Aussie Retailers Rail Against Online Shopping

In a move that could end up affecting video game prices, Aussie retailers are demanding that the government impose GST on all goods bought over the internet, or remove the GST in Australia to level the playing field for brick and mortar retailers.

The continuing strength of the Aussie dollar compared to its US equivalent has driven many consumers online to import, resulting in one of the worst Christmas hauls in recent memory for Australian retailers. Now a retail coalition made up of 2211 stores nationwide - including Myer, Harvey Norman and David Jones - is asking the government to do something about it.

Currently GST is not charged to imported goods under $1000, whilst all goods bought in Australia are subject to the tax, which drives up prices locally. Retailers have argued that this is unfair, giving overseas online stores a head up - and have even asked the government to consider removing the GST on locally sold products at the same price.

Myer Chief Executive Bernie Brookes claimed the current system is unfair.

"We just want the same rules that we have to live with — collecting GST and duty — to be applied whether you reside in China or Australia," he claimed.

Despite high video game pricing in Australia, we sympathise to an extent. It does seem unfair that retailers are subject to a tax that consumers can negate by shopping overseas. The solution, however, seems less clear. Removing the GST on all products under $1000 is pie in the sky stuff, but adding GST to products bought overseas would be a logistical, and costly, nightmare.

Any ideas folks? Or should things remain as they are.

Online sales will kill jobs: retailers [The Australian]


Comments

    I can only say that if there's a change, it better be that the local prices go down. If it starts costing more for me to import, I am going to make a number of angry statements on the INTERNET.

    removing the tax would be nice, but would hardly bring it to an even head, its mostly the wholesalers driving the price, due to being an island and regioning it gives them almost complete control over some products. even as the regioning grip loosens they dont want to loose their tidy little profits especially when a good portion of the populace are ignorant of online retailing and the benefits. Retail stores making a loss at the front end doesnt effect the wholesalers at the backend.

    Retailers... F*** you. You see them bitching yet they don't even lower their ridiculous prices just a little to compete.

    Also while the Government would get all the extra GST, they would have to lower the rate for imported goods by at least 91% for most games and that number is way too big and it would look freaking ridiculous. If they do lower it, it would be something like 30% so we are still safe.

      Im sorry, but it seems you expect retailers to be LOSING money every time they sell a game in Australia. If you paid anything less than $88 for a console version Black Ops, then whoever sold it to you lost out, since that is what THEY paid for it.

      I remember paying $74 for MW2 last yr, $79 for Black Ops this year. On both occasions I was chuffed with my bargain. But then again Im obviously a sucker.

    GST or no GST, $100 at my local shops vs $40 online is no choice at all.

      Spot on. GST's 10% isn't to blame here. The price of movies and music isn't much different between countries - its just games. The problem lies elsewhere...

    Retailers need to drop prices not ask prices to increase on imports. Why should I pay over $50 to buy warhammer stuff from Australia when I can get that exact same thing for around the $22 mark ($25ish with delivery) from the UK?

    Why would I buy a DS game for $70 when I could buy the same thing for $40-50 from Play-asia?

    To me, even if the government was stupid enough to impose this, it will *still* be cheaper to buy overseas.

      I think people are missing the point. I sell Games workshop products. I pay $42 dollars for a box set and sell it for RRP for $50. How the hell am I meant to lower the price to compete With $25 over in the UK. How do I make a profit. People keep saying screw the retailers, they should lower the price. If we lower the price, HOW ARE WE MEANT TO MAKE MONEY SPART PERSON. We end up selling products at a loss. The same for games. I sell games for $85 and make a $5. I can't lower the price, because I end up giving it away. Being a retailer, I know that removing the GST or adding it to online products will make prices better. People will spend money in Australia instead of giving it to another country and prices will go down. They've done it in other places and it's worked. The whole point is to get people spending money in their own country, forcing the overseas companies to think twice about upping prices to rip us off.

        AS piat said, it's not the fault of the stores. The issue is why your wholesale costs are double the overseas retail costs.

        why not buy from the uk ? buy for 25, sell for 35. same for games; you could probably buy pal games for about 50 bucks instead of paying the prices you pay.

