Seven Examples Showing GST Isn’t The Problem For Australian Online Stores

Seven Examples Showing GST Isn’t The Problem For Australian Online Stores

A National Retailers Association report last week suggested that thousands of Australian retail jobs will be lost because offshore shopping sites don’t have to pass on the 10 per cent GST required of local stores. However, it’s hard to square off that claim against the reality that goods purchased from overseas are often cheaper by a much larger margin. Here are seven examples (one for each day of the week).

Picture by Charlie Brewer

The theme of GST being the reason retailers locally are doing it tough is a familiar one. Harvey Norman founder Gerry Harvey, for instance, is always banging on about it, though that hasn’t stopped him launching his own offshore store for games.

The NRA report contains some questionable numbers, and many news reports made the sloppy assumption that the 118,000 retail jobs it mentioned disappearing as a result of all possible factors were purely the “fault” of the low-value threshold, which exempts purchases of under $1,000 from overseas from GST.

But the real sloppiness is the assumption that GST is the only reason buying online is cheaper, and that otherwise we’d be paying much the same without going offshore. It doesn’t take much work to demonstrate that isn’t the case. Even leaving aside issues of customer service and range, buying online is very often cheaper by more than 10 per cent.

1. Books

A new release copy of The Hunger Games costs $12.95 from most stores. However, a quick search on Booko shows that you can get it delivered for much less; $8.07 from the UK Book Depository, or $9.99 from New Zealand-based Fishpond.

2. DVDs

Again using Booko, you can have a copy of I Don’t Know How She Does It for $23.27. Locally, EzyDVD charges $32.97.

3. Mobile phones

We noted recently and with some astonishment that the official list price for the Samsung Galaxy Note in Australia is $899. Local grey importers will sell it to you for at least $200 less. Can’t really blame the GST for that one (and even Samsung didn’t try that argument).

4. Fragrance

Myer will sell you 125ml of Joop! Homme for $59. Strawberrynet has it for $50.

5. Computer games

EB Games is offering Star Wars: The Old Republic for PC for $78. Harvey Norman’s Direct Import site sells the same product for $56. Even with $3.95 for postage, you’re ahead by more than 10 per cent.

6. HDMI cables

Harvey Norman will happily rip you off $70 or more for an HDMI cable. Head straight to eBay and grab one for a tenth of the cost.

7. TVs

Kogan is currently selling a 42-inch LED TV for $339 (plus delivery). There’s a catch — it won’t be dispatched until May — but given that the product actually attracts GST, it seems hard yet again to argue that this is the problem.

It’s a hard truth: the retail world has changed, and retailers have to adjust. Business models evolve; no path to profit is guaranteed. Complaining about the GST won’t improve customer service or business credibility.

Noticed other examples of this kind of price gap? Share in the comments.

Comments

  • I purchased a telescope from the USA in Jan. It cost me $4,900AUD including international shipping, including a plethora of accessories to compliment the scope.

    I have seen the same scope in a local store for $10,450.00, not including any accessories (Eyepieces etc). it worked out to around $13,000AUD for the Scope + Accessories in AUS.

    GG Australia.

  • I dont think 6 & 7 are valid points. What yo u find on ebay and kogan is not the same as what resellers are selling. Although there are plenty of examples of fragrance that have a bigger margin then the one you gave the example for. Makeup is another item that gets the australia tax put on top of it.

    Another point is the time frame. quite often its not available in australia or there is a delay. We live in a global economy people. News travels fast. We are not going to wait if we can buy it overseas and have it today.

    • Define “not the same”…

      The HDMI argument is a valid one, as they are all made to a common specification (currently v1.4). The only difference between various brands of cables is their visual design, and materials used to plate the connectors etc – both of which have zero impact on the resulting digital video/audio quality.

      I do potentially agree that the Kogan example is a bit flawed. These days, user interface plays a big part in choosing a unit, and not all panels are made equal. Kogan’s example is probably more one that flat screen TV’s could be cheaper if the top brands wanted them to be.

      • The harvey norman HDMI item opens another point. If you buy a $1000 TV from HN the sales person will tell you that you need $70 cables to get the best out of it. Complete nonesense of course, and a lot of people now know that. The staff are actively demonstrating that they don’t deserve the customers trust, or their money. We know that staff at HN and others will just push the product they have the best margin on, or excess stock, regardless of suitability. If you want the best, research and buy online.

