Online vs local

I find it a little difficult to accept the big retailers’ claims that ensuring GST is applied to mail order goods ordered online from overseas will make a big difference. GST is only 10%.

Take for example the DVD of Edge of Darkness, which I mentioned the other day.

Amazon UK price: 3.97 + 3.68 postage = 7.65, or A$12.18 (and note that more than half the postage cost is a “per delivery” charge, so it’s cheaper to order more items at once).

Cheapest price shown on DVD Plaza’s Pricecrawler: A$24.45

(It’s also notable that the version most local etailers are selling appears to be the no-extras version; Amazon has the 2003 edition with a number of special features. And yes, it matters, at least to me. I’m a sucker for that stuff.)

An Age article the other day noted that most Australian bestselling books are in fact cheaper if bought locally. That may be significant if a lot of the books you buy are Australian bestsellers, which I expect includes a number of locally published books.

But that’s not usually the type of stuff I buy.

Ultimately shopping around is the way to go. For the stuff I buy, often it’s cheaper if bought off-shore. And it’s not a 10% GST difference, either… If that’s the only difference, I’m likely to buy it locally so I can have it immediately.

But if it’s a big difference as in the above example, and I don’t need it straight away, then sorry, my wallet tells me I should buy off-shore.

If you enjoyed this post, please consider leaving a comment. You can subscribe via feed reader RSS, or subscribe by email. You can also Follow me on Twitter, or Like the blog on Facebook.

18 Replies to “Online vs local”

  1. The retailers (particularly the larger dominating ones) are just making a fuss of it as a distraction, essentially trying to shift the blame for their own high prices onto the government. As someone pointed out in a comment an article in The Age, their ultimate objective is probably delay mail by sending it through customs. At some point they’ll have to increase customs staffing, which raises the question as to how much it’ll cost just to get a small 10%. I wouldn’t be surprised if the cost of intercepting low cost items like books and DVDs would be more than the 10% revenue they’d gain.

  2. Three examplesive recently seen:

    – two 4000s road bike tyres $85 online including postage. $100 for one at local bike shop
    – Call of duty black ops xbox 360 game. In store $120 online $55 including postage
    – forza 3 standard edition $50 in store. The ultimate edition can be found online for $35 including postage

  3. fishpond.com.au is something to check out if you don’t know about it. They source from amazon, both co.uk and .com, and shipping is cheap to free. Possibly they’re a little slower, but not much. I’ve been very satisfied.

  4. I was looking to get a pair of shoes, specifically this, asics sensei 3, RRP $210.
    Cheapest I could find in Australia was this.

    http://www.stringersports.com.au/asics/asics-mens-gel-sensei-3/w1/i1158224_1041297/

    $169 + postage.

    They didnt have my size.
    I ended up getting it from Amazon.
    Cost me AUD$120 inclusive of delivery.
    Got to me in 10 days.

    http://www.amazon.com/ASICS-GEL-Sensei-Volleyball-White-Black/dp/B0028MQPUC/ref=sr_1_1?ie=UTF8&s=sporting-goods&qid=1291720250&sr=8-1

  5. Go check out http://www.booko.com.au

    from the front page:

    Booko is not an online shop. It goes out to the Internet and looks up book & DVD prices for you and figures out the shipping costs. For the international sites like the Amazons (.com and .co.uk), the prices are converted into Aussie dollars.

  6. Wing mirror for a three year old European car.
    $350 from the dealer in Australia.
    41 pounds plus 25 pounds postage, total 107 A$ from a spare parts dealer in the UK.

  7. Best example of this for me was buying Photoshop for my new Mac (first time I’d ever bought it). Would have cost a whopping $1110 to buy in Australia or online from Adobe. After investigating option bought it from Amazon for $657, right at the time the dollar was at parity. It got shipped to a friend in the US for free and since I already had the trial downloaded, all she had to do was rip it open and email me the code. Saved almost $500!!!!!

  8. …. and $650 for Photoshop is ridiculously high anyway, I was just fortunate that a number of those who visit my site cumulatively donated about $200 which brought it down further. Couldn’t manage without it though ;)

  9. I did some research myself using the books the big paper listed and only 1 out of 3 of them was cheaper in local shops. So i’m not even sure they bothered doing the research themselves.

  10. @Fen: Looks like your Aussie journalists are no better than the ones in America. They regularly publish facts and figures from trade association press releases without pause to independently verify them, seek a corroborating source, or ask for more information on how those facts/figures were generated or obtained.

    Part of this is because of the shortened news cycle. If there’s any element of sensationalism to the story, they have to go with it NOW or it will be old news by the time they could actually fact-check the story. And so long as people keep buying their newspapers, tuning into their newscasts, or visiting their web sites, they’ll keep doing it, because quality and integrity are secondary to audience share in the metrics by which the people who sign their paychecks judge how they do their jobs.

