Amazon has announced it will be blocking Australians from its international sites and limiting us to to the much smaller amazon.com.au, saying it’s all about compliance with new GST rules on online purchases. Whiles there's support from one quarter, most people are pretty angry at Amazon.
It was the move we all dreaded was coming. Australian shoppers will no longer be able to shop on Amazon's US site as the company shifts focus to its local offering. You have one more month to make your final overseas purchases.
At the moment, you only have to pay GST on items bought from overseas retailers worth more than $1000. But local retailers have rallied against this saying it's not fair. From July 1, if you try to visit amazon.com, you’ll be redirected to amazon.com.au. So much for embracing the global economy.
Anyone who has shopped online over the last decade knows the difference between local and overseas prices has seldom been the GST. The reality is that anyone who buys goods overseas knows we often get fleeced locally with greatly inflated prices and less variety.
Retailers are happy
The National Retail Association (NRA) has shot down criticism saying Amazon’s decision to block Australian shoppers from their US and UK websites is proof that local retailers can compete with the online giant when operating on a level playing field.
At least one estimate puts the cost of the cost of collecting the GST At around $60 per transaction. So, it's not clear if the decision even makes economic sense.
But NRA CEO Dominique Lamb said "Amazon’s announcement demonstrates that Australian retailers are more than competitive with international rivals when operating on a level playing field".
That doesn't make sense given the price disparity we see is often far greater than the 10% GST that's on items purchased in Australia.
I bought a pair of shoes in the USA a couple of weeks ago. Even factoring in the exchange rate, US taxes and fees for using my Aussie credit card overseas, I still saved over 30% on the purchase. So, the GST argument made to and accepted by the government is, quite frankly, BS.
The local Amazon store has barely made a dent in local retail as it sticks a far smaller variety of goods compared to overseas stores and the prices aren’t all that competitive. For example, my family is into LEGO and we can usually get better prices at local stores.
It's not just price
Dan Ross, from Optimizely, says a big part of Amazon's advantage is that the retail giant makes it easy to transact with them. He says "Price and range are symptoms of what Amazon does really well'.
That's something plenty of people agree with - and it's what we lose through this decision by Amazon brought on by a policy that decreases options for consumers and makes little economic sense.
I just tried Amazon Australia for the first time the other night and it had almost none of the goods I was looking for and when it did they were 3 times the price. It was cheaper to buy US and pay an import fee on every single item than buy through the Australian one. https://t.co/imozCM1D6q
— Jen (@juniperlilacs) May 31, 2018
What the legislation effectively does is remove competition from the market. Rather than working with retailers to give consumers greater choice, the government has continued created a protectionist policy.
Consumer backlash against the decision has been swift. This tweet is just one of hundreds expressing anger at Amazon's decision.
I see Amazon have decided they will stop shipping to Australia from their US store on July 1 because something something tax something.
If you think that'll make me use your overpriced and *very* understocked AU store, gosh you have another thing coming.
— Cameron (@camulust) May 31, 2018
Interestingly, as we reported yesterday, Ebay says they won't be restricting overseas vendors from selling goods to Australian cusotmers. Instead, they plan to have a GST-friendly solution in place.
"This requires major changes to eBay’s global systems and we are working to have these ready by 1st July," an eBay spokesperson said.
One of the big casualties in this will be e-books.
If you have purchased books for your Kindle or Kindle app from the US store, then, you may find access to them severely hampered, particularly if you need to move them to a new device at some point. The nature of e-book "ownership" is more akin to purchasing the right to read rather than owning a physical copy. So, access to books purchased from amazon.com will be an issue.
So, according to @Amazon, if I want access to the FIVE THOUSAND ebooks on my account after July 1st, I can never buy another book again. Literally the options they are giving me right now because they can't port the books over. What. The. Fuck.
— Aislinn Kearns (@ardentaislinn) May 31, 2018
If you had any ideas on using a VPN to bypass the restriction on Amazon - forget it. Even if you access an overseas Amazon store, they won’t be allowed to shop locally. So, you'll probably need to use a freight-forwarder to get stuff transported to Australia. Or get a friend in the USA to do the shopping for you.
It’s a shame that the government decided that consumer interests were less important than retailers.
In the mean time, you have a month or so before the shutters come down on amazon.com in Australia.