        The point was about adding GST to internet sales, which is going to do absolutely squat for you in the scenario you provided (even in the highly improbable event that it could be implemented). If you pay too much wholesale to provide a competitive retail price then that is a whole other kettle of fish, and hardly one that is the consumer's fault or concern. As a small business owner myself, I recognise where you are coming from, but them's simply the breaks. Can't stand the heat, get out of the kitchen and all that. We can hardly ban internet sales to keep Australian businesses afloat (not that it would even be possible anyway). Besides, the internet works both ways - it opens up markets we never would have had access to a decade or two ago. As the Krogan might say, you must adapt, you must thrive, no matter the situation.

        "I think people are missing the point."

        I think you, like all retailers, are missing the point. Don't blame cheaper overseas goods, blame the fact you're having to fork out $80 for a game or $40 for a space marine to resell with a crappy profit margin. The distributors are to blame, not the customers.

        I'm not blaming the customers at all. I know the situation everyone is in and are always looking for a cheaper price. I also realise that overseas distributers are charging more than they should. And as for getting out of the kitchen. Iv'e been doing it for 10 years and am the only one in my area that has survived and makes aliving from it next to my main job. There isn't one factor here. I was merely pointing out the one that pisses me off the most. I'm hoping that the big wigs from the high up company start to comment on this publicly. Their message will shine a better light on the subject and people could get a better understanding.

        Cuddles, I emphathise with the hard position you're in but being an economist, I favour competition. The distributors will have no reason to drop prices if people keeping buying for the high prices that you want aussies to contemplate buying at. GW especially has steadily raised prices in all countries and do not change their ridiculous prices to match changes in our currency. If you're struggling to make a profit given your current stock costs, I'd urge you to do what we're doing and buy your stock from overseas (keep in mind I have no idea about any licensing laws GW may have imposed on Aussie retailers). And as sad as what the others have said is, I have to agree. If you can't make a profit, then the business is not viable. Move on :/

        International distributors need to suffer declining revenues and losses to be forced to change, not supported with more business for their lousy prices.

        Its a tricky one, I do buy from brick stores, but only on impulse, most of my books now come from overseas, because with the aussie dollar $30 from amazon (though their shipping can be steep) or bookdepository (free shipping) beats the tar out of $60 locally, same applies to computer games.
        This isn't the GST, its probably a slew of things that are causing the different price. Adding GST won't help because $33 still beats $60.
        I think the retailers need to look to their suppliers to findout why things cost so much.

      Thats the same with retailers though, especially with vid games. Why sell something for $50 when you can sell it for $90.

    australian videogames are overpriced. reduce the price to a globally competitive level and people will buy them again.

    I agree it might not be "fair", but nobody said life was ever fair.

    Also, the idea that "the continuing strength of the Aussie dollar compared to its US equivalent has driven many consumers online to import" has absolutely nothing at all to do with the GST, so why are retailers complaining about the GST when the problem is clearly AUD/USD parity?

    If I'm importing goods for 40-60% less than what I pay in "brick and mortar" stores here, then imposing a 10% GST on those imports is not going to make a difference.

      Because it wouldn't be the governments fault if retailers were charging 60 to 100 dollars more for the same thing.

    Set up an online store overseas. Problem solved.

      I thought this was what Myer was actually planning to do.

    Let's be honest, when I can buy the same product online for half or less, removing the GST isn't going to cut it.

      this is the key. :)

    well places like EB would have hard freaking hard time selling PC games with the epic steam xmas sales. But they want either less GST on their goods or GST on overseas, and people overseas may or may not like that. And games in Aus are just to freaking expensive its insane.

    i mean you pay $50 to %60 for brand new console titles in the US and you pay double that here in Aus. Its a double edge sword and it sucks.

    Umm... But even with the +10% GST importing games is still going to be MUCH cheaper.

    Besides, Myer isn't one to be able to talk - my local myer has a copy of Stranglehold in it's bargain bin for $50...

    But, i digress.

