Amazon purchases and new GST Rules

[crowie]

Has anyone else received this email as copied below from Amazon with the changes to the Australian GST laws??
*************************************************************************************************

As a result of changes to Australian GST law, on 1 July 2018 Amazon’s international shopping options for Australian customers will change.

While we regret any inconvenience this may cause, from 1 July we will be redirecting Australian customers from our international Amazon sites to amazon.com.au where you can shop for products sold by Amazon US on the new Amazon Global Store, available today. We have taken this step to provide our customers with continued access to international selection and allow us to remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas.

Amazon Global Store will allow Australian customers to shop on amazon.com.au for over four million items that were previously only accessible on amazon.com. This selection is in addition to the more than 60 million products that are already available on amazon.com.au across 23 categories, including books, fashion, toys, and electronics.

To welcome you to amazon.com.au, and thank you for choosing to shop with us, we are offering you a $20 voucher to redeem against your next purchase on amazon.com.au of items sold and shipped by Amazon AU. Just include your unique promotional code below at checkout when purchasing eligible items (see full terms and conditions below).

Thank you for choosing to shop with Amazon.

[woodPixel]

https://www.news.com.au/finance/business/retail/we-regret-any-inconvenience-this-may-cause-amazon-to-stop-shipping-to-australia-from-july-1/news-story/0842f955c18b0f84c3cee7046f63b894


...In an email to customers, Amazon said “while we regret any inconvenience this may cause”, it would redirect Australian customers from its international sites to Amazon.com.au, “where you can shop for products sold by Amazon US on the new Amazon Global Store, available today”.

No doubt at Australian prices.....

[ian]

most common Google search term for the next 6 weeks -- How do I get around Amazon's geoblocking?

[old1955]

It’s in the online papers now, Peter.


Missed woodPixel’s thread link.

[bueller]

I’m sure this will result in fairer prices for Australians. Not like retailers were gouging us before online shopping became popular right?

Lord I’m sick of this government.

[ian]

I’m sure this will result in fairer prices for Australians. Not like retailers were gouging us before online shopping became popular right?

Lord I’m sick of this government.you really shouldn't blame the government

this latest is really the Gerry Harvey Tax

[damian]

It will be interesting to see how that works. As for geoblocking vpn will take care of the purchases. I use opera browser and it has built in vpn. All I have to do is open settings, click the privacy and security tab, click the vpn checkbox and all my browsing is routed internationally. Click it again and it's off again. I don't need to reboot the browser or anything. It's trivial...

They may however refuse to ship to aus off the USA site in which case a reshipper will be needed.

It's bs of course. The price difference was never 10%, more like 50%.

The other thing I've notice is that last year purchases from china were coming in maybe 2 weeks. It's now 6 - 8 weeks and I suspect it customs holding stuff up. I have no absolute proof of that. You gotta wonder....

[derekcohen]

I have just compared prices on something I purchased a while ago: audio tecnica ath-anc23 ear buds (for my wife). The Amazon (US) price was $37 (USD), which was what I paid. The Amazon (Oz) price is $123.56 (AUD). That's a hell of an exchange rate!

Regards from Perth

Derek

[chemfish]

I heard about this today, figure now is the time to spend up and buy a bunch of things that I have had sitting in my cart "until I had the cash"

It's funny how big business can happily run small business out of town but as soon as they have foreign competition they scream bloody murder.

[woodPixel]

Indeed. The Amazon prices are not equitable. Perhaps they are still working on that...:rolleyes::rolleyes::rolleyes::rolleyes::rolleyes:

(unless a 300% markup is their actual goal).

On the China delivery speed, I've found it faster than ever.

... But today I did get a kilo blonde dewaxed shellac flakes from India, the bag has been slashed open by some ham fisted barbarian in customs. Made a right bloody mess of it!!!!

One last thought, I like the way the government is leveling the playing field by increasing taxes... After all, paying more tax is somehow "fair".

What an obscenity.

[aldav]

What about all the products that we had access to on amazon.com that aren't sold and shipped by Amazon. :? Note that Derek's ear buds aren't sold and shipped by Amazon on either site.

[ian]

One last thought, I like the way the government is leveling the playing field by increasing taxes... After all, paying more tax is somehow "fair".

What an obscenity.unfortunately, put that way it just sounds like a selfish whinge.

what I believe you mean is that no reasonable person objects to paying GST on their overseas purchases. What they do object to is local wholesalers and retailers using the GST as a shield to justify markups in the order of 300% compared to the world price. That and the lack of choice. Previously the government has acted to allow parallel imports to protect Australian consumers from restricted choice and price gouging by local wholesalers and retailers. With the decision to apply GST on low value imports, the government has effectively returned price gouging to the Australian market.

[woodPixel]

I wasn't whinging - though I do like to complain :)

My para-quote came from several articles, such as "“This new law levels the playing field for Australian businesses, by forcing foreign businesses to pay GST,” Mr Morrison said in a statement. “The government doesn’t apologise for ensuring multinationals pay a fair amount of tax here in Australia. That tax revenue is used to fund essential services."

Perhaps I've mentioned it before, but this whole GST thing is a fiasco. To describe any tax system as fair is wrong. To claim that adding taxes to a consumers purchases from now on creates "new fairness" is wrong.

More insane, is the way they expect a foreign business to collect and remit GST to the ATO. I'd really love to see how they are going to police THAT... (unless, as I think, very dark days are coming wrt imports)

The Amazon move is very clever. Too clever by half. Thinking it through took less than 10 minutes to realise its a way of loading up the local operation with an absolute mountain of overseas debt (no taxes paid!!!), obtain a fast-tracked bulk container shipping mechanism, a government-sanctioned hammer-blow to the head of small retail businesses PLUS a means of restricting supply to increase local margains. Brilliant. In one swoop they have turned themselves into the enforced Australian distributor for 5 million extra products. Small/medium business will have no choice but to deal with them (watch Amazon strangle the supply lines!). Pure genius!!! It's the evils of Walmart in the 90's times a million.

[woodPixel]

Obviously there is some work for Amazon AU to do yet. I just thought to see what the differences are. These are in my basket for buying...

Freeman PFWS Professional Fine Wire Stapler us25.81 au161.54 (welllll.....)
3M Peltor Optime 105 earmuffs us19.88 au106.00 (guess its off to Blackwood)
Mirka 9A-241-120 6-Inch 120grit us45.00 au61.14 (not bad!)

The rest are staples for the stapler (none in stock in AU), a video capture device to save my old tape movies of the kids and a variety of milk paints.... none of which are on the site here.

Let's hope the AU site takes the order, bungs it all in a shipping contain in bulk, ships it over and local delivers en-masse. It would be a PITA to get all these things separately.

I hope local retailers somehow get on top of this.

[Beardy]

Whilst I accept we pay a premium for product, I don’t think you can compare prices from differently geared economies on a like for like basis without also looking at wages and all the other costs of business which are huge.
Australia is ridiculously expensive to do business in.

[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 [emoji19]

[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 [emoji19]just remember to write to your local MP every time you can't purchase what you need.

[Fuzzie]

I'm pretty sure Amazon is capable of calculating different taxes correctly for various states in the US so I don't think calculating GST for Australian shipping addresses is really going to be that challenging for them. I suspect they just want to force every Australian onto the local portal.

I'm more concerned about the per package fee (https://www.smh.com.au/politics/federal/department-of-home-affairs-plans-new-tax-on-parcels-being-posted-to-australia-20180321-p4z5gw.html)proposed by the Home Affairs Department on parcels. This will mean my $1.20 widget including postage (plus GST of .12, {will they also charge GST on the shipping cost portion?}) from China will now attract an additional $5 Home Affairs handling fee. How is it going to be collected? Why doesn't the Government just add the 10% GST charge at the same point? Given we have tax treaties with a lot of countries, will any overseas VAT paid be credited against GST to be paid locally? If not isn't that double taxing?

