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Exactly how the Gov is subsidising o/s shops

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Created by ThePhil > 9 months ago, 22 Oct 2012
ThePhil
WA, 1322 posts
22 Oct 2012 2:47PM
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Have a look won't take long, tried to make is a humorous as possible, even got my Greg Combet glasses on.

All retailers want to do is to be able to deliver you goods as cheaply as the overseas guys, not make them as expensive as us.



If you agree, feel free to sign the petition.

www.change.org/p/federal-politicians-gerry-harvey-ruslan-kogan-give-us-shoppers-a-level-playing-field

pattiecannon
QLD, 593 posts
23 Oct 2012 5:14PM
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Nice one Phil, complex field here simplified for easy consumption. Thanks. I guess the forgotten people in this equation were the Aussie production houses.
But as your description of O/S retailers goes - they're fully aware of our retail situation and most of us here will always buy cheap first and quality second leaving our home based manufacturing sector to pick up the much smaller niche consumer markets. Who cares?

ThePhil
WA, 1322 posts
24 Oct 2012 1:04PM
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Thanks for the kind words.

The full discussions is happening on the windsurfing forums.

We are up to:-

[Don't feel guilty about buying offshore, you'd be crazy not to.

With the warranties too, if things don't change I'll jump on the boat too and set up WA SURF Offshore, then just use myself as the local warranty agent, pay overseas business tax too, tug a few patriotic heartstrings in the advertising. All bases covered, but insane that I would have to do it.

Gerry Harvey has been running with the ball and look what happened there.

Having said that 'Freedom's just another word for nothing left to lose', you should hear me sing!]

ThePhil
WA, 1322 posts
24 Oct 2012 1:10PM
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Thanks for the kind words.

The full discussions is happening on the windsurfing forums.

We are up to:-

ThePhil said...
[Don't feel guilty about buying offshore, you'd be crazy not to.

With the warranties too, if things don't change I'll jump on the boat too and set up WA SURF Offshore, then just use myself as the local warranty agent, pay overseas business tax too, tug a few patriotic heartstrings in the advertising, maybe save some Dolphins. All bases covered, but insane that I would have to do it.

Gerry Harvey has been running with the ball and look what happened there.

Having said that 'Freedom's just another word for nothing left to lose', you should hear me sing!]

lostinlondon
VIC, 1159 posts
25 Oct 2012 12:24PM
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I refuse to support anything that Gerry Harvey is involved with. The guy is a dinosaur, persisting with a retailing model that dates back to not the 20th, but the 19th century. Even though he is blwing hard about coming on hard times, if you check his earnings, he is still making good margins. The internet is here is and it is of more use to us than just pimping kites on Seabreeze



ThePhil
WA, 1322 posts
25 Oct 2012 10:37AM
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Yea he is, 'cos he's rich enough to do whatever he likes, but what about all the little guys that just want to get ahead?

Also why should you be paying all this dosh on all those things that you can't be bothered buying online.

ThePhil
WA, 1322 posts
26 Oct 2012 12:09PM
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SO HERE IS THE CALL TO ARMS.

The end game for any business operating under the current rules is:-

Have in Oz a showroom and warranty centre, but do all the selling from an offshore business, they can even log on in at the showroom for the sale. The customer will still get good local service. It's completely nuts.

Those figures again straight from customs.gov.au
o/s wholesale $110 incl post, 33% mark up, $146
local, $110, then duty, $120 then IDPC $169, 33% m/u $225, GST $248

I have been thinking about this a lot, all debates on this subject generally disintegrate into a shop v shop or customer type of thing and also get shut down by moderaters pretty fast.

But I'm going the public education route, business has been saying 'the high prices are because of the Government charges and red tape' so I am pulling the facts straight from the Customs website and showing the public. Delta Goodrem was busy so I have done it as humorously as possible.

Any type of individual customer service stuff is not relevant it just muddies the water, same when people talk about high wages etc.

But the internet can help hugely by educating the masses quickly, imagine if every shop owner in every sport did what I am doing, the problem would get sorted. Very important to only talk about the one thing though, Government charges and taxes on imports, nothing else.

And if I can make a video, anyone can.

Markie
QLD, 48 posts
27 Oct 2012 6:52AM
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I always thought those charges (duty and IDPC) only kicked in on imported goods over the value of $1000.

Straight from the customs website:

www.homeaffairs.gov.au/

"How is duty and GST calculated?
The Customs value of goods imported into Australia is known as the 'transaction value'. It is usually the amount you paid for your goods, converted to Australian currency. The exchange rate that is used is the rate applied on the day the goods were posted (exported).

When the goods you import are valued at more than A$1000, or include alcohol or tobacco products of any value, a Customs value is used as the basis for calculating the amount of any duty and/or GST and other taxes payable.

Duty payable is calculated on the Customs value of the goods. Relevant duty rates are determined by the Customs Tariff Act 1995 and are applicable at the time an import declaration is made.

GST is paid on the Value of the Taxable Importation (VoTI). The VoTI is the sum of the Customs value, transport and insurance costs (or postage and insurance) plus any duty payable and WET payable.