        I went to buy fridge from HN the other day and declined to buy the extended warantee and surge protector that recommended by the sales person. The sales person got pi**ed off and said that HN would lose money on the sale. So selling the fridge is essentially a lure to get you into the store so a sales person can scam you on worthless add on products… Great way to do business!

        • man, I used to work at a Harvey Norman store in Southern Sydney, and during our staff meeting one morning, we were told that whenever we sold a laptop or desktop computer, we HAD to push to a certain anti-virus product (I forget which one now) due to the margin… the ticket price on the box was $140, but we were told that we could “make a special deal” for the customer and offer it for $80-90 in a larger sale…

          I found out later that day, that the discs were costing the store $3.48…

  • The computer game prices are outrageous.

    I got the collectors edition of Final Fantasy XIII-2 for $60 something bucks from zavvi
    EB were selling the same thing for $120

    Our dollar has been riding high for long enough that its about time these greedy pricks adjust their prices to a more realistic level

  • As a recent transplant to Australia I wish someone could give me a logical explanation as to why prices are so much higher here…as evidenced by this article and the comments so far.

  • These are all very lenient examples, which is a good thing. There are many, many more extreme price diferences out there and once people realise they can pay 50% less and and even less in some cases, they will start shopping online even if that same store they got the 50% price from is selling for only slightly cheaper, they have won the loyalty by having many products much lower than retail.

    The retail markup in this country is disgusting.. decidely un-Australian.. the profits the companies are making, most of which are large global companies not local ones, and the same ones making all the noise are not interested in the 118k jobs.. they are interested in their bottom-line and they are losing money hand over fist because of online sales.. people are waking up to their overpricing, just like people are waking up to other things because of the internet..

    If they want to get back in the game they have to stop overpricing/overcharging.. it’s that simple. Heck, even digital content sold through places like Steam have the prices jacked up for the Australian market.

    They only have themselves to blame and should stop whinging that they have finally been caught with their hands in the cookie jar.

  • Companies charge whatever the market tolerates. We *were* too tolerant. When the currency was bad that used to explain the bad prices of imported goods. Now the currency exchange rate is hugely in our favour and the retail shops are keeping the difference instead of passing on the currency saving to their customers. We’re not stupid though and we fight back via online sales – it’s good to give the big middle finger to the guys who are trying to rip us off. Great stuff.

    • Looking the the market 10 years ago versus today:

      – Reletively low Australian dollar.
      – Significantly lower availability of online shopping (especially on an internation level).
      – Greater security concerns over fraud and theft from consumers about putting their credit card details online.

      While geographically we obviously haven’t moved – Australia is pretty isolated from UK and America; we seemed to just “tollerate” that it contributed to higher prices here for so long.

    • While I agree with you in the real world lowering the price will decrease their current profit which in turn effect the CEO’s bonus at EOY…
      Solving this issue? lay off staff!

      Also the other big issue is the extremely inflated rents that landlords and westfields ask for but this isn’t talked about.

  • I’m all for achieving the lowest price on my purchases – but there are a few concerns which will often result in me buying close to home…

    – Clothes and fashion; with the exception of t-shirts, socks and underwear – I’m not a fan of buying clothes I haven’t tried on first. I know most sites give measurement tables to help with sizing, but that doesn’t go far to identifying if it will actually look decent on.

    – Warranty concerns; if whatever I’m buying is expensive enough to concerned with warranty – I’m immediately edgy about buying foreign. Not only will a warranty claim result in having to ship it back to the source, there’s a big grey cloud over the consumer rights I have when buying within Australia.

    – Damage in transit; touching again on shipping/warranty concerns above – there’s an inherant risk in shipping products globally. If you buy something from a shop front, you can usually check if it’s broken before you pay; if not, you can easily take it back. Problem is with the overseas market is they already have your money before you’ve even put your hands on your purchase.

    At the end of the day, if I’m buying a commodity item, where each of the above don’t worry me, then eBay and co are an immediate candidate for shopping – otherwise I’m stuck with the rest of the chumps paying far more than I should have to.

    • All good points but a counter argument is if the product is double the price like it is in many cases and it fails, you need to buy another half price product . Your not behind even then as you are only paying the same as the local price for two.

  • And outdoors gear! I have been buying stuff from the US and elsewhere for years often at half the price and the price of shipping was easily justified. Compare prices on REI, Moontrail, and others you can find on http://spadout.com to prices from the outdoors stores here, even the online ones such as WildEarth.