[AlexS]

The alternative would be to go back to the old days, when we used to have to pay import duty before collecting imports from the customs depot in Elizabeth St. in Sydney.

[dai sensei]

Not really sure what is going to happen, but the new tax frameworks are for less than $1000 value items, it has already been applied to items over $1000 for the past year. Anyone got any experience of how it effected those items in the past 12 months, i.e. did they go up by 10%/20%/300% ?

[chemfish]

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.

I think everyone understands these basics.

But, when a company like Harvey Norman that operates in the hundreds of millions of dollars of net income (ie after wages, tax, electricity etc) and is run by a billionaire is complaining about unfair competition........

It should be noted that these stores will also happily undercut smaller local competition, by just enough to win the sale. No one in business sells for a common and fair margin, you sell at the highest price you can, if the small local store is buying a tv for $1000 and selling at $1500 and you are buying the same thing for $400 you don't sell at $900, you sell at $1450.

[cava]

I haven't really been following this issue, apart from the big headlines, but is there any limit that the GST is not imposed? ie <$50 etc

[dai sensei]

I haven't really been following this issue, apart from the big headlines, but is there any limit that the GST is not imposed? ie <$50 etc

My understanding is no, all purchases will attract tax, but I have no idea how it is going to be enforced. Maybe China will just make everything free but charge for postage

[ian]

I haven't really been following this issue, apart from the big headlines, but is there any limit that the GST is not imposed? ie <$50 etc
from memory it's supposed to be
>$1000 (goods + Shipping), 10% GST as per current arrangements -- i.e. collected at the border
$300 to $1000 (goods + shipping), 10% GST collected at point of sale, or point of on forwarding if you use a freight forwarder like Shipitto.
<$300, GST free.

[ian]

I'm pretty sure Amazon is capable of calculating different taxes correctly for various states in the US so I don't think calculating GST for Australian shipping addresses is really going to be that challenging for them.
As I understand the US sales tax regime, tax is only payable where the retailer and customer reside in the same state. And collecting and paying the tax is the retailer's problem.

Again as I understand the new "rules", Australia is making Amazon responsible for collecting the tax for all goods bound for Australia where the sale is transacted or the retailer accessed through Amazon.com, amazon.co.uk, etc

[FenceFurniture]

from memory it's supposed to be
>$1000 (goods + Shipping), 10% GST as per current arrangements -- i.e. collected at the border
$300 to $1000 (goods + shipping), 10% GST collected at point of sale, or point of on forwarding if you use a freight forwarder like Shipitto.
<$300, GST free.I've just looked through as much of the ATO (https://www.ato.gov.au/Business/International-tax-for-business/GST-on-low-value-imported-goods/When-to-charge-GST/) and Home Affairs (https://www.homeaffairs.gov.au/busi/cargo-support-trade-and-goods/importing-goods/duty-rates-and-taxes/low-) websites as I can stand for one session, and I've seen no mention of $300 whatsoever. No mention of $50 either.

However, what does stand out time and time again is that if the goods are >$1000 then the GST (and any applicable Import Duty) will be charged at the border, just the same as it currently is. That is to say that the retailer/freight forwarder etc DOES NOT charge the GST and forward to the Govt, but the receiver will be sent a First Notice by Aust Post, pay the GST and Duty, and then the goods will be released by AP for delivery.

What is not clear, or even mentioned by those sites, is what happens when purchasing from a retailer who DOES NOT sell more than $75,000 pa to Australia and who is sending a package that is less than $1000. Apart from eBay, Amazon, Lee Valley and perhaps a few dozen others, this will include a helluva a lot of retailers who are sending stuff here.

I can see giant cock ups coming out of this. For example, I have dealt extensively with Shipito over the years. Trying to get them to understand anything more complex than 2 + 2 = 4 is virtually impossible. I can just see them saying that GST has to be paid to them for ALL parcels, inc those >$1000. That will mean that Home Affairs will also demand GST upon arrival, the customer will have to claim the first GST back from Shipito, who in turn will deduct it from their next GST return to the Aust Govt.

Yeah right. That should go very smoothly indeed. Shipito are masters of hiding behind private agreements. For example they say Knives can't be carried by TNT, but TNT Australia says that's OK. Shipito then says "our agreement with the agent here says no". Same deal with wooden items or parts coming via Aust.Post.

[FenceFurniture]

Furthermore, I believe that the legislation has been designed to make retailers overseas completely uninterested in sending stuff to Australia unless it is >$1000. What retailer wants to faff around collecting tax for the Aust Govt? For the amount of sales they might make in a year I think they'll just forego that share of the market that they MIGHT have.

THAT is really what Harvey wants. Overseas retailers collecting and paying GST is of no benefit to him whatsoever - no increased sales for him there. He thinks that if it is too hard for the overseas retailers then we will be forced to purchase from him.

John Elliot response to that!

I will go to even greater lengths to not purchase from him.

[ian]

I've just looked through as much of the ATO (https://www.ato.gov.au/Business/International-tax-for-business/GST-on-low-value-imported-goods/When-to-charge-GST/) and Home Affairs (https://www.homeaffairs.gov.au/busi/cargo-support-trade-and-goods/importing-goods/duty-rates-and-taxes/low-) websites as I can stand for one session, and I've seen no mention of $300 whatsoever. No mention of $50 either.
the $300 might have been an assessment or assumption in a Productivity Commission report on the issue.

[ian]

I can see giant cock ups coming out of this.
snip
I can just see [overseas retailers] saying that GST has to be paid to them for ALL parcels, inc those >$1000. That will mean that Home Affairs will also demand GST upon arrival, the customer will have to claim the first GST back from Shipito, who in turn will deduct it from their next GST return to the Aust Govt.

Yeah right. That should go very smoothly indeed.
yeah right, it will go very smoothly indeed

we'll all end up paying double GST.

better get ready to write to Malcolm, your MHR and Senators and don't forget comrade Bill

[ian]

I believe that the legislation has been designed to make retailers overseas completely uninterested in sending stuff to Australia unless it is >$1000. What retailer wants to faff around collecting tax for the Aust Govt? For the amount of sales they might make in a year I think they'll just forego that share of the market that they MIGHT have.

THAT is really what Harvey wants. Overseas retailers collecting and paying GST is of no benefit to him whatsoever - no increased sales for him there. He thinks that if it is too hard for the overseas retailers then we will be forced to purchase from him.

John Elliot response to that!

I will go to even greater lengths to not purchase from him.
here here

[q9]

I think everyone understands these basics.
But, when a company like Harvey Norman that operates in the hundreds of millions of dollars of net income (ie after wages, tax, electricity etc) and is run by a billionaire is complaining about unfair competition........


It wasn't really directed at HN, but HN is a different thing altogether. Amazon will kill him and he knows it. Like clockwork for the last 6+ years, about 6-8 weeks out from reporting season he's out there bleating about tough conditions, unfair advantages that competitors have, etc.

Then along comes Amazon which takes away the overheads of retail storefronts...welcome to the future.

[aldav]

Half the problems to do with excessive markups in Australia, particularly on specialist goods, are due to our small market and relative isolation.