  11. Books prices in Australia are ridiculous. Yesterday I purchased programmer reference book from http://www.bookdepository.com which is UK based. Cost me $47.37AU with free shipping (all orders include free shipping). The same book from local suppliers was $79, plus shipping if I didn’t purchase it in a store.

  12. One thing the Australian retailers do not mention is their own markup.

    The markup for a typical bookshop is (or was) 40%. For an imported book, they take the wholesale cost in, say, the UK, add the shipping charge, and then add 40% of the total. The consumer is consequently paying 40% of the shipping cost to the bookshop as profit. Not surprising that it is more expensive than buying overseas and then paying the shipping after the retailer takes their markup.

    That 40% is a significant multiplier. Each additional cost (e.g. an additional intermediate wholesaler, expensive priority shipping, etc) for a retailer adds to their profit, and significantly inflates the final price. Without competition there is no incentive for them to reduce their markups.

  13. My new bicycle arrived from the UK yesterday.
    Shipped Thursday – arrived following Tuesday.
    AU Price – ~AUD$1800
    UK Price – ~AUD$900 + AUD$150 p&h
    It arrived in pristine condition (great packaging) and was easily assembled without any significant effort on my part.
    Savvy buyers do their research online, it’s very quick and easy to get a wide variety of prices for the same item and make your dollar go further.
    Australian retailers need to get competitive about their pricing, even if I had to pay GST on my purchase it would still be far cheaper to order online. I would have purchased in AU if they could get within ~15% of the “best price”.

    Quick shout out to one of my fav computer gear price checking sights in AU:
    http://staticICE.com
    And my new bike vendor in the UK (they’ll definitely get more business from me):
    http://wiggle.co.uk

  14. I’ve been buying books and DVDs through Fishpond and Book Depository for quite some time now. The prices are indeed substantially cheaper than those charged by local bookshops, even when the GST difference is taken into account, and postage is (from memory) free with Book Depository, and free if you order over $50 with Fishpond.

    However, I’d be reluctant to branch out into other types of purchases via the internet, such as clothes. I like to know what I’m getting, and with books, DVDs and CDs you can be fairly sure of that. As long as it arrives in good condition and has no defects, I’m not going to need to return it.

    I might consider buying shoes online, if it’s a brand I’ve bought before and I’m confident I’m buying the right size. But other clothes vary so much in sizing, you really can’t be sure until you try them on, and I’m certainly not going to go through the hassle of ordering something by post, trying it on, and mailing it back if it’s the wrong size. Not to mention the fact that some clothes look well enough on the hanger, but are completely unflattering when one tries them on, even if the size is right.

    As for electronic goods, I think I’ll stick to buying them in person. I’m not yet a confident enough buyer of them, so I like the personal advice (and I go armed with Choice magazine as well). Rather than just going for the cheapest price, I’m more inclined to ask my friends to recommend stores where they’ve received good service, especially follow-up service. If something goes wrong, I want to go back to the store and argue my case in person, not attempt to resolve it by mail or phone. Email and phone calls can be ignored, but it’s very hard for a retailer to fob someone off when they’re standing there in the store, demanding to speak to the manager, and refusing to leave until the problem is resolved.

    So for me, it really doesn’t matter how cheaply electronic goods can be purchased online; I’ll keep shopping in person. The likes of Gerry Harvey don’t really have anything to worry about. (Or maybe he does; I’ve actually been wary of shopping at Harvey Norman because of less than flattering anecdotes I’ve heard about their service. So far I’ve always stuck to other retailers.)

  15. One of the problems with books is the cost of postage to Australia. I’m talking wholesale here, and any big orders (over $1,000) will have to go through customs. Add customs duties and any administrative fees as there are companies who specialise in doing the paperwork to get goods through customs on top of the cost of postage.

    If you’re buying through a company such as the Book Depository you have to aware of how they manage to offer free postage. Royal Mail subsidise mail of this kind by a very small amount of 80%. Royal Mail and Australia Post have an agreement in place and I believe it’s to the effect that AusPost will deliver Royal Mail mail for free. In effect it means that once it’s in Australia AusPost is paying for postage of these items. If you’re in selling, like me, you will have noticed the price rises of postage. The Book Depository is not paying for the free postage, the consumer in Australia is paying for it.

  16. I bought an e-reader a couple of months ago – locally, from the shop – in person, and have been populating it with books ever since. I bought a series from the UK (http://www.waterstones.com) who later informed me that I wouldn’t be able to purchase them in the future as I didn’t have a UK address.

    Go figure, I can buy physical books from amazon or waterstones but not ebooks.

  17. @Nigel: That seems to be the case for eBooks that have DRM (which is a lot) – but non DRM books you can still buy from overseas online. They appear to be trying to manually implement zone, rather than programatically do it (like DVD) I’ve seen how to arrange overseas addresses, but arranging an overseas credit card is rather harder. If they look at your originating IP to work it out, that’s easy enough to defeat with a proxy.

Comments are closed.