The Australian Bureau of Statistics has inadvertently re-ignited Australia's Internet shopping debate by trying to get a handle on how much Australians might be spending online. The scale of Australia's Internet retail is ill measured and hotly debated, not least because bricks-and-mortar retailers squealing the “Internet ate my …
And yet again,
I am forced to order in parts from offshore because I can't find a local distributor who will get back to me with a quote once they realise I am a small customer and won't be ordering enough to make them rich. Too bad for them I am also responsible for ordering the same type of materials for a company that is likely also potentially their biggest customer.
It isn't easy
being a retailer in a bricks and mortar store, but the taxpayer is under no obligation to underwrite their profitability. Sure, disadvantages include council rates and cost of sales staff, to name a couple. On the other hand, advantages include the ability to offer the customer in store viewing of items, personal attention, simpler refund procedures, avoidance of shipping expenses, a perceived lower risk, etc.
As it turns out, internet purchases are best suited to low cost (i.e. low risk) lightweight items that you are likely to find on eBay, while brick and mortar stores are best suited to heavy, expensive items.
The Low Value Threshold acknowledges an already existing situation. Perhaps physical stores should adapt to the reality that virtual stores are better suited to some products, and should concentrate on selling everything else.
The so-called 'bricks and mortar' shopping industry has dug itself a huge hole in much the same way that music companies have.
The industry built a certain structure to exploit the conditions that existed pre-Internet shopping. It revolved around the various links in the chain being gate-keepers, using restrictions and inflexibility as a means to dictate terms - restricting competition and thereby allowing them to keep prices artificially high.
It's unnecessarily wasteful and results in higher prices for consumers. But, the conditions were such that customers were forced to accept it.
Internet shopping has allowed individuals to bypass the deliberate restrictions and anti-competitive behaviours of those gatekeepers but now those gatekeepers are complaining that they are being hard done by.
What we see emerging, though, are those same restrictions being applied through the online shopping system with certain vendors preventing online store overseas selling their products to Australian customers, thus (again) artificially restricting the way consumers can purchase goods.
Competition trims fat and (hopefully) makes things more efficient. The old structure deliberately restricted competition and those responsible grew very fat indeed. Now (too continue the metaphor,) they are too heavy to compete in the newer, lighter environment of internet retail so they are trying to hobble their competition rather than, well, compete.
. . . That said, I realise there are lots of smaller retailers out there who are essentially in the same position the consumers are in.
It's not a great situation.
The most annoying part of it all is that these companies are able to outsource production, support and even shift their profits around through overseas subsidiaries to avoid paying tax, but they seem determined to restrict consumers to purchasing through one designated chain rather than shopping around for the best price.
The "official" excuse here in NZ for fleecing the public with a markup of anything between 200 to 500% for is: "We are a small country". My observation is that they are just plain lazy and want to rather make lots of money of a few sales instead of lowering their extravagant profit margins and make it up on increased turnover.
So what are the other excuses (bar the lame GST excuse we get to hear too) there in Australia?
Nope, that seems to be about it for us too.
Except for the one Microsoft rep who simply stated they charge what they think the market will bear. Or was that someone else? It all turned into a spinning blur before too long.
Tyranny of distance.
There is a strong incentive to keep your offshore purchases under $1000. If you go over that limit, as I did recently, the GST is the least of your worries.
First you have to fill out the Import Declaration form. This involves finding the correct code from 96 chapters of documentation. (for those that need to know, the Reference Number for a 3D printer is 8477.59.00. Its statistic code is 90. You'll need both)
You will need to pay an additional fee for the privilege of having your form processed.
You will need to get your US supplier to provide a "Statement of US Origin" so you can take advantage of the free-trade agreement and avoid any customs duty.
Then wait 3 weeks from the day your parcel arrived in Australia before finally getting the notice that it is available at your local post office.
No wonder they decided its not worthwhile trying to collect the GST of smaller items!
We get availability b.s. in Canada too
The Asics company makes certain athletic garments in the US. These are readily available in the US from a number of online retailers, but every last one of those retailers' websites states that they will not ship to Canada (among many other countries). Presumably Asics has given exclusive distribution rights to some Canadian company and has done the same elsewhere.
The fly in the ointment is that there is NO online source for these garments in Canada. And they are low demand items, so it's futile to look for them in local brick'n'mortar places. Perhaps they're available retail in the larger cities, but not in the burg I call home, where we are isolated on an island. This is par for the course in Canada; prices are significantly higher and selection is significantly smaller even when you do find a Canadian source for such goods.
Result: Asics does not sell as many of these garments as it might, and its competitive position regarding them in Canada is non-existent. And would-be buyers like myself are forced to use complex, costly workarounds to import them from the US.
Re: We get availability b.s. in Canada too
US restricts EXPORTS of some stuff, eg software, as a copy of a 15 year old operating system might be useful to some terrorist somewhere. If I need software I send money to a friend in US who buys it online then repacks it and sends it to me. You could do the same with Asics -- send the friend the link to the order page for what you want.