  • I think this article highlights the differences between brick and mortar vs virtual stores. The reason B&M stores have higher prices is they pay higher rent, wages, superannuation, insurance, import duties, shrinkage (theft) etc. Virtual stores don’t have to pay these costs so can afford to take a cut in profits in return for higher volume. There are many more factors than just GST to take into account.

    • Not so Mark. As I highlighted in my post above, even the online/virtual stores jack up the prices because “they can” and will continue to do so for as long as people tolerate it before going elsewhere. I used to think the same thing, that because it was B&M they were charging more because of the wages they need to pay, the rent, the maintenance.. but that isn’t the whole story.

  • LEGO!

    From the same site, just changing the region.
    Millennium Falcon – AUD$249.99 , USD$139.99
    Super Star Destroyer – AUD$699.99, USD$399.99

    last time I looked: 1 Australian dollar = 1.0482 U.S. dollars.

    WT!. Explain please LEGO?

  • Preaching to the converted here. Perhaps you should be addressing this to and getting comments from the people making these claims in the first place? A rebuttal is rather pointless without submitting it for comment from the person/company/group you are rebutting.

  • There is no reason that products made in China should cost more for Australians than they do for other countries – if anything they should be cheaper, because Australia is geographically closer to China. And yet we find a whole plethora of goods which cost a third to half (or even double!) the price Americans pay in our stores, and with the little retail competition we have here, prices are kept high.

    Why should we have to order something from America that was originally made much closer to home?

    I’ve been looking at buying a computer case here in Australia – AUS $265 + $15 shipping. Next I looked online, and Newegg are stocking the same case for USD $199 + $20 rebate! + free shipping! Then I looked at the origin of the case: Taiwan. A third of the distance, $100 more expensive. Do Australian businesses really think they can demand any price they want, and expect not to loose customers?

    • The difference is that the “local” companies in America order in MUCH larger quantities and get bigger discounts on the wholesale rate.. but that only explains the price markup for the local companies.. it doesn’t explain the price markup for the global companies, Woolworths for example, because they are buying huge quantities and shipping each of the different quantities to the different markets.. and shipping isn’t THAT expensive.

      Someone told me a story about bananas once.. it costs less send an entire ship of bananas that have been vaccuum packed and refrigerated across the pacific ocean from South America, than it does to buy it locally from Australian growers… shipping costs peanuts.. so that can’t be used to explain it away for these global companies.

      It’s all greed. Whether you’re talking about the global companies making a higher than average profit.. or the government over taxing imports and retail.

  • Shoes:

    Keen Men’s Shoes:

    Local Adelaide Shop: $200
    Online from Endless.com: $100 [including shipping from USA]

    I tried on the shoe locally and was going to buy it there, it had a pricetag of $100. When going to the checkout the assistant advised “that price tag is still left from our recent sale, the shoe is actually $200!” She then offered to call the main store to ask what she could do for me. Next I overheard her phone conversation that went something like”…okay, so I can sell it to him for $160!”.

    AND THEN she turns around to me and says: “I spoke to the main store and they agreed that we can sell it to you for $180!”. Fail! Hello Endless!

  • I started running 18 months ago and not having a clue what to buy, ended up paying $200 for a pair of good running shoes in a well known Australian retail store. I was happy with them so after doing a bit of research I ended up buying 2 more pairs delivered from the US for less than $170 TOTAL.

    Introducing GST on imported goods ain’t gonna fix this – in my opinion it will highlight the massive price exploitation even further! The current business model is broken.

  • Vehicle parts are another perfect example of this – 3 years ago I purchses some air springs from the USA – cost me $178 delivered to my desk in 7 days – the local supply was $350.( Identical item)
    Last week I purchased some parts from the UK – again delivered inside a week I paid 35% less than the local supplier wanted – and he did not have the item in stock, quoting a 2 week delay and wanting me to pay up front!
    There is certainly a lot more to the argument than simply GST.

  • I work in gaming retail, and while the pricepoint variances are huge between Australian retail and overseas online stores, the reason why is different from some of those items listed.

    Take Modern Warfare 3, on 360. Cheapest retail price is around $78, the standard is closer to $90. Ozgameshop sells the title at $50.99. The issue though isn’t that we’re all paying $45 and the online store is choosing to sell for less. It’s that publishers/distributors are cherry-picking prices and marking retailer purchase costs higher only for Australia. Retailers have not banded together to demand price drops, nor have the consumers, people are simply shopping where it’s cheapest, which is online. That means retailers have no legs to stand on to demand equal region pricing, and that results in the mass price discrepancies we see now.