A local importer negotiates an exclusive contract with a manufacturer to be the only supplier of the manufacturers goods in Australia. The importer acts as the distributor to the local retailers. The manufacturer won't deal with any other importer and also has in place agreements with their overseas wholesale agents to not supply Australian importers. The local distributor now has a chance of moving the product without having to hold it for an extensive time because he has tied up the whole Australian market, if you want it it has to go through him. The problem with this model from the consumers point of view is that there is another level in the supply chain that needs to make profit out of the goods. By the time the item gets to the consumer the price has gone up to four times what the distributor originally paid for it.

A retailer directly imports some specialist goods, they have only one or two outlets. Because of the combined constraints of our market size and their size they are unable to buy at the best price. On top of that because of their size they end up taking longer to sell the stock. Buying stock and holding stock for extended periods costs money. So relative to bigger markets the price goes up.

Any of the bigger retailers, particularly those with huge advertising budgets, are able to buy at the right price and sell at much bigger margins. I don't know why anybody ever buys anything from Harvey Norman. Take the example of Brand Name beds, lets say Sealy, you can buy the same bed at multiple retailers (yes I know it will have a different model name label on it - but it's the same bed). If you can't get it for 30% less than the price that Harvey Norman wants for it you're not trying.

[Beardy]

There seems to be a lot of negative vibe towards Gerry Harvey.
Not sure why, he started with nothing and has worked bloody hard to get to where he is today, this country need more of him. He is a humble man and has helped many a small business get on its feet.
Another thing is that Gerry does not run the retail outlets, they are all franchised of which he gets a margin and rent for their section of his premises. When you go into one of his stores you are dealing with several different small business operators, each section is a different small business.

[aldav]

Yep franchising, another business model that leads to higher prices and often doesn't lead to a good outcome for the franchisee, who incidentally has also worked bloody hard and put a lot of money on the line. Good luck to Gerry Harvey, he's worked hard and smart and made a lot of money. That doesn't mean I have to like the way he's done it any more than I like Wesfarmers or Woolworths. If you're relying on companies like that to do the right thing by you you're highly likely to be disappointed.

[FenceFurniture]

There seems to be a lot of negative vibe towards Gerry Harvey. Not sure why,Dead simple really, he is a bloody whining whinger. I had a brief chat with him in a store once about 20 years ago, and even then he had a negativity in his conversational tone (and I was complimenting him on something he had done).

has helped many a small business get on its feet.Maybe, but not as many as he sent to the wall.

Add to that this current situation, and there are a whole bunch of people who have good reason to think -vely of him. After all, he may not have been the only one gunning for these changes, but he was most certainly the highest profile and leading from the front.

Can someone, anyone, tell me how this is a good move for the consumer - how it benefits the consumer even in the most minute way? That is to say - who is out there hankering to pay more, much more, for the same items, AND from a vastly reduced range.

[Fuzzie]

Really the gripes here mainly seem to be about the reduction in choice and access to things that aren't readily available locally (readily available including being at a reasonable markup), paying an extra 10% isn't the issue.

What is the point of imposing a 10% gst if that means you can't actually buy the product anymore? Who is benefiting then?

[Beardy]

Dead simple really, he is a bloody whining whinger. I had a brief chat with him in a store once about 20 years ago, and even then he had a negativity in his conversational tone (and I was complimenting him on something he had done).
Maybe, but not as many as he sent to the wall.

Add to that this current situation, and there are a whole bunch of people who have good reason to think -vely of him. After all, he may not have been the only one gunning for these changes, but he was most certainly the highest profile and leading from the front.

Can someone, anyone, tell me how this is a good move for the consumer - how it benefits the consumer even in the most minute way? That is to say - who is out there hankering to pay more, much more, for the same items, AND from a vastly reduced range.

Mate it is dead simple, we are talking about an Aussie running an Aussie business that employs Aussies.......thousands of them. Tell me how buying from Amazon does anything good for the country apart from giving the mailman a job. Yes the individual consumer buying from a different economy benefits but at a cost to the Australian economy
Dont get me wrong, I like to get things cheap too and buy online for a saving as well but I don’t begrudge the Aussie retailer trying to make fair living.

This whole drive to add GST to O/S purchases is not about reducing choice in specialised fields like members here are on about, it is about the much broader retail industry that is losing a lot of business to online O/ S purchases.
Whilst everyone likes the prices they get O/S, I bet you would not be so keen on being paid the wages they receive ( or don’t receive) or their pensions, social security or their medical cover

[aldav]

This whole drive to add GST to O/S purchases is not about reducing choice in specialised fields like members here are on about

Yeah, but that's the result and you can't expect people to be happy about it.

[q9]

Mate it is dead simple, we are talking about an Aussie running an Aussie business that employs Aussies.......thousands of them. Tell me how buying from Amazon does anything good for the country apart from giving the mailman a job. Yes the individual consumer buying from a different economy benefits but at a cost to the Australian economy
Dont get me wrong, I like to get things cheap too and buy online for a saving as well but I don’t begrudge the Aussie retailer trying to make fair living.

This whole drive to add GST to O/S purchases is not about reducing choice in specialised fields like members here are on about, it is about the much broader retail industry that is losing a lot of business to online O/ S purchases.
Whilst everyone likes the prices they get O/S, I bet you would not be so keen on being paid the wages they receive ( or don’t receive) or their pensions, social security or their medical coverYes but the HN model of business is no longer relevant. The world has moved on, and there is no use pining for the days of old.

The fact they didn't make the web work for them will be a case study in the business books of the future.

Sent from my MI 5s using Tapatalk

[Beardy]

Yep franchising, another business model that leads to higher prices and often doesn't lead to a good outcome for the franchisee, who incidentally has also work bloody hard and put a lot of money on the line. Good luck to Gerry Harvey, he's worked hard and smart and made a lot of money. That doesn't mean I have to like the way he's done it any more than I like Wesfarmers or Woolworths. If you're relying on companies like that to do the right thing by you you're highly likely to be disappointed.

Hang on a second, one minute you are saying he is undercutting the little bloke and now you are saying he is charging higher prices.
Agree that franchising has made some very rich and some very poor but the same happens with the privateers
I don’t like what the big corporate end of town has done either but that is how things progress. Look at the choice and prices we pay now compared to 30 years ago. We are spoilt for choice and price

[Beardy]

Yes but the HN model of business is no longer relevant. The world has moved on, and there is no use pining for the days of old.

The fact they didn't make the web work for them will be a case study in the business books of the future.

Sent from my MI 5s using Tapatalk

This is not all about HN,it is about the whole retail industry and all the jobs that go with it. Gerry is just leading the charge. I am sure he has enough coin to crawl back into his hole and live a good life without working another day if he wanted too.

[FenceFurniture]

There is much to respond to in Beardy's posts, but I'm hungry, and 4 Corners is about to start. :U

[q9]

I am sure he has enough coin to crawl back into his hole and live a good life without working another day if he wanted too.

Whether he can or not is not the point. He isn't and he is lobbying to protect a business model that is DOA. He isn't the only one, but he sure has a knack for getting himself in the headlines.

The retail landscape is going to change irreversibly, like it or not.

Sent from my MI 5s using Tapatalk

[cava]

Mate it is dead simple, we are talking about an Aussie running an Aussie business that employs Aussies.......
I stand to be corrected, but doesn't Gerry live/reside in Singapore, and a part of his enterprise is also based there?

[aldav]

Hang on a second, one minute you are saying he is undercutting the little bloke and now you are saying he is charging higher prices.