    Lets use an example of games i recently bought on Zavvi.

    Splinter Cell Conviction (360) and Capcom VS Tatsunoki....whatever (Wii). Both 9 Pounds each, plus shipping (2pounds something)

    At the current conversion rate they came in at under $20 each, easily... If i added GST to that, it would be around the $20 mark.

    Now, both of these games retail at AT LEAST $50 in aus, each. Plus Capcom VS. Birdmen isn't exactly the most common game to find..

    So, honestly... how is adding GST going to help out retailers? I think it will remain unnoticed by the main shopping population.

    Prices need to be fixed WITHIN Australia, not tacked on to overseas purchases. Stop blaming overseas and put more pressure internally.

      I think it is unfair, but you're right - regardless of the GST the price of games is madly inflated here. Even if there was no GST it would still be cheaper to buy online.

        Oh it is most unfair!
        But the industry is a very unfair place and always have been.

        You may or may not be aware, but i work in the distribution industry (action sport dvds and clothing), and it is a VERY cut throat world with mark ups that are STUPID.

        People will pay stupid amount in store for a tee that only cost us $5 to make - yet we are still bleeding money. We are constantly having to find ways to keep up in a rapidly evolving market.

        The problem lies in the mentality of the modern shopper.

        People who shop regularly these days will rarely EVER buy anything unless it has a "sale" sticker on it. I know my partner doesn't. I can't remember the last time she paid full RRP for any item of clothing.
        Same applies to my gaming most of the time.
        Cheap skate gamer is a testament to this mindset.

        This is why the Xmas sales have carried on so long before and after the holiday period - you watch, sales WILL continue for at least another month - maybe not at all stores, but still quite a lot.

        As i said, stores need to look internally at what NEEDS to be done. Complacency and complaining isn't going to equal sales - they have to get agressive and also talk more with their supplies and importers and government.
        High shipping costs need to be looked at - not to mention duty costs and the constant problem of Aus getting overcharged for damn near everything.

        But basically, the government may want to chuck GSt on online order - heck it's more money for them - but it's not going to help retails - something has to be done at a more base level to fix this.
        What exactly, i don't know - i'm not an economist - i don't know what i see, and it doesn't look good.

        Sorry if i have no sentence structure and i'm going around in circles - i'm trying to get work done as i write this (in fact i'm trying to work out what prices will give our newest products a chance of selling).

        Basically, it's an unfair market.
        It's unfair on retailers to miss out on sales.
        It's unfair on consumers to have to pay inflated prices.

        It's a bit of a sticky situation, to say the least. Things aren't going to stop being 'unfair', but we need to find a solution that is beneficial to both parties.

          I agree with that statement. You know, the one about the shopper who won't make a purchase without a big sale sticker on it.

          I think that having a "SALE" is becoming the everyday status quo in most retail outlets, regardless of time of year. I couldn't tell you the last time I went into my local GAME or EB and wasn't bombarded by the huge ceiling posters announcing a sale of one sort or another, and games marked down by $1 or $2 just so they could have the nice big handwritten 'Reduced' stickers on them.

            Meant to also say that I shop in the same way that I suspect a lot of shoppers shop: I buy things largely based on what I'm saving, often with little or no regard for what the actual price of purchase is.

            Example: I buy clearance half-price meat from the supermarket, even if next to it is a comparable product with a longer use-by date and a much cheaper $-per-kg price...

            The sale mentality is here, possibly to stay.

            Maybe one day there will have to be a word to replace "sale," as it will have become so ubiquitous.

            Keep your eyes peeled for the "Yes, this is a REAL SALE sale"

            Australia does get overcharged for damn near everything.

            Costs here in inexorably high comparable to other countries- even on domestic services.

            I sometimes wonder if there's something amiss with our market?

          With the cost of living skyrocketing, and set to go even higher...people are more wary with their money and are having to make less go futher.

          The local news had someone talking about the fact that regional and rural business' will still benefit because they know their customers usually and are able to cater to their customers needs better and make them feel more valued.