    It’s disappointing because this is THE thing that is singlehandedly destroying games retail in Australia. Soon, and by the news about GAME it will be really soon, there will be less specialists left, less variety and less competition to ensure competitive pricing. The sad fact is when a distributor is charging $70 for a retailer in Oz to purchase, and yet only $45 for an overseas retailer both online and store, in my mind they are price gouging and if not illegal, to me it seems unethical. They must know they are choking the game retail industry and squeezing what they can out of it before it disappears just like the majority of the game development industry.

    And there’s no reason for it besides the greedy fact that they can, and get away with it. This is not a rant to say that businesses should not want to make money, that’s extreme. My point is publishers/distributors who sell games to Aussie retailers are choosing to hike their prices only for our region and purely because they can get more money out of us. They don’t seem to care they are driving our industry to the ground or feel responsible for it, I just think there should be some kind of social responsibility for that. Because if retailers were paying as little as overseas reseller were, there would be NO SUCH price differences.

    I can only speak to my specific part of the industry, but so many customers come and ask us staff or make really rude disparaging comments about store prices compared to online, but the simple fact is we have to pay more – and someimes only just break even on price vs costs – and thats why you do too. Why not support action or campaigns targeting or even shaming publishers/distributors into aligning region prices and we woudn’t have this situation.

    • Well written mate and spot on the mark. I work in games retail too at a ‘specialty store’ and can sympathise.

      I think another example might help people here too:

      Modern Warfare 3 is $50.99 from Ozgameshop currently with FREE shipping.

      When it was released here, the RRP for it was $119.95 with most retailers having it on sale for $88-98.

      The actual COST of the game FOR THE RETAILER to buy (our company anyway) from the supplier was approx $90. In fact most new releases that have a RRP of $99-$120 have a cost of between $78-92.

      So as you can see, the margin that these retailers make on new games is very low! Especially since to stay competitive, games have to be on sale when they’re released. Selling a game that costs $90 for the retailer to buy for $88-98 to the customer is insane.
      (Yes here $88 is less than $90 but many retailers like JB sell at a loss and make up the margin through other means.)

      Now continuing using our example of MW3, when it was released: ~$60 was the price that Ozgameshop were SELLING the game for (NOT their cost price). Given that a retailer BUYS the game for $90 (IS their cost price), you can see that the distributer/supplier is taking a HUGE chunk of that money due to pure greed! $30+ difference for a game is huge! And there is absolutely NO reason for this!

      Its no wonder grey imports are gaining more and more interest from companies.

      So it should make more financial sense to just grey import ALL your stock right?

      The problem that game companies have (and other retailers too!) is that if you grey import all your stock, you cut off the distributer/supplier and in turn piss them off! And so, in a games scenario, the company that grey imports gets cut off from bonuses and extras such as merchandising, support, advertising and bonus content (Read: NO pre-order DLC or Collector’s Editions).

    • This is the only part where I agree with you “Why not support action or campaigns targeting or even shaming publishers/distributors into aligning region prices and we woudn’t have this situation.”

      Other than that the world has changed and retailers need to adapt not just expect consumers to pay, and while Its easy to presume it’s bad to close up shop and move online the retailer will still require staff to manage the warehouse.

      • I agree retailers need to adapt, and the proof is in the day-one markdowns on titles and massive push in online store offerings.

        I disagree that we, the retailer, expect you to pay. We kind of don’t because we’ve marked the stock to cost price or $5 above it, the absolute lowest a specialist could go. Also, I pose the question as to how you would like to see retailers adapt? If the supplier demands a higher price and we don’t pay it but grey import, as said before this angers the supplier, and not only can they limit pre-order bonuses and deals which endangers our future income, but they can at will choose not to supply at all because they have supermarkets to offload stock to. I’m not seeing a way apart from challenging suppliers on their pricepoints to help adaption along, and that’s sad because we’d absolutely dance for joy if we could also sell MW3 for $51.

        The funny thing is the suppliers don’t seem to realise that once specialists and indie stores start to go, they will then have to deal with the supermarkets turning the tables on them and being the ones to set the ‘rules’. This would mean slightly lower prices for a short time, but inevitable less variety and less competition to keep prices lower longer term.

    • Well said hummingbrid.