If that's specifically aimed at my comments I can't see where I accused him of undercutting the little bloke. :? It's more that he's battered him into submission with advertising, and I think I can be pretty confident of peoples general view about advertising. :D

From the point of view of forum members the debate is about the products we will either no longer have access to or that we will have to pay extortionate prices to access. It's not about the 10%. As one of the chief whingers about the current rules Gerry Harvey is fair game in my eyes. It's his business model that is one of the main impediments to Harvey Norman being able to effectively compete with overseas sellers. And lets be clear about it, the products he is mainly talking about are small consumer electronics. He couldn't give a stuff if we lose the ability to buy a specialist piece of kit, either because no overseas source will sell it to us or the price it is available at has gone up by 300% - not 10%.

[woodPixel]

Deleted as I'm whinging...

[A Duke]

Hi,
Talk about winging, this thread does not do too bad.
Not picking on anyone in particular, but hold up a mirror and if the cap fits wear it.
Regards
:oo:

[FenceFurniture]

I am sure he has enough coin to crawl back into his hole and live a good life without working another day if he wanted too.And kee-rist I wish he would! Leave us to purchasing what we want from whom we please.



Mate it is dead simple, we are talking about an Aussie running an Aussie business that employs Aussies.......thousands of them. Tell me how buying from Amazon does anything good for the country apart from giving the mailman a job. Yes the individual consumer buying from a different economy benefits but at a cost to the Australian economyThis age old argument can be answered very simply: we do NOT buy overseas because of the GST. It's because of choice and the Australia tax. If companies like Makita, Bosch and several others can sell stuff here at prices that make it NOT worthwhile to import, then so can everyone else - it's as simple as that.


This whole drive to add GST to O/S purchases is not about reducing choice in specialised fields like members here are on aboutYES IT IS!!!! It's all about reducing the range down to what lazy Harvey has available! I'll bet he whinges about Kogan too!

To be dead clear - I don't mind paying 10% GST on imports. It's not about avoiding that - it's about choices and the Australia Tax. But the way this has been set up is to make it so hard for overseas retailers that we will have no choice but to buy from Harvey - he thinks. He is just hiding behind the GST as an excuse - as I said before it's no benefit to him. If it was otherwise then it would have been much simpler to just lower the $1000 threshold to $300 (or whatever) and collect the tax at the border. The argument against that is that there will will be enormous piles of packages delayed waiting for GST payments to be made.

Well use some of the extra revenue to put on extra staff......



I have a question for you Beardy (to which I would really like an answer): Using beer as an example, should I purchase locally made beer (albeit by a multinational in many instances) or is it just as ok for me to purchase imported beer? This relates directly to your "an Aussie running an Aussie business that employs Aussies" statement. Which is the preferable purchase?

[Beardy]

I have a question for you Beardy (to which I would really like an answer): Using beer as an example, should I purchase locally made beer (albeit by a multinational in many instances) or is it just as ok for me to purchase imported beer? This relates directly to your "an Aussie running an Aussie business that employs Aussies" statement. Which is the preferable purchase?

Drink whatever beer you like, my preference is imported beer and I drive an imported car. Probably most of what I buy is imported my boots are Aussie made though. They are all purchased locally from a retailer providing Aussie jobs and paying taxes.
The whole issue with the likes of Amazon is the Aussie economy misses out. The government does not receive enough revenue to support our current lifestyle so they are trying to seal off the gaps where $ leaves the country
I agree with you about the loss of choice being bad but I would think that was just a result of being caught in the net of the main issue. No doubt there will be a fix to bypass the problem like drop shipping.
Most people are buying this way to save money though, lots of people select product and try on for size in a bricks and mortar store and then purchase O/S on line

[Fuzzie]

What about a scenario where an Australian resident has an income stream in the US being paid into a US bank account. The income is declared in Aus and as per tax treaties is included in the persons Australian income stream and taxed at the prevailing marginal tax rate. So tax is being paid on money created outside of Australia and not part of the Australian economy. If that money is brought on shore as a financial instrument no further tax is payable. If some of that money is converted into goods overseas and now brought into Australia a new additional tax of 10% is being added to bring it onshore. This is somewhat different to sending money earnt and paid in Australia offshore to buy goods.

[BobL]

Don't get me wrong, I'm a regular OS buyer but the more I think about it the more it appears that the real reason we are in this situation is the cost of transport is far too cheap.

If we factored in the real (long term) cost of burning hydrocarbons to transport a $1 plastic widget halfway around the planet the cost would be prohibitive. This has been deliberately engineered on the pretence of efficiency but its another way of making MONEY today and shifting the real cost of doing this to future generations

Its the same reason why milk from Vic is cheaper than WA grown milk etc. This should not be the case - it should be MORE expensive, not less, to do this. We should not be able to import European Mineral water or tinned tomatoes cheaper than we can grown them here.

When sea levels rise and we have to move every one on the world's major ports and most of its cities, then perhaps people will take notice and buy locally. Long term it would make us more independent, more inventive, and restrict physical trade to high value items that smaller communities cannot manufacture.

[FenceFurniture]

Mate it is dead simple, we are talking about an Aussie running an Aussie business that employs Aussies.......thousands of them.
my preference is imported beer and I drive an imported car. Probably most of what I buy is imported my boots are Aussie made though. They are all purchased locally from a retailer providing Aussie jobs and paying taxes.These statements are at odds with each other. You are effectively saying that it's ok to import items into Australia as long as they are retailed here. That means that only the last part of the whole economic chain of events occurs within Australia. If you were really committed to your Aussie, Aussie, Aussie statement above then you would be purchasing only Australian manufactured goods. I'm no economist but I strongly suspect that the manufacture puts more stimulus into the economy than the mere selling of an item because manufacturing has a whole bunch of follow on effects.

In short, you are cherry picking to suit your answers and arguments.



With reference to my question about imported or local beer consumption: those who insist that we buy local product cannot possibly say that we should also be exporting the same product. It would be massively hypocritical to do so. The country to which it is exported faces the same dilemma, does it not? So by arguing that we should buy local but also export, those people are saying that we are a special case, that can have it both ways, and that is total bollocks!

Where do we draw the line on Tribalism? At the neighbourhood boundary? At the Suburb? At the State? At the Country border? What's the difference when we are all citizens of the world, and partaking in the world economy?

[FenceFurniture]

The whole issue with the likes of Amazon is the Aussie economy misses out. Well I don't think that is strictly the case at all. If I can save $40 on an item that is $100 locally then that is $40 more that I have to spend locally, as the case may be. (it does not necessarily follow that I will spend the savings overseas as well - in my budget it is very unlikely % wise). In that example, I have paid $60 for the item, and let's say it has 5% Import Duty associated with it, and the postage is say $8.

I would then have to pay (upon arrival)
$3 for 5% ID, and
$7.10 GST (on price + ID + freight cost)
which is a total surcharge of $10.10
meaning my item has cost me $78.10.
That means I have still saved $22* (22%) that I now have to spend on something else, and that is most likely to be a local spend. It also means that the Govt has received $10.10 or 14.8% of my pre-tax spend ($68) which I think is a pretty good earner for the Govt.

I'm happy with that, just don't take away my choices, or force me to pay hideous Australia Tax.

* Actually the savings would be more like $30 because I didn't allow for postage in the local purchase.

Furthermore - the bloody package will probably get to me quicker from the USA than it will from Melbourne!!


The biggest problem with the current implementation is the actual collecting of the tax on goods <$1000. Remember all the angst back in 1999 when everyone realised that were to become Tax Collectors for the Govt? Well now they are trying to force overseas businesses to do EXACTLY the same thing. What motive do those businesses have to satisfy our miserable little market?

[FenceFurniture]

Something that nobody (Govt included) seems to have addressed is Import Duty. Is it also payable on <$1000 purchases? Presumably it must be, and perhaps the Govt and Harvey thing that all the overseas retailers are going to go through the unbelievable pain of determining what ID is applicable.