          Thats the only reason I shop at my local EB for games, I've gotten to know the guys in there and they know me and make me feel like a valued customer...I walked into another EB in another city and really didn't feel like spending my money in there.

          These business need to stop bitching about taxes and shit and look at ways to get the customer to want to spend their hard earned money in that store, rather than trying to kill all other options and trying to force the customer.

          They'll always find it somewhere else for cheaper.

            It doesn't really have anything to do with the cost of living. That may reduce or otherwise limit people's disposable income, but it has no real influence over people's general tight assedness, which is the same whatever state the economy is in. I've dabbled in retail and service industries (both as a grunt-level sales type and now as a small business owner) long enough to know that people always want a special deal, regardless of their situation. I've dealt with people that live in multi-million dollar mansions that still look to shave a couple of dollars off some trivial little purchase. Everyone always wants a discount, even when you are virtually giving away something at cost. Even if you paid customers to take your goods, no doubt some would still want a better deal. It's just human nature.

      Agreed. I'd happily pay 10% on top of all of my online purchases. There is no way they are going roll back a tax that took two governments and nearly 20 years to implement.
      As for all the big retailers, they can afford to drop prices to compete and often will. IF you can find someone to serve you, who CAN negotiate on price, they will be more focused on padding their comission with Monster Leads, Surge Protected Power Boards and Extended Warranty...
      If there was actually some service, people may even pay a little more.
      But no crowds, no dickhead salesman and best prices, online still seems the way to go. Tax or no tax

      LOL - I went to my MYER the other day and also saw alleged bargain bin copies of Stranglehold! and - get this - Kung Fu Panda - $50!!! FIFTY.DOLLARS. in the Bargain Bin, this time last year my local EB was selling Kung Fu Panda for $8 new.

      Whilst I'm on the subject of Myer - what exactly do they have against the 360?

      They're well stocked on PS3 and Wii, but their 360 range is paltry.

    Placing a GST on goods a person has purchased on the net from overseas is rather useless. It's not going to stop them when in some cases purchasing things off the net is upto 50% cheaper than buying it here retail.

    Also maybe Harvey Norman the company who started this bullshit need to wake up and realise that the consumers are sick of their ways of charging more than recommended or even needed.

    I think online stores are finally opening the eyes of Aussie gamers. These prices we find online are what games are supposed to cost. We are just so dumbfounded because we are used to paying a ridiculous markup on all games.

    My retail buying days have long since passed.

    I have a better idea, why don't the retailers form an alliance to start bargaining with the importers so that they aren't buying goods for more than it costs an individual to import the same item from overseas?

    GST has exactly bugger all to do with this state of affairs, the issue is with the middle-men who jack up the prices because there is no competition on their level.

      This. I work in textbooks and I was able to find a certain nursing text online for $30 LESS than the COST price for my shop.

      At that price the online shop is still making a profit, the distributor in that region is still making a profit and the manufacturer is still making a profit, so why are stores in Australia still paying so much for our stock?

      I think the issue is at the distributor level, but I'm not really sure what we can do to get them to change things. To me it seems though that their greed is going to be the death-knell for many retailers in Australia - book, comic and video game stores in particular seem to be the ones that are really going to lose out.

      Also, I'm not sure about other industries, but with books there are parallel importation laws that stop us from ordering our stock from overseas wholesalers. It was meant to protect Australian businesses, but in the age of online shopping all it's doing is harming us.

    I agree with Chuloopa and Mark, games from online stores will still be almost half price in some cases compared to in-store prices.

    The video game industry wants to move online, and it will. It just depends on how long people try and fight it for.

    Imagine if digital downloads from PSN and XBL were cheaper, stores would be screwed!
    I think it is similar to the music industry, they didn't act on the digital/online thing for ages and they lost alot of money.

    Maybe the major retailers should combine and create an online superstore (like iTunes) or just have more focus on online sales.

    Lower the prices here, and I'll stop importing. Wack on GST to online purchases and I'll still purchase online, as it'll STILL work out cheaper!

    Often times new release AAA games are $75 at Big W, thats the price point where its an acceptable compromise between not saving money and saving on the delivery time.