      This is simila to the response I received back from Lego Australia when I asked them about the price discrepancy between Australia and the US:
      “The prices of LEGO products vary around the world, and are determined by careful evaluation of local factors such as government taxes, transportation costs, exchange rates, market conditions and the cost of doing business. It is, therefore, inaccurate to look to U.S. pricing as a means of measuring anticipated Australian price equivalencies.”
      So the price is set back in head office in Denmark. They still wouldn’t explain to me the 75% markup of Australian products over US products.
      Super Star Destroyer – AUD$699.99, USD$399.99

      So until global companies stop the unwarranted gouging for the Australian market, I, as a consumer, will choose to source products from outside Australia.

      • It’s sad that the only way it seems to fight against the pricing issue is to not shop in Australia and strave the local industry, but I fully support you doing what you can, or have to, to get the best deal available.

  • Sometimes retail prics are bullshit, recently, i purchased a new shaving head for my shaver, if i had gone to the shaver shop $80, but i managed to buy it from eBay $45 + $5 postage, and i purchased Uncharted: Golden Abyss for $50 + free delivery where it retails for $68.

    Thats the thing, with buying online and retailers unwilling to change, retailers are going to put themselves out of business.

  • Is it the stores making all the money… probably not, the question is, is it the wholesalers or the brands that make up the high prices… apple has finally alined itself to more golbal pricing and I’m sure more will move soon enough… eg ATV3 US$99 AUD $109 (99+GST)

  • Unless you work in the industry or have dealt with the Chineese Suppliers directly you have ZERO idea of how it works. The Chineese will not sell to Australia at the same price they sell to the US or Europe, and your argument is redundant about the dollar being high as the Chineese will increase the price in line with the rise of the dollar. These are the facts and Australian retailers are the one reported to be the next mining magnate, have a look in your street see how many people who own or run retail stores have flash cars or boats in their driveways or live in a mansion. The reality is that while we are held to ransom by importing everything we will always pay more than anyone else regardless of what you imagine

  • Surprised no one has mentioned Adobe. For Photoshop CS5 extended:
    Australia: $1168 AUD
    USA: $699 USD ($664 AUD)
    Compare with Canada: $699 USD
    UK: £657 GBP ($990 AUD)
    Thailand: 24808 THB ($764 AUD)
    France: €1015 ($1274 AUD)

    • I was reading thought the comments, intending to mention the atrocity that is Adobe Australia. They have moderated their stupidity somewhat with Lightroom, so why they haven’t followed that with their other products is bewildering. (Yes, I bought a legal copy of Lightroom once the price became similar to the US price – you can’t buy from the US store as it locks you out on the basis of geography.)

      The idea that the same software, downloaded from the same servers, is somehow worthy of a vastly inflated price here in Australia is obscene.

      • Heh, like you I was wading through the comments to see if someone ANYONE mentioned Adobe so I could also tell them about the awesomeness of the new pricing of Lightroom 4 – AUD$187 as opposed to USD $149.

    • Adobe Creative Suite was even worse… Until recently the price discrepancy (assuming US$1 = AUD$1) was more than double, even including GST. And this is for a product that costs thousands of dollars, and is a digital download coming via the exact same servers as the U.S.

      I should note that this pricing policy has been changed recently! For those who have been lamenting this stupidity, I just bought a legitimate CS5.5 upgrade for only about 20% more than US pricing… from a local seller (softwaretime.com.au).

      For those who had to stomach the pricing and had no choice but to upgrade sooner, my condolences.

  • Prices are set on a wide range of factors. Aussies are amongs the highest paid people in the world. To put a product on the shelf it goes though a lot of people

    – The wholesale workers make more money, that adds to the cost
    – The distributor workers make more money that adds to the cost
    – The truck drivers make more money – that adds to the cost
    – The retail workers make more money – that adds to the cost
    – As petrol workers make more money , fuel is more expensive – that adds to the cost
    – As centre management staff make more money, rent is more expensive – that adds to the cost
    – As utility workers make more money, utility costs are higher -that adds to the cost
    – etc., etc.

    If you look at our prices compared to average wage, we not really any different to any other country. Teachers in some states of the US earn $31k in their first year, and $42k after 25 years. In QLD they get $61k in their first year.

    If Australia wants lower prices, campaign for workers wages to be cut in half. Prices will go down.

      • Wages aren’t the be all and end all of “what stuff costs”.

        Fact of the matter is, retailers are there for consumers; the customer. Customers don’t have a duty or responsibility to retailers – and if they can get a better deal else where, then they should be allowed to do so.

        Bleating about “online sales” killing their businesses won’t make a huge difference in changing things. Changing their business model so they can be competitive will keep them in the game will.