Anyone who has had to do it will well and truly understand what I mean. It's a bloody nightmare.

You can trust me - those businesses would laugh at the thought. So that means that either
1. the Govt is prepared to forego the Import Duty, which is very significant income - probably 25-30% of the GST revenue and so not to be sneezed at,
or
2. that they expect the o'seas retailers to collect it :no: (just ain't gonna happen),
or
3. Import Duty will have to be collected at the border, so they may as well just collect the GST that way too and free up this whole disaster in the making.

Whichever way this is diced, it has been made a complete hash of, just to satisfy the King of Whingers.

[Drillit]

Well...talk about gouging...have a go at their woodturning tool prices vs. US prices. They would be delighted with this. Talk about a monopoly. I have not bothered to look at general items. But no Amazon for me. I am thinking that the GST costs may still be worth it. Drillit.

[FenceFurniture]

I can't recall seeing this covered anywhere.

If the retailers sells less than $75k pa to Australia then they don't have to register for GST. I imagine that would be a helluva lot of businesses. So how is the GST collected for purchases from those retailers? Not at all? At the border?

[ian]

Not at all -- I think

[bueller]

Never thought I’d see people singing Gerry Harvey’s praises, is that you Gerry?

Yeah he employs a lot of people under his franchises but he’ll wind up those franchises and leave them jobless in a moments notice if it suits him. Do a bit of reading and tell me he’s a man of the people.

https://www.afr.com/business/retail/inside-harvey-normans-losing-franchises-gerry-harveys-mystery-mr-fixer-20161107-gsjz44

[Beardy]

These statements are at odds with each other. You are effectively saying that it's ok to import items into Australia as long as they are retailed here. That means that only the last part of the whole economic chain of events occurs within Australia. If you were really committed to your Aussie, Aussie, Aussie statement above then you would be purchasing only Australian manufactured goods. I'm no economist but I strongly suspect that the manufacture puts more stimulus into the economy than the mere selling of an item because manufacturing has a whole bunch of follow on effects.

In short, you are cherry picking to suit your answers and arguments.



With reference to my question about imported or local beer consumption: those who insist that we buy local product cannot possibly say that we should also be exporting the same product. It would be massively hypocritical to do so. The country to which it is exported faces the same dilemma, does it not? So by arguing that we should buy local but also export, those people are saying that we are a special case, that can have it both ways, and that is total bollocks!

Where do we draw the line on Tribalism? At the neighbourhood boundary? At the Suburb? At the State? At the Country border? What's the difference when we are all citizens of the world, and partaking in the world economy?

We are talking about purchasing not manufacturing. Manufacturing is already dead in this country, my reference relates to at least giving the locals a drink where practical at the retail end. The manufacturing stimulus for this country has already gone. I don’t insist on buying local product as I have said before, I buy whatever I prefer at a price point I am happy with. I just don’t like it when people look at local to O/S pricing and think that someone here is making a killing from it, retail in Australia is tough to make a living.

I am am not going to continue banging on about it but my points in this discussion were

- local retailers are not ripping us off, they are operating under different circumstances to other world economies so you cannot do a direct comparison to what you can buy for from other countries. Likewise there are plenty of countries that make our prices look like bargains for the same product.
-supporting local retailers where possible ( including the likes of HN) has a positive impact on our economy
- purchasing on line from O/S supports the purchaser only and yes I still buy bits and pieces this way as well

[FenceFurniture]

https://www.afr.com/business/retail/inside-harvey-normans-losing-franchises-gerry-harveys-mystery-mr-fixer-20161107-gsjz44There's a pay wall on that.

[FenceFurniture]

Manufacturing is already dead in this country. The manufacturing stimulus for this country has already gone.And the 20th Century Bricks & Mortar retail model is following suit (around the world). Those that survive will be those that best adapt - that will not include Harvey. I forget how long it took him to establish an online presence, but he'd well and truly missed the boat. He needs more people like Kogan kicking his butt.


my reference relates to at least giving the locals a drink where practical at the retail end. Yes, so do I - they just happen to be selling different stuff that I purchase with the $30 I saved. It doesn't matter what the "stuff" is, as long as money is spent within the Australian economy (but again, that goes back to where do we draw the Tribalism line?).



I just don’t like it when people look at local to O/S pricing and think that someone here is making a killing from it, retail in Australia is tough to make a living.
- local retailers are not ripping us off, they are operating under different circumstances to other world economies so you cannot do a direct comparisonIn general, I would agree with you and it is not all retailers by any stretch, but unfortunately there are some who bring in specialist gear with agreements that retailers from other countries are not allowed to sell to us. They then take that as an excuse to charge whatever they like, but moan like buggery when we decide to circumvent their excesses.

You joined the forum a couple of months ago, and so would not have seen the countless discussions about pricing of a particular elite brand in Australia (although perhaps you may have as a lurker). At least every 6 months.

Some accessories are 4x the price here that they are in Europe, and 3x for accessories is very common (I haven't checked prices for a year or two). Not making a killing? Puh-lease! Why do accessories have to be 4x when the tools themselves are a mere 40-100% extra? What's the difference - it's all capital tied up and stuff in warehouses waiting to be sold. As I said before, if Makita, Bosch, et al can sell tools here for a price that makes it not worthwhile for us to import them, then so can everyone else. Yes it will be more, yes there will be GST, but just keep it within reason. My rule of thumb was that it had to be more than 15% cheaper after freight to be worthwhile losing the warranty for, and for non-warrantable items such as accessories it had to be 10% to be bothered (and only at the same time). Saving the 10% GST was just a bonus.


I am am not going to continue banging on about it but my points in this discussion wereYep, fair enough, reckon I can draw a line under it too, pending new developments...:D

[Beardy]

Never thought I’d see people singing Gerry Harvey’s praises, is that you Gerry?

Yeah he employs a lot of people under his franchises but he’ll wind up those franchises and leave them jobless in a moments notice if it suits him. Do a bit of reading and tell me he’s a man of the people.

https://www.afr.com/business/retail/inside-harvey-normans-losing-franchises-gerry-harveys-mystery-mr-fixer-20161107-gsjz44

The article is locked to prescribers only so could not read it but have a fair idea of how it goes.
I don’t doubt he can be a hard man too, you would have to if you want to survive. I know of one of his franchisees that didn’t see eye to eye with Gerry and didn’t last long but know of many others who have done alright with the alliance as well.
I am not a Gerry lover nor did I say he was a man of the people, you can’t be and be in business. I am just not a fan of the typical tall poppy syndrome knockers who dislike anyone who has become successful or wealthy.
i have worked for some of the wealthiest people in Australia as well as the Aussie battler types as well and I have found the amount of money they have has never been a measure of the person. A-holes are still a-holes whether they are rich ones or poor ones it doesn’t matter.

[Lappa]

Infinity lock mitre setup gauges from Infinity in the US - $40AU each or $72 AU the pair (at 75c to the $)
In Australia $69 each or $129 the pair.
Is this a fair mark-up by the OZ retailer or is it gouging?
The retailer stocks a number of Infinity products so these would be included in a shipment.

[BobL]

Infinity lock mitre setup gauges from Infinity in the US - $40AU each or $72 AU the pair (at 75c to the $)
In Australia $69 each or $129 the pair.
Is this a fair mark-up by the OZ retailer or is it gouging?
The retailer stocks a number of Infinity products so these would be included in a shipment.