Below is an example calculation for an electric sound amplifier with a duty rate of 5%. The purchase price was US$1,274 and the exchange rate on the day it was exported was 0.9100 (A$1 = US$0.91). The postage and insurance was US$118.30

Customs value converted to Australian currency = US$1274/0.9100 = A$1,400.00

Postage and insurance converted = US$118.30/0.9100 = A$130.00

Duty (amount payable) = 5% of A$1,400 = A$70.00

VoTI = (customs value + duty + postage and insurance)

= A$1,400 + A$70 + A$130 = A$1600.00

GST = 10% of VoTI (amount payable)

= 10% of A$1,600 = A$160.00

Amount payable to Customs and Border Protection

Duty + GST = A$70.00 + A$160 = A$230.00

Plus import declaration (lodged by document) processing charge of A$48.85
Total payable = A$230.00 + A$48.85 = A$278.85

I guess retailers would rarely do under 1k so would always be subject to it.

Still adding the IDPC to a $100 item in your example set off my bull**** alarm.

Genuinely happy to be corrected if I'm wrong.

Awaken
QLD, 128 posts
27 Oct 2012 10:23AM
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ThePhil said...
SO HERE IS THE CALL TO ARMS.

The end game for any business operating under the current rules is:-

Have in Oz a showroom and warranty centre, but do all the selling from an offshore business, they can even log on in at the showroom for the sale. The customer will still get good local service. It's completely nuts.

Those figures again straight from customs.gov.au
o/s wholesale $110 incl post, 33% mark up, $146
local, $110, then duty, $120 then IDPC $169, 33% m/u $225, GST $248

I have been thinking about this a lot, all debates on this subject generally disintegrate into a shop v shop or customer type of thing and also get shut down by moderaters pretty fast.

But I'm going the public education route, business has been saying 'the high prices are because of the Government charges and red tape' so I am pulling the facts straight from the Customs website and showing the public. Delta Goodrem was busy so I have done it as humorously as possible.

Any type of individual customer service stuff is not relevant it just muddies the water, same when people talk about high wages etc.

But the internet can help hugely by educating the masses quickly, imagine if every shop owner in every sport did what I am doing, the problem would get sorted. Very important to only talk about the one thing though, Government charges and taxes on imports, nothing else.

And if I can make a video, anyone can.


Actually Phil your not far off the mark. The retail kite/ board sport gig is tough and despite what everyone thinks there is not a lot of money in it. Most retailers do it more for the love rather than the business itself. Your business model above could be effective with some tweaking. A part share/ ownership in a brand would also help.

richswing
WA, 724 posts
27 Oct 2012 10:31AM
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You are fighting a loosing battle, since when does the government listen to their voters, its all about making a quick buck, if they can milk it for all it is worth they will, they do not have the peoples best interest at heart. Anything that is legislated or have some form of restriction has massive costs added to it, take Australian Standards and HSE for example, supplies whack on a minimum of a third more costs when selling stuff to Australia.

My personal opinion (I really do not have a clue about financial stuff) is that the cost of living is just too high in Australia and the market to small, the sport is weather dependent and if we have a bad season I presume sales must go down.

For retailers to survive that they have to jack up their margins which starts or compounds the vicious circle.

The only way for retailers to survive is to diversify- SUP's are a great option but are also a bit expensive to have high turnover, shops need to cover all the bases including having online shops.

The other option is to sell cheap imports, this is not kite specific but for a country that 's money is worth something have you noticed how much crap quality stuff or cheap stuff sold at relative high prices (compared to other countries). The funny thing is peoples standards have dropped and they think they are getting a good deal.

I also feel people at the moment have no confidence in the financial market and are waiting for round two of the GFC and therefore are playing it safe and not spending.

Cheers
Rich

Wisha
SA, 255 posts
29 Oct 2012 7:57PM
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Never use "Gerry Harvey" as a positive! Go Harvey Norman...yeah bugger off!
Ever noticed the price match sign that hangs down every 2m in store, not true. JB had an item on sale in stock, HN staff wouldn't match it because it was too cheap. Got it from JB's across town no issue, but on principal, hope the Criminals go bust..I HATE false advertising.
Sorry, had to get that out. Feel sorry for the independents, service is everything now. Maybe claimable tax deductions/ offsets for Aussie purchases? Costs more initially, but if your employed or a pensioner you get just over the difference back.

ThePhil
WA, 1322 posts
29 Oct 2012 10:29PM
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Markie said...
I always thought those charges (duty and IDPC) only kicked in on imported goods over the value of $1000.
When the goods you import are valued at more than A$1000,


Kind of there is also this one:-
"If multiple packages arrive in Australia to the same consignee sent from a single consignor overseas, the value of all packages may be combined for duty and tax assessment purposes (refer to Example 1). "
So it comes down to what 'may' means, but I took that as probably OK for individual but if you do it all the time, they would combine them.

The $100 example is pretty extreme, but what happens is somebody comes in needing something maybe a le bladder or often some new cool product has come out, say a go-pro update. Then its like, crap how can I get this in for this customer, and you come up directly against an overseas guy who can post it straight away (they just buy it off the manufacturer same as I would), without having to go through all the charges and hassle. So you can't really do your job, which is basically getting in stuff that customers want.



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"Exactly how the Gov is subsidising o/s shops" started by ThePhil