    • Bit of a chicken and egg thing to be honest.. if things didn’t cost so much, the wages wouldn’t need to be so high and if the wages weren’t so high, then things wouldn’t cost so much.

      The price of commodities should reflect that of the average wage earned in a country? I don’t buy it.

      • so what your saying is if a companies overheads are higher (due to higher wages and the knock in effect it brings) the cost of the component should still be identical to that of a country with cheaper wages?

        So every country including America and the UK (where the bulk of online shopping occurs) are getting ripped off compared to China for example.

        You need to compare like for like and the buying power of a dollar in its own country. An Australian dollar here less then a Dollar does in America. Just like some currency’s have simple things like a bottle of coke cost houndreads or thousands of their currency.

        With my fuel price example where Australia were listed as the 4th cheapest you need to look at it like this. When you compare the average weekly income for a group of countries, then purchase 50 litres of petrol and look at how much that costs as a percentage of the average weekly wage, you can begin to understand how and why things are/appear cheaper in other countries.

      • So are willing to take a wage cut to get cheaper pricing, take your head out of your arse it’s exactly what the main reason is for pricing.
        The old “Big Mac” test is the best way to gauge what is true value aroung the world.
        It’s about $4.50AU about $3.50US about $4 Euro’s all relative to wages

  • Amen to that Anthony

    While yes some industries are quilty of jacking their prices up unrealisticly (adobe) others had the issue is Smaller consumer market, higher overheads (rent, insurance, WAGES) and this does add up

    I have worked in 2 different sectors or the retail industry and also in the wholesale industry for those sectors. In 1 of them the wholesalers all passed on the difference in exchange rate, and each new order that came in would be priced accordingly to the exchange rate paid. Their profit was good, not great but acceptable. but without business making strong profit what do we have (banks in EU and US are a great example). The other did not fluctuate their prices with the exchange rate us much, and had higher margins.

    I recall reading a paper from a few months ago detailing the true cost of petrol in each country (it took into account the average wage, average cost of petrol, etc) Australia came in at 4th cheapest. I will attempt to dig the report up, was a great read.

  • I bought 2 XBOX games the other day from a UK online retailer. Super Street Fighter Arcade Edition and Gears of War 3. Each of them cost me $23 AUD with free shipping. Currently I cant seem to find Gears of War 3 cheaper than $50 anywhere in Australia unless its on special. Go figure.

    • This I answered for you in the first page of comments. My retail brand paid anywhere from $82 at release to about $47 now, which i why you’re paying *only* $3 more if purchased at $50.

      If Australian retailers were paying the same cost price as that UK online place, you’d also be paying either the same or $5 more.

  • Hardly any retailers were actively ( at least in the consumer perception) ever trying to get a better deal for us, and if they did – they never passed on the margin and everyone was happy/still happy to allow things like region encoding actively restrict the product market for that sale of a particular item. This also reduces competition, or collective bargining or even franchise bargining cross regions.

  • The 3 biggest reasons for me to shop online are:

    1. The living in Aus tax – outrageous markups compared to US
    2. parking is a pain. Nearly been killed a few times just over a damn parking spot.
    3. poor/rude/non-existent service.

  • A great number of these examples are caused by the *wholesale distributor*, not *retail*. Have a look at the Lego or Adobe products listed with different prices from their websites, if you change the region. This has nothing to do with *retail*!

    I challenge Lifehacker to stop pursuing retailers pointlessly in many cases and pursue the distributors. Did you ask Samsung why their Galaxy RRP is so high, Gus? Why is that a retail store issue? (Hint: it’s not).

    Did you ask the Australian distributor of SW:ToR the cost to stores so you can establish the massive margin the retail store is apparently making? (hint: they’re not).

    Come on – let’s see some real journalism!

    • I’m pretty sure they did ask Samsung why the Galaxy Note RRP was so high. I agree with you, we need to put it back to the companies, especially those that have no reason to charge us an ‘Australia tax’

  • I’m still trying to find an Optus or Vodafone outlet in my area that has a Samsung Galaxy Note I can have a look at. I will probably get mine from Mobicity. $649 is way better than $899.

  • GST isn’t the problem, new competition is, that being said I don’t necessarily disagree with international companies paying Australia.