I don't doubt there's gouging but you can't compare this way as you're assume the Aus Retailer is buying them at the same price as the US retailer and that is rarely the case.
So you have to look at the Aus retailers buy price.
I can only comment on one case and that is for Stihl chainsaws where Aus retailers pay more for them from Stihl than the RRP in the US.
The US buys about 20x more chainsaws from Stihl than Aus does so the US retailers have a huge advantage.
The average US retailer also sells many more chainsaws per unit time than Aus retailers so they make up for lower RRP by having a a higher turnover.

[Beardy]

Infinity lock mitre setup gauges from Infinity in the US - $40AU each or $72 AU the pair (at 75c to the $)
In Australia $69 each or $129 the pair.
Is this a fair mark-up by the OZ retailer or is it gouging?
The retailer stocks a number of Infinity products so these would be included in a shipment.

a quick google

At the time of this writing (August 2014), one Australian Dollar buys .92981 US dollars; so a 100,000 AUD salary equates to 92,981 USD.
Having moved last year to Australia from Washington, DC (https://www.quora.com/What-is-it-like-to-live-in-Canberra/answer/Carter-Moore), where I was earning a GS-14/1 (http://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2013/general-schedule/washington-baltimore-northern-virginia-dc-md-va-wv-pa-annual-rates-by-grade-and-step/) salary, I can say from experience that similar income in Australia does not go as far as back home.
Australia is the most expensive country in the G20 (http://www.smh.com.au/business/the-economy/australia-the-most-expensive-country-in-the-g20-20140512-3846v.html), and fourth most expensive in the world. Sydney and Melbourne are among the world's ten most expensive cities, on par with London and New York. This partially (although by no means entirely) explains why the average annual salary for Australians is considerably higher than for Americans - appx. $70,300 USD vs. $44,300 USD.
Comparing cost of living across two vast and diverse nations is difficult, but this site (http://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=Australia&country2=United+States) does a pretty good job of it. Key indicators:


Consumer prices in the United States are 32.32% lower than in Australia
Rent in the United States is 37.08% lower than in Australia
Groceries in the United States are 24.91% cheaper than in Australia
Gasoline in the United States is 32.49% cheaper than in Australia
Basic utilities (such as electricity and water) in the United States are 20.47% cheaper than in Australia
Internet subscription in the United States is 25.28% cheaper than in Australia (and download speeds are, on average, 75.78% faster in the United States than in Australia)

And my personal gripe...


Domestic beer in the United States is 42.15% cheaper than in Australia

[Lappa]

.
I can only comment on one case and that is for Stihl chainsaws where Aus retailers pay more for them from Stihl than the RRP in the US.
.

So Stihl is gouging Aussies as well. Aren’t we the lucky ones :2tsup:

[aldav]

Bow Products Featherpro Featherboard single US$30 ea. on the manufacturers US website - @ 75c exchange rate (which you won't achieve at the moment) equates to A$40. Timbecon normal price $49. After taking account of freight, GST and (maybe?) duty Timbecon would seem to be charging a fair price. So are the Australian retailers of the Infinity Lock Mitre Set-up Gauges gouging? To me the most likely answer is either possibly or probably. The chances of the answer being no would seem to be highly unlikely and yet it's the same Australian retailer selling both products. :? So are some American manufacturers gouging Australian retailers or is it that there is no alternative to the Infinity product and the consumer is therefore fair game???

[FenceFurniture]

I don't doubt there's gouging but you can't compare this way as you're assume the Aus Retailer is buying them at the same price as the US retailer and that is rarely the case.
So you have to look at the Aus retailers buy price.
I can only comment on one case and that is for Stihl chainsaws where Aus retailers pay more for them from Stihl than the RRP in the US.
The US buys about 20x more chainsaws from Stihl than Aus does so the US retailers have a huge advantage.
The average US retailer also sells many more chainsaws per unit time than Aus retailers so they make up for lower RRP by having a a higher turnover.Stihl have taken the "home turf" thing to a whole new level in the States (maybe here as well). Over there dealers are only allowed to sell to those in their local dealership area. As I understand it - not just state to state, but city/region restrictions as well.

Whilst I agree with the premise of your argument, Stihl isn't the best one to use as an example. There are plenty of European based companies that try to exercise this turf thing, and also at least attempt to fix retail pricing. Festool was fined €8,000,000 (around AUD12,000,000) about 5 years ago for price fixing in Germany.

I would think, and certainly hope that a small company like Infinity would just have a single wholesale pricelist.

It might be an interesting example to try and pull apart. In AUD they are $40 in the USA, and $69 here. Assume 50% mark-up from wholesale to retail, which would give a w'sale price of $26.66.
Freight cost - not much, even by airfreight, in a decent sized box. Call it $2.
Import Duty, probably 5%, so $1.33
GST upon retailing at $69 would be $6.27
Cost of warehousing such a small item - nil
Total costs $36.26 unless I've missed something (maybe an allowance for Custom Clearance which would only apply to imports in bulk - otherwise airfreighting already looks after that)
Profit = $69.00 - 36.26 = $32.74.
That's ~90% profit where the US retailer gets 50% (by the earlier definition). I can't see that the Aussie retailer needs 40% more to cover the country differences. Perhaps 20%. A price of $59 to $63 would be fairer, and quite reasonable. A retail price here of about 150% of the overseas price (in AUD) is fine by me, depending on the freight costs etc.

It's certainly far from the worst example I've seen.

[BobL]

Stihl have taken the "home turf" thing to a whole new level in the States (maybe here as well). Over there dealers are only allowed to sell to those in their local dealership area. As I understand it - not just state to state, but city/region restrictions as well.

Whilst I agree with the premise of your argument, Stihl isn't the best one to use as an example. There are plenty of European based companies that try to exercise this turf thing, and also at least attempt to fix retail pricing. Festool was fined €8,000,000 (around AUD12,000,000) about 5 years ago for price fixing in Germany.

I would think, and certainly hope that a small company like Infinity would just have a single wholesale pricelist. .

There will be an official wholesale price but if you buy 10000 units you will obtain a much lower price than if you offer to buy 100. Even Aus retailers offer this, eg Element14, Altronics etc.

[FenceFurniture]

Yeah, but I don't think anyone in the world is ever going to buy 10,000 of the same router bit. I understand what you are saying though.

[ian]

And my personal gripe...


Domestic beer in the United States is 42.15% cheaper than in Australia


sounds about right.
it's generally accepted that US domestic beer is mostly flavoured water.

[BobL]

sounds about right.
it's generally accepted that US domestic beer is mostly flavoured water.

I think you mean coloured?

Actually my experience is the US microbrewery scene makes our micro brewery scene pale into insignificance. If you know where to look there is all manner of delicious brews available in most US major cities and towns. Every city I have been to in the US has surprised me with the high quality and variety of microbrewery Beers. US microbreweries are much more willing to try unusual ingredients and have come up with some incredible brews. One of my favourites is Dog Fish Head, there's nothing like their 18% stout and their IPAs here in Aus. They also made a beer using sultanas and champagne yeast which was amazing. Stone brewing in CA are also one of my other faves. I could go on - well maybe a bit more. Seattle has a vibrant microbrewery scene - I did a brewery crawl over a couple of days there back in 2005 - it was hard work as there were so many. Even though its the home of StarSluts some of the Coffee was also outstanding.

[ian]

I think you mean coloured?

Actually my experience is the US microbrewery scene makes our micro brewery scene pale into insignificance. If you know where to look there is all manner of delicious brews available in most US major cities and towns. Every city I have been to in the US has surprised me with the high quality and variety of microbrewery Beers. US microbreweries are much more willing to try unusual ingredients and have come up with some incredible brews. One of my favourites is Dog Fish Head, there's nothing like their 18% stout and their IPAs here in Aus. They also made a beer using sultanas and champagne yeast which was amazing. Stone brewing in CA are also one of my other faves. I could go on - well maybe a bit more. Seattle has a vibrant microbrewery scene - I did a brewery crawl over a couple of days there back in 2005 - it was hard work as there were so many. Even though its the home of StarSluts some of the Coffee was also outstanding.
Micro brewers don't count as the beer they brew is tailored to a particular palate and alcohol content.

the coloured water comment applies to mass market brews -- especially those in tins.

