Dear retailers, when prices are 60% cheaper offshore, GST won’t save you

Amazon packageTough talk from the retailers, who continue to demand GST be applied to all purchases.

It’s rubbish of course. 10% GST is not why people are shopping online.

Let’s take the example of my last Amazon UK order, which I placed when the AU dollar was at its height, about two weeks ago.

  • Book: Neil Gaiman’s “Neverwhere”. UKP 4.46 (AU $6.96). Cheapest AUD price (via Booko, looking only at Australian outlets) $15.95
  • Book: “Wiped! Doctor Who’s Missing Episodes”. UKP 12.69 (AU $19.81). Cheapest AUD price (via Booko, looking only at Australian outlets) $27.51
  • DVD: Red Dwarf series 1. UKP 4.58 (AU $7.15). Cheapest AUD price (via DVD Plaza, excluding postage) $35.55.
  • DVD: Red Dwarf series 2. UKP 4.58 (AU $7.15). Cheapest AUD price $35.55.
  • DVD: Red Dwarf series 5. UKP 4.17 (AU $6.51). Cheapest AUD price $35.55.

So, the total Amazon order cost was UKP 30.48 (AU $46.87 — may not match prices above because this is what I actually paid; above is the UK price I paid, converted using the exchange rate from a couple of days ago), and because it was more than UKP 25, I got free postage.

The total Australian retail price if I’d bought from the above, and assuming I’d been able to get the cheapest online DVD price at a retail outlet (and therefore avoided paying for postage) would be AU $150.11.

In other words, ordering online was less than a third of the cost of buying locally.

Now, of course this is influenced by many of the products originating with UK publishers. But even so, we’re talking about a factor of three.

Even if the AUD to UKP fell back to, say, 50 cents to the pound, and even if 10% GST was applied to everything, it’d still come out at AU $67.06; still less than half the Australian retail price.

So, sorry Australian retailers. GST is not the problem here. The whole pricing model (including the publishers and distributors) needs looking at if you want to get competitive.

Where bricks and mortar retailers should have an advantage

Bryant & May towerI would note that the Wiped! book has a printing error. Pages 33-48 inclusive are missing. I’m going to need to return it.

Obviously this’d be much easier if it had been bought retail, but I’ll be interested to see how Amazon UK handle it. I know that earlier in the year, SendIt.com sent my cousin in the UK an incorrect birthday gift (some book about WW2 instead of the Donkey Kong Country game we’d ordered for him), and there was some difficulty in getting it all resolved (in fact I’m not even sure if it was all resolved).

Retailers’ advantage is in customer service, particularly in cases like this where things go wrong. Face-to-face service can be worth a lot, and could help save market share. But only if they can figure out how to actually provide good face-to-face service.

A coupla things

The Slap

I finished reading The Slap. Great book, provided you don’t mind a little fruity language and adult themes in your novels. Looking forward now to the TV adaption.Thumbs up!

Possums

I was just thinking the other day that despite seeing a lot of possums around the neighbourhood, I never heard them in the roof.

Then when I was taking a look in the roof over the Easter break, I noticed a small hole, near the front of the house.

And the other night, I heard a possum scampering around up there. D’oh.

I told you so

I meant to post this a while back, but better late than never.

I reckon these guys have a good point.

We told you so

FORMULA one boss Bernie Ecclestone has said that he and Ron Walker now agree that the grand prix “should not have been run at the Albert Park street circuit”, and that “Melbourne should have constructed a purpose-built track for the race years ago” (Sport, 17/3).

Save Albert Park has maintained exactly that since 1994. A key slogan was ”Relocate (to a permanent track), don’t desecrate (Albert Park Reserve)”. If our group had been listened to rather than being maligned or ignored by successive Victorian governments, the state would now have a profitable permanent track and associated facilities given year-round use for motor sport activities, driver training, and testing of automotive products.

The state would have saved the hundreds of million of dollars now wasted on set-up and take-down of the temporary Albert Park circuit, and we would have a circuit capable of being modified to meet the changing requirements of F1 racing, such as increased overtaking opportunities.

Peter Goad, Save Albert Park, Middle Park

Age letters, 18/3/2011

In the wild

There’s a few thousand “More trains/trams/buses = less traffic” stickers out there, but it’s not that common to see them “in the wild”. By “in the wild” I mean stuck to cars that are not owned by PTUA committee members or their friends and family.

I don’t know who owns this little white car, but I was thrilled to see it had a “More trains = less traffic” sticker on the back of it.

PTUA sticker in the wild

It’s a bit hard to read the sticker… here’s a better picture of one (on my car):

PTUA bumper sticker

You might think it odd, but the stickers were designed to go on cars. The implicit message to following motorists is that if PT were better, that car (and lots of others of course) might well not be on the road.

Also observed in the world of promotion yesterday — it seems Penguin Books are jumping on the bandwagon of bill posters, more commonly promoting concerts.

Publishers advertising via bill post?!

Quick reviews

A few quick reviews of things I’ve read or watched recently…

(The DVDs fall into the category of “I’ve been meaning to watch that; I’ll buy that if it’s less than $10. Ooh, there it is!” One book was borrowed, the other I got for Christmas.)

A Hard Day’s Night — got this cheap on Amazon, and thought the kids would enjoy it, which they did. Occasionally the accents are a tad hard to follow, but the antics of the Beatles, together with Paul’s “very clean” grandfather got some laughs. And because it’s based loosely on the real life experiences of The Beatles, it’s also a view into life in 1960s Britain.Thumbs up!

Tron — found this cheap in JB Hifi. It smells a bit of 80s computer-age wonder cash-in, with users having real beings inside the computer who run all their jobs. But it was quite enjoyable, and very interesting graphics for a 1982 film.Thumbs up!

A Nest of Occasionals, Tony Martin — very funny stuff, particularly the tales of writing radio adverts, which had me in stitches at one point. I’m going to have to check out his other book, Lolly Scramble.Thumbs up!

Jasper Jones (by Craig Silvey)– Superb, a real page turner, really enjoyed it. And again, fully intending to get hold of his other novel, Rhubarb.Thumbs up!

(Currently reading Shane Maloney: “Stiff”.)