    Retail needs to play to its strengths, providing a space to try, test, explore and learn about a product as well as supplying instant gratification and impulse buys.
    Strawberrynet is great but how can you find a new fragrance you like without smelling or fit clothes properly without fitting rooms?
    I bought Red Dead from Ozgameshop via Ebay but ended up buying a 2nd local region copy to be able to use the DLC available on PSN, and you don’t get the 1 week, no questions asked return policy like at EB Games.
    And if you have the itch, need a last minute gift or just want it now, only a store front with come up with the goods.

    Retailers like Harvey Norman are actually reasonably well positioned to service the aging population who will pay more for just a little extra purchasing confidence but that is only half the picture.

    If rather than having all wall space covered in product, some was used to provide information and confidence about the products, minimising the need for fully paid staff to answer FAQ’s, the minimally staffed store could focus on the function of the quick check out for those ready to buy and minimise the costs added onto wholesale. A step further and stores like DS could develop a whole paradigm of products within its range suited for the average, don’t have the time to learn user and win by empowering them to think “I can work it, it was good value and it does the job well”.

    If retail doesn’t figure out that mores sales pitches does not equal more service as well as compete, on price somewhat, then it deserves to die out.

    • From someone working behind the counter, I can say that in my experience and in my little niche are of gaming retail, the main issues with Interective Display units make them, on average, widely non-profitable to have.

      We have 4 consoles in our store for people to play and try, and the resulting sales from those are minimal. Most customers come in already having made a selection and either want specific details filled in or just confirmation to buy. Specific details means things like Play TV, HDMI quality and compatibility, genre games suitable, etc. All of these details are clearly available on product websites, retailer websites to a degree, and on packaging themselves in the store. The thing is a lot of customers seem to choose not to read them, but come in and talk to me, and in 20 seconds it’s cleared up. Which is absolutely fine with me because that’s why I’m there, and I love working out what people are after and helping them if needed to pick consoles based on family/budget/peripherals etc, but this makes having enough staff valuable. Confirmation to buy is simply they think a game may be good, and we can give immediate feedback or reassure a customer the game is the genre, age level, or difficulty that they are after. Most of this they could easily glean from gaming review sites, youtube, or the cover as well, but a lot of people choose to talk to staff for immediate info and answers to questions. This isn’t to say this is what everyone does, but we’ll offer the help and you don’t have to take it. The other side to that is the educated shopper who knows exactly what they want/need and don’t need my help at all!

      Also a lot of display units get broken, overheat, or encourage time-wasters which all eat at productivity or income. My experience is people rely more on me knowing what the hell I’m talking about and being able to answer questions accurately and honestly rather than using a display unit.

  • The items you have picked are poor examples. I recently bought a Safari Snorkel for my 4WD from the UK for £160 delivered. The best local prices were between 4 and 500 Aussie. I knew the product was Australian but when it arrived, at such a massive discount, I was shocked to see it has made in Melbourne stamps!!!!! I bought something made locally from the other side o the world at a massive discount.

    Aussie retailers are stuck in a high margin low volume world. And with too many importers taking a slice due to our small market.

  • This week I bought a Nikon Coolpix AW100. $450 in the Ted’s Camera’s shop. $216 online. The only things I buy from shops these days are clothes and food, everything else I go straight to Google and shopbot.

  • Bicycle parts. They are available in the UK for 50% or less than the local prices. The bike shops freely admit that parts are cheaper on the web than their wholesale. this is with free delivery for orders over about $70 that arrive in about 2 weeks. No brainier for me! Eg just bought 2 tyres and tubes from the UK for $70 – less than the cost of 1 tyre locally.

  • I looked at some Brooks running shoes at Athletes foot last week. They were $249 The sales staff were excellent and I really wanted to buy them there – I was prepared to pay $20 or $30 more but when I checked online Zappos had them for $110 less including free postage. Kind of makes it too hard to resist.

  • Same went to a music store to buy a midi drum kit. They “couldnt” do any better than 600$.. i boguht the same kit.. from ebay… from a Melbourne Music Store for 350$ new. Oh they have good service to.

    What a joke some companies are… they just pretend we have no idea what it costs them… but yer..we do.

  • It doesn’t matter whether the fault lies with the retailers or the wholesalers/distributors. At the end of the day the customers are the ones getting screwed by the overly high prices. As a result the customer will look elsewhere, which they are well within their rights to do so. The Wholesalers rely on the retailer and the retailer relies on the customer. If the customer goes elsewhere they both suffer.

    The retailers need to stop blaming the customer, and the government, and start looking for the real culprit. There will always be a place for retail outlets. If the current ones can’t survive with the way the world is today then they will go out of business and be replaced with ones that can.