[Bob38S]

Interesting thread, don’t know if this helps or hinders but some info,

As of 30 June 2015, Harvey Norman Holdings' overseas operations (all conducted under the Harvey Norman brand) are in:



Croatia (2 stores)
Ireland (12 stores)
Malaysia (14 stores)
New Zealand (36 stores)
Northern Ireland (2 stores)
Singapore (17 stores)
Slovenia (5 stores)

[Cal]

I would like to add a little to this thread. I started in retail (photography gear) back in 1990 and ended in 2010, in the beginning retail margins for any camera were around the 30% mark and tax on the camera was 33% . I don’t know if anyone remembers the pre GST days that we all paid tax on many items? Anyway as time went on and with the implementation of GST product prices come down and so did margins, the Harvey franchise began as did the JB hifi stores which meant more competition in the photo world, it was no longer a camera stores domain to sell photo products it became a free for all and the wholesalers welcomed it with open arms. Back at the start the store I worked for was part of a buying group which meant that as part of that group we had better buying power than an independent store. We could either chose to discount certain items to encourage customers to buy from us or just pocket the profits which may have added 10-15% to the margin on a given product. Once the new players come to town the wholesalers had retailers that were way bigger than what they had ever had in the past and the small retailers (even the buying groups) were hung out to dry. The retail margins dropped very quickly to around the 10% mark just to compete with the large box movers, the boss even said to sell cameras at cost if we had to to get the sale. This left us with trying to make up the difference in overall margin out of accessories (no easy task). The wholesalers/importers within Australia do not buy anywhere near the quantities that the US, Asia or the EU do, another factor was that at the time there was no Nikon Australia etc. like there was in the US and Europe, all goods were imported by independent importers. A part of the importation agreements were that for 100 cameras come with enough spare parts to cover warranties say 30%, if more cameras than the 30% come back for repair the importers had to wear the cost of repairs not to mention the labour costs for those repairs.
No doubt the wholesalers/importers were making good margins out of the retailers back in the day. Things have changed though and there are less independent importers than what there were, Nikon, Olympus and Sony are now importing and distributing their own product which means profits go back to the parent company OS and margins are withheld within the company, the big chain stores like Harvey, JB, Big W, Myer etc. get the big discounts from the wholesalers and the independent stores get the dregs. I don’t know what happens within the woodwork world but I would hazard a guess that the retailers in Australia are not making a motza out of us as some would suspect. The wholesalers may be doing ok but as a country we just don’t have the population to allow us the buying power of the rest of the world. As a country we are a very small fish in a really big pond.

On the Harvey thing, part of the reason for his wealth is that he provides his franchises with a loan to buy into the business, they then have to pay back the loan and franchise fee and pay rent for the floor space and advertising fees, warehousing etc. all of which goes back to the man at the top, they then have to pay wages and running costs and all the usual things that go along with owning a business, not an easy task with the low margins that they now have in consumer electronics.

[Beardy]

I would like to add a little to this thread. I started in retail (photography gear) back in 1990 and ended in 2010, in the beginning retail margins for any camera were around the 30% mark and tax on the camera was 33% . I don’t know if anyone remembers the pre GST days that we all paid tax on many items? Anyway as time went on and with the implementation of GST product prices come down and so did margins, the Harvey franchise began as did the JB hifi stores which meant more competition in the photo world, it was no longer a camera stores domain to sell photo products it became a free for all and the wholesalers welcomed it with open arms. Back at the start the store I worked for was part of a buying group which meant that as part of that group we had better buying power than an independent store. We could either chose to discount certain items to encourage customers to buy from us or just pocket the profits which may have added 10-15% to the margin on a given product. Once the new players come to town the wholesalers had retailers that were way bigger than what they had ever had in the past and the small retailers (even the buying groups) were hung out to dry. The retail margins dropped very quickly to around the 10% mark just to compete with the large box movers, the boss even said to sell cameras at cost if we had to to get the sale. This left us with trying to make up the difference in overall margin out of accessories (no easy task). The wholesalers/importers within Australia do not buy anywhere near the quantities that the US, Asia or the EU do, another factor was that at the time there was no Nikon Australia etc. like there was in the US and Europe, all goods were imported by independent importers. A part of the importation agreements were that for 100 cameras come with enough spare parts to cover warranties say 30%, if more cameras than the 30% come back for repair the importers had to wear the cost of repairs not to mention the labour costs for those repairs.
No doubt the wholesalers/importers were making good margins out of the retailers back in the day. Things have changed though and there are less independent importers than what there were, Nikon, Olympus and Sony are now importing and distributing their own product which means profits go back to the parent company OS and margins are withheld within the company, the big chain stores like Harvey, JB, Big W, Myer etc. get the big discounts from the wholesalers and the independent stores get the dregs. I don’t know what happens within the woodwork world but I would hazard a guess that the retailers in Australia are not making a motza out of us as some would suspect. The wholesalers may be doing ok but as a country we just don’t have the population to allow us the buying power of the rest of the world. As a country we are a very small fish in a really big pond.

On the Harvey thing, part of the reason for his wealth is that he provides his franchises with a loan to buy into the business, they then have to pay back the loan and franchise fee and pay rent for the floor space and advertising fees, warehousing etc. all of which goes back to the man at the top, they then have to pay wages and running costs and all the usual things that go along with owning a business, not an easy task with the low margins that they now have in consumer electronics.

Cal I would say that your experience in retail would be indicative of most sectors of the retail trade today. As you have said Australia is insignificant on the world trade scene.
I went to the world trade fair in China a couple of years ago and the minimum quantity of widgets that they propose you buy is very high.....I doubt there would be that many interested purchasers in Australia for some if the items but they obviously have no problem selling in those volumes to other parts of the world.

[Cal]

I don’t really understand where the government is going with the GST thing either, if we sell an item from Australia to somewhere overseas we and the buyer are quite with our rights to not apply GST on the item no matter what the price is. The government misses out on its piece of the pie because we can then claim back a tax credit for that item we have paid GST on. If an individual purchases an item here and travel out of the country they can also claim back the GST. No different to what the old duty free days (but less tax involved) I get that GST is an income for the country and having it forms part of our revenue and quite rightly so. The government has forgotten about a small detail in all of this revenue, selling public assets to the private sector that can and in some cases have become part of the “globalisation” which includes foreign ownership of Australian assets. The horse has bolted and the government fail to admit that they have stuffed up and are trying to claw back the revenue anyway they can. The government and big business wanted and I guess needed to be part of the global economy but they don’t want the people to be a part of it. Tax havens for the rich are common place and part of an accept business practice for those at the top of town. I think the government needs to come down hard on the legal tax fraud that is taking place and not screw the end users, but that won’t happen because you have to look after your mates right?

[FenceFurniture]

I would be mightily interested to know how much Company Tax is paid by Harvey Norman. Not the Franchisees, or GH personally (although I'll bet that is way down), but the actual company. Do they pay their fair share willingly or do they do what so many other Corporations in Australia do and bury the income offshore through a gazillion companies all wrapped up in spaghetti?

There would be somebody who has the skills to find that out.

If GH has the country's best interests at heart before his own then I will be very very surprised. I'll be even more surprised if the whinging stops now.

