Amazon Blocked In Australia: How It Affects You

Image: iStock

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's Official: Amazon US Website Blocked In Australia [Updated]

'.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..'

Read more

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.

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.

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.

Kindle impact

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.

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.


Comments

    Many countries has sales taxes and import duties, heck even some US states have their own sales tax.
    Amazon and other retailers have dealt with it just fine.
    This seems more like a move to force Australian buyers on to their AU site. They spent millions setting up here and no one's using it.

      Yep, something like 49 different local sales tax systems to cope with in the US alone. It's not that they can't, it's that they won't do it for Australia.

      Maybe if the range was better and the prices cheaper, people would use the local AU store.

    Agreed, although a big deficit in actual content isn't helping that case.

    Yay, so now I can buy the CDs that none of the retail stores in Australia stock or want to do special order for me, from Amazon Australia rather than Amazon Germany.....

    Wait... why is the Amazon Australia price higher ( some quick checks have found it ranging from 50% to 175% increase on the Amazon Germany price )....

    Oh! I see.... Amazon is using the same price gouging approach the local retailers have been doing all this time.... what a great time to be Australian.

      An here lies the problem.

      Since getting the email i've had to bring forward a lot of purchasing decisions because i'm sure as hell not going to buy for the prices asked on the AU store.

      Take LED lighting kits for example. I found what I needed and it would cost me AU$50 (incl shipping) from the US store. The exact same product on the AU store is being sold for AU$180 (incl shipping).

      I would be more than happy to pay the $5 GST, hell $50 extra is still nearly half as much as what the local retailer will sell them for.

      Though, worth knowing, while Amazon directly stocks a lot of things, they aren't necessarily setting the prices as its a service they provide to shopfronts on their site (like ebay) and just take a cut to facilitate. The example above is a local seller using Amazon as a service.

        Just be mindful of overseas electronics. Not all will have Australian standards certification.
        It might not seem like much but if your LED's weren't certified and they were the cause of a house fire, your insurance coverage will be void.

      Easier to buy FLAC CD-quality or better downloads from some of the vendors like Qobuz and use PayPal. Or even buy direct from the label.

    My Kindle account is with amazon.co.uk preceding the Australian site by some years. There's still no incentive to move here as quite a number of titles are simply not available here. Ditto music and other media.
    I wonder what happens with gift cards and other credit on those sites?

    In the last 20 years I've lived in at least four countries on three continents. Is my digital content now going to be less portable than my material possessions?

    Last edited 01/06/18 11:15 am

      Sadly “your” digital content is not yours.

        This is why I never buy ebooks.

        You don’t own them, and can’t resell them. And they can be removed from your device whenever the publisher wants. And you have no say in it.

          I also buy "unencumbered" ebooks - often directly from authors - who will provide them in a variety of interchangeable formats: mobi, epub, pdf .

          As @memeweaver mentioned, you can buy unencumbered ebooks. The distributor I buy a large amount from lets you fully download the epub and mobi file of each book, for manual transfer onto device of your choice.

    The change of policy for physical goods sucks, but I can kinda understand Amazon digging their heels in regarding the ridiculous GST collection policy - especially since they have an AU presence, however crappy.

    I queried amazon online chat regarding Kindle purchases - they said that the change only applies to physical goods and that digital content purchases from amazon.com won't be impacted, and therefore no access to existing libraries will be lost.
    While everything in online chat I tend to take with a grain of "does this person know wtf they're on about?", it was an immediate answer that I got (no "let me check on that") followed by agreement when I suggested that Amazon should perhaps post a clarification.

      The GST collection policy isn't ridiculous. Well, I don't like the fact we have to pay it on everything, even $1 items (I'd have set the limit at $100 but anyway). But the tax in general is fine, taxes exist and we have to live with them. And the concept of a foreign company paying our taxes is fine with me. What does get me is this;

      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.

      That's got to be outright bullshit. If it's going to cost $60 a transaction how can I buy a packet of gum in Australia for dollar? It's not like a big fee is going to be charged to the seller each time an item comes is sold. They'd be able to roll up all the transactions and pay the tax as a single lump.

      I'm not sure what the current duration (daily/weekly/monthly/quarterly/annually?) is in Oz but it's not like Big W sends a 100 million 20c and $1 and $5 GST transactions to the govt one at a time. It'd be no different for an overseas company.

      10% GST has been on digital goods for around a year already it's only physical goods that is now being enforced... and I believe is very fair...

