As a small business owner, I’ve witnessed first hand the effects of overseas online retailers. I have lost numerous sales because an overseas dealer can offer the same product to customers for around 10% less.
One of the products I used to sell was 20% off cost price to me, including GST. An overseas retailer for the same product, would buy it from the Australian manufacturer at the same 20% cost price – BUT they would also be exempt from GST, so a further 10% (or there abouts) discount… Consider that, and you see that overseas retailers are able to sell AUSTRALIAN MADE products cheaper then legitimate Australian dealers of the same product!!! What a joke.
It angers me that the Australian public have backlashed against the retailers for their suggestion of imposing GST on imported items, or by removing GST on items under $1000 sold by retailers in Australia (the latter idea seems to have been completely disregarded, even though it would give the impression that locally sold items are cheaper).
I’m all for a bargain, but at what cost? Australian retail businesses are losing out to overseas retailers through a very simple loophole.
In addition to my previous example, imported goods sold by Australian retailers are also affected. When a retailer orders in over $1000 of stock, they must pay 10% GST plus a duty tax, on top of the shipment’s value. Even if the individual items being imported are worth less then $1000 each, the taxes are paid on the value of the entire shipment… Consider a regular shopper, who purchases only one of these items, under $1000, and they won’t pay a single cent in GST or duty.
Warranty will always be the kicker though. There are certain products I buy from overseas but for the majority, I still shop with Australian retailers purely for their warranty & support.
I am torn both ways with this debate. I feel for small business but at the same time believe Australian consumers should be allowed to have the option to buy products tax free from places who normally sell the same product cheaper.
There just needs to be some sort of parity there… It just isn’t fair on small business to slog them with GST/duty, but not the consumer. Remove GST from the local retailer, or impose GST on the consumer for overseas purchases. Unless everyone magically finds a way to reduce prices by 10% some other way, those are the only options?