problem with a lower threshold providing that they remove the importers monopoly at the same time. That should lead to lower retail prices.

All pigs fuelled...

I can see a big backlash against stupid local traders who think this will drive up custom in the BnM stores.

I can't see any backlash. Most people (Australians) just take the path of least resistance. At best, you might get a small backlash from the 'crazies' that care enough to do something that lasts maybe a couple of months.

[Mulger bill]

And the path of least resistance, at least as regarding the majority of bike bits and many small purchases that don't involve huge shipping costs will still be online and OS, unless Gerry and his mates can convince Wiggle et al to impose an Australia Tax.

[jasonc]

And the path of least resistance, at least as regarding the majority of bike bits and many small purchases that don't involve huge shipping costs will still be online and OS, unless Gerry and his mates can convince Wiggle et al to impose an Australia Tax.

heh. going by Wiggle's operational structure, they'll start selling whitegoods, electronics and furniture. Just to cheese him off more.