      Companies have been given years noticed about this and for someone like Amazon to behave like this is very poor. they already rip of the local freight system in USA, pay low wages, and rip of Australians by not paying taxes for items sold in this country...

      Australians have some of the highest pay in the world, cost of business in Australia is also amongst one of the highest globally, yet we don't complain about overseas companies avoiding to pay taxes and taking Australians money with less and less remaining in our economy!

      I agree if prices are greatly higher something is not right but 10-20% is expected given our very high local costs IMHO... Also don't forget in the USA the price you see is often now what they pay like in Australia, we need to advertise an all inclusive price which is not the case there, when you pay for something you get hit with the additional charges! (In Australia you pay only the advertised price which must include all state, federal and local taxes..etc)

      The $60 cost per transaction is complete and utter BS... many on-line sites collect taxes and in the USA taxes change from state to state and some have multiple taxes ontop of this which they already accommodate for, so Australia having one flat and uniform 10% tax rate would be super simple to implement for Amazon and I would be very surprised if their current system would not allow for this as it stands already...

      Just my 2 cents worth...

    If you have a favourite seller on Amazon, find out if they have a online store independent of Amazon's store front or if they have accounts on eBay or other online sites.

    This may also be temporary too, remember there will be a few sellers/partners of Amazon who are going to notice a sudden drop in sales. That will motive talks and action behind the scenes for Amazon to do more for the Australian store, and motive UK and US sellers to apply their store on the Australian site also... which will promote more items, and lower prices. Hopefully!

    I can’t see Amazon surviving in Australia if they keep going the way the are. I reckon I’d have more variety if I ran a garage sale!

      No guarantee that'll work but good luck to you.

      But you'll still need a VPN and possibly a US-issued credit card to purchase them from the US store.

      Using Shopmate myself to get a phone from the US.

      So far I can't say I'm utterly pleased with the service - there's always one delay after then other, and I have no idea how long it will take to finally take delivery of it...

      Prices aren't awful - will probably cost another $50 for insurance and shipping to get it here (after they stop stuffing me around)

      Mind you, since Shopmate is affiliated with Aus Post, they're enforcing payment of GST when they reship; however other providers will probably choose not to comply with the new regulations, so you may pick up a savings there.

      Personally my biggest gripe with this whole thing is double taxing - you have to pay the full suite of taxes in the US (since you're effectively a US customer), and then get hit with GST to send it home.

    The HNT or Harvey Norman Tax. Just remember who has been pushing to try and make online shopping difficult and expensive in Australia the next time your are thinking about buying from Harvey Norman.

    Local stores do not stock the goods I buy, and many US stores have always refused to serve Aussies customers so this is a great loss to those of us who need something from overseas. I refuse to use HN ever since a superior salesman told me something displayed in the window of the games store next door simply did not exist and I was getting confused. Many of Amazon Australia's vendors think its a licence to print money and rip us off - try 4 figure amounts for a $30 book! So this is really going to help the piracy problem, if China and Alibaba/Ebay become our new best friends. Not happy, Gerry!

      I'd really like some more information on thos $1000+ dollar book you could get for $30.

    If Amazon etc gave in to Australia pushing for our GST, would not the rest of the world think of doing the same thing? I would think so. Few countries would say 'no' to having more income from the likes of Amazon etc.

    That is why it was never going to work...

    I liked that suggestion I read on ozbargain - it should've been something done at the banks. So when you went to buy something online with a CC or Paypal or whatever... 10% GST! But yeah, why not hassle thousands of vendors in tens of countries instead with a tax that's unenforceable anyway? Very silly idea...

      Some countries in Europe are looking into it, we're a bit of a test case in a way. Could be why Amazon is kicking up such a stink.

    My experience recently trying to get a specific item freom amazon just before this announcement and my experience in the past with trying to buy books form them is that Amazon rarely shipped to Australia from the U.S anyway.

    The whole thing to me reeks of blaming the Australian government for something that they already weren't doing and using it as an pretense to route all commerce through their crappy au site. No skin off my back as I've been using ebay instead. As for e/books - there's very little you can't find between a google search, IRC and your local library.

    ebooks? why not just vpn and buy them if thats your cause of concern?

    I have family in England and often use amazon.co.uk to send gifts with UK delivery included in the price, or add-on low cost local delivery to a UK address. I assume I will no longer be able to do this. Very annoying.

Join the discussion!

Trending Stories Right Now