    The real problem is they have all had it too good for too long, and trying to hang on for dear life to their margins. They keep trying to get us to feel sorry for them and shop locally as a result of some misplaced loyalty or by spreading fud. Since when did it become our duty to prop up dying businesses? I don’t care why they are dying, or what they do, if they provide a necessary service someone else will fill the gap, if they don’t, then why should we keep them alive?

  • hey guys… for games ozgameshop.com is great… its from the UK, i think its free shipping and the games are like half price… i don’t know the situation with xbox games but with ps3 games they sell the exact same disc over here as they do in europe… so yea no problems with dlc either

  • Here’s 2 more not yet mentioned; Specifically –
    Yamaha Silent Guitar – AU$ 1100 ; USA price around $550 ! ( assume shipping $100 and its still massively cheaper)
    Mercedes ML63 – AU$ 153,000 odd ; USA $95,000 ( and their $ is weaker !!)

    Sorry, its not GST that’s the issue – its protectionism; the gov’t are levying charges ( eg ‘luxury tax on cars over $57k ) to protect inefficient home industries and chains. ( the latest is the $275m injection for Holden because they can’t complete ( technically) with Euro cars…
    The other price differences on general goods are simply because our local market ( called distributors) are just stuck with their island mentality – and are trying to prop up piss-poor service and 20th century marketing & sales methods for waaaay too long.( online catalogs – I mean there’s a joke!)

  • Everyone who sells into Australia does the same.

    Look at Microsoft for instance, they sell their MSDN Operating Systems subscriptions for USD$699, yet change the country to Australia and suddenly it jumps to AUD$1240!! What is even more interesting is that if you change the country to say Hong Kong, the price is cheaper than the USD amount (USD$696) – yet MS sell more into AU than they do HK. Last time I checked HK had the same standard of living and same wages as Australia does and a comparable tax system, so cost of living and taxation as an excuse for pricing differentials is a furphy.

    The real reason for the disparity is that the pricing is set in conjunction with the local distributors and they feel the need to ramp the price up to double what others anywhere else on the planet pay. If you wish to point the finger, point it at the greedy official distributor channels – for it is they who are killing retail in this country to save their own bloated margins.

  • All of the Aussie big name retailers have been losing out to online sales for a few years now, resting on their laurels that their business model is correct and everyone else is wrong. Now they are complaining that this online shopping is hurting their businesses. It just shows how pig-headed these retailers have been (Harvey Norman is the worst), putting their heads in the sand unwilling to change. Most of the rest of the worlds retailers have done it (macy’s, M&S, bloomindales etc…) and are thriving. Now the aussie mobs have to play catch-up to the rest of the world and i believe they have missed the boat already and will be left behind. I haven’t been into a bricks and mortar store for about 2 years and don’t intend to deal with paying for car spaces, whinging children, crowds, poor customer service and high prices. High prices may be because of high prices from distributors and high rents but I really don’t care if an Aussie business cant compete (or doesn’t know how to). Why should i pay more for a product i can purchase cheaper O.S. because the aussie distributors are ripping off the retailers? As a Purchasing manager its my job to get the best price for my company, so if i can get the same product cheaper elsewhere I do. Don’t other businesses do the same or are they content with their failing business model.

  • I purchased MAC makeup overseas. I spent $800 in total purchasing singular products (no bulk buy discounts) – managed to buy pretty much everything that I will ever need. That included shipping to a US address, and forwarding it to my Australian address. The purchase was from the official retailer, from an official store (no warehouse, etc). The value of the same products in Australia came close to $4000.
    I managed to save over $3000 in one purchase alone!
    My partner and I are even considering buying our engagement rings overseas. For the same quality diamonds and gold (certified), we can afford to fly 1/2 way around the world, purchase the rings and fly back for the exact same price! Anyone up for a free holiday? Talk about a romantic way to propose…

  • It’s good to see another site getting the word out about unfair pricing. But your example for games failed to show the true injustice of it. The big titles cost ridiculous prices in Australia. For example:

    CoD:MW2 – $89.99 in Australia, and only $19.99 in America
    (Note that CoD:MW3 came out a in November last year).
    Medal of Honor – $69.99 Australia, $19.99 America.
    RAGE – $99.99 Australia, $29.99 America.

    Furthermore, the Australian dollar is currently worth MORE than the American dollar. This is ONLINE, where you download a game at no expense to the distributor, infact, I even bought a game for less in-store (but still far more than the price in America).

Show more comments

Log in to comment on this story!