[Beardy]

Maybe it is not so much about the GST revenue aspect but more used as a tool to try and make purchasing from O/S less appealing? The more money that stays in the country the more times it goes through the GST collection point to continue raising revenue.
It is very hard to come down on the legal tax “ fraud” of the bigger end of town even if they wanted to as if the terms become unfavourable for them here they will just pack up shop and operate from another more lucrative country and our economy suffers from the result.
The way I see it, I am not that fussed about how much income tax they pay even if they don’t pay any at all. The reality is that these type of people pay much more tax than we will ever pay via other tax levies, just not via income tax.
Look at the luxury car tax, land tax, the tax on their luxury boats etc not to mention all the GST they are paying on their disposable income day to day. Take that to the next layer of the jobs they have created and the tax stream that comes from those people so bigger picture they pay plenty of tax.....just not the one the media likes to focus on

[Cal]

I wasn’t meaning the individuals involved ie CEO’s etc as their income is due to the stupidity of the board and the shareholders, I mean the companies/corporations should be held accountable for the tax that is payable for the income that has derived from purchases that occur within Australia. None of that income should be allowed to be sent to off shore bank accounts in tax free countries as pure cream. That is the legal fraud I am talking about.

[aldav]

Cal's observations of his experience in the photography field are very interesting. We're a small market and even collectives of retailers didn't have the buying power to purchase at the 'right' price and yet the manufacturers find it necessary to set up as local distributors to ensure as much of the profit as possible comes directly back to them. Equipment in the photography field has changed enormously in the last 30 years, digital and all that, and margins, at the retail level, would appear to be more slim than they have ever been, but are the manufacturers making bigger margins than ever? H'mm, there must be a dollar in it somewhere and maybe it's just that the dollar has moved further up the chain.

Even though we're a small market there are a lot more buyers of cameras than there is of the specialist woodworking tools that we're concerned about.

[Cal]

There probably is money in it otherwise the manufacturers would just give up, as an interesting aside or insight to the digital revolution Nikon almost went to the wall near the beginning for trying to develop there own ccd sensor. Nikon initially were in the development of sensors with Kodak and Sony and once Sony got a handle on it all started to develop there sensor using Nikon cameras as they did not have still camera experience of their own. The partnership lasted about 10 years and Nikon were developing their own sensor without Sony knowing, Nikon eventually released a camera with their own sensor after throwing every last cent at the technology. The reason behind it was for high speed action photography, the processor that Sony were using could not handle the data the sensor was throwing at it fast enough to be useful for the demands of sports photography, anyway the Nikon sensor/processor worked well but it sent Nikon close to the point of bankruptcy. Nikon learned a valuable lesson and shared their technology with Sony who were able to then streamline the sensor and production while Nikon dug itself out of a rather large hole. Sony went on to buy out Minolta and the rest is as it stands today. Canon and Sony are the big boys on the block and have other streams of income unlike Nikon (who still do a lot with their lens technology)
I think it is still far tougher now than what it has ever been in business, there have been a huge quantity of companies taking over other companies in the last 20-30 years compared to in the past, just look at the automotive industry. There are more expectations of companies needing to turn an increasingly large profit for shareholders and directors and it just keeps snowballing, no longer are companies happy to have the same turnover/profit as the last financial year, they have to better it by what ever means it takes. Humans are a silly animal really, need, want, have to have. Richest one to the grave wins, apparently [emoji57]

[ian]

I don’t really understand where the government is going with the GST thing either, if we sell an item from Australia to somewhere overseas we and the buyer are quite with our rights to not apply GST on the item no matter what the price is. T
snip
The government and big business wanted and I guess needed to be part of the global economy but they don’t want the people to be a part of it.
oh I don't think that is the case.
Business (little and big) are part of the global economy, but it's not a "level playing field" (if such a thing exists) if consumers can slip by some of big business's costs.

with small value imports (<$1000), the "people" (and micro businesses) have been avoiding paying GST that any operation larger than a micro business cannot avoid because the larger businesses import quantities well above the current (to June 30) low value cut off.

Here in Canada, the low value cut-off is $20.
While no reasonable person should object to paying GST on a low value import, the collection of this GST should not be allowed to become a profit line item for the shipper.
For example, for goods entering Canada, UPS charge a sliding fee to "custom clear" and pay the GST on your behalf. The fee varies from $7.00 for a $21 pair of ear buds, to $51.70 for a package valued at $200 to $350, to $77.35 for a package valued at $750 to $1000. It's very difficult to see how UPS's costs vary by the value of the package. And because each of their delivery trucks is effectively a bond store, the duty itself is not payable till after a package is delivered and the duty collected so no monies are advanced on a customer's behalf.
And the other quirk. The end customer is allowed to take the UPS paperwork to Canada Customs and self-clear the shipment, in which case no "document preparation" payment is due to UPS.

what's the saying about ducks ?

[justonething]

If equity is the real issue then the Canada model should be adopted. Australia post according to afr is claiming it will cost 900 million to collect the projected 300m. Scmo is not open about the cost and issues involved with a foreign entity collecting gst. How's Amazon compensated? Amazon perhaps doesn't want to set a precedent of collecting taxes for foreign countries and the Oz market is not significant enough. I think this half cocked idea will back fire if it hasn't already. eBay on the other hand is collecting thru their .com.au domain and many items will be claimed as used anyway. It's all about pleasing large political doners like Gerry.

[FenceFurniture]

It's all about pleasing large political doners like Gerry.That's the long and the short of it, and is just another reason why all political donations should be banned - individuals and corporations.

Ian, I take it by "micro-businesses" you mean those under $75k turnover? GST is completely irrelevant for businesses larger than that because they claim back what they paid after they charge for their own product or service. However, for a <$75k the GST is a totally added cost that is not redeemable.

[BobL]

Here in Canada, the low value cut-off is $20.

It was here as well.

Back in the very early 90's I mail ordered some software (mainly games) from a Singapore PC shop advertised in a PC magazine. The software came on about 40, 5/25" floppy disks and AP called me in to ascertain the value of goods addressed to me as there was no invoice or value declaration with the goods themselves. When they called me in they showed me into a small room and shoved a brown paper covered parcel across a desk at me and asked me if I had ordered these goods. I immediately became worried that something else might be in the package but all there was only the discs with hand written labels on them. None of the AP officers had any idea of the value of the games themselves. I had no receipt so a value could not be determined but it then dawned on me I had a credit card statement and the original advertisement in a PC magazine at home so I went and got them. I forget how much I paid but it was something silly like $1 per disk which was about the price of the disk itself. An AP officer took the credit card statement, magazine and disks away and asked me to wait. About an hour later a senior AP officer came back and asked me some more questions. Then the original officer came back and said that Duty had to be paid on the disks themselves but as the duty came to <$20 there was nothing payable. It cost me 3 hours of time all up and as I didn't want to go through all that again I never bought any more software this way.

[aldav]

However, for a <$75k the GST is a totally added cost that is not redeemable.

While that is true and businesses not registered for GST have to make a margin on that unrecoverable cost they don't have to add the GST to any margin they charge on that initial cost of goods. So at the very least the final consumer isn't paying GST on the sellers net profit from the sale and there are possibly going to be some inputs that come into the sellers costs that do not have GST levied on them as well.

If the government was really serious about GST avoidance they'd be doing something about the black economy. The introduction of the GST was supposed to wipe out the black economy - what a joke! It actually made it a whole lot easier and more attractive space to work in. The only reason you don't hear Gerry Harvey bleating about it is because the people who do operate there aren't his direct competitors. So, like everything else, it all comes down to self interest.