    50 bucks and 2 weeks delivery from ozgameshop or 75 from big wuzza is much the same to me, perhaps retailers can start pricing games at that level

      If you're not exagurating that delivery time, check out game UK sometime, I generally get stuff in 5 working days. Though I am in a city, which would help.

    On that note, LOCAL retailer GAME has Mass Effect 2 for preorder for $69 (online only). While still available cheaper overseas, it's not bad when compared with the $100+ listed on JB and EB's websites. When retailers drop their prices like that I'm all for supporting the local guys.

    That being said, I picked up the Castlevania CE from the US for $30 last week.

    I have to say that I did most of my Christmas Shopping using eBay this year. It was great to just sit down for an hour and get it all sorted out, without having to fight my way through the Hell that is a Westfield shopping centre.

    Too long have retailers abused their position - price gouging, horrible trade-in value, incompetent staff that don't know anything about video games (I swear to go a staff member at gametraders didn't know what street fighter IV was on the week of it's release).

    So now that they are in the shit, what do they do? Turn to the government to bail them out -_-. This is a terrible, terrible thing that's happening. If this goes through, it won't be long before we starting being taxed for steam sales too, meaning we'll be back to paying double what Americans pay for games no matter where we buy them.

    It's things like this that make me glad I'm moving to Japan this year.

      You think it's any better for PC games in Japan? Think again.
      There is less range, and if you can even find the game outside of a major city, it will cost you just as much (maybe a tiny bit cheaper, maybe) as it does in Australia.
      As for Steam; often you get US prices (though sometimes it's the same as the AU prices), but also a lot of games are simply unavailable. During the recent Christmas sale, on each day of the daily specials, 2 - 4 games were unavailable because of Steam's region locking.

      As for consoles and hand-helds...well hopefully you can speak/read Japanese.
      A used DS game will cost 3,000Y - 4,800Y (roughly $36 - $57 AUD).
      These are prices from normal retailers. You might get better bargains in places like Akihabara.

        Actually, even though on steam you pay in USD, the prices are set locally.

      Who cares about employees not knowing everything about games? Their job is to give you a product and take your money. As long as they can do that, it's fine.

        I was actually the person involved in the Street Fighter incident Steven mentioned.

        Basically, I walked into the store, and asked the store attendant how much they were selling Street Fighter 4 for. She looked at me blankly, and said she didn't know what I was talking about.

        This would still be understandable, maybe...if there wasn't a giant poster of SF4 on the wall, and literally, right in front of her under the glass of the table counter, one of those SF4 print ads. I had to literally point in front of her to show her what I meant.

        I fully expect someone who sells something for a living to at least know the names of their products, especially when said product is advertised all over their store.

        It's not that they didn't know "everything" about their games (I'm pretty sure I know more about Street Fighter than every person in that shopping centre combined), but they didn't know anything.

        I would find it difficult to support a retailer with no tangible benefit to shopping in store as opposed to on line, even if that benefit is something as basic as knowing the name of your product.

        For the record, I got my copies of Street Fighter 4, and Super Street Fighter, overseas.

      Happy for you Steven on going to Japan, wish I was you. Games aren't cheap over there from what I've imported (around 6000-7000 yen at release).

      "It’s things like this that make me glad I’m moving to Japan this year."

      HAHAHAHA! Their system is even worse! Anime/TV is 6000yen for 2 episodes vs Australia being 4 for $30 or less. They sell music singles for 1200yen with 2 songs, and then sell albums that are composed of those singles with 1 or 2 bonus songs for 3000yen+.

      The Japanese retail scene is the epitome of price fixing and exploitation. Australia might not be the UK or US, but we get it bloody lucky compared to the extortion the Japanese retailers get up to. The mafia should be jealous of how well they do it...

        As Mr Waffle have said, Japan has a silly system in place to protect small/local businesses by price fixing dvds/games to a retardedly high retail price, so the bigger companies can't undercut these small "mum and dad" owned stores and drive them out of business.

        In short, be prepared for something far worse than Australia.

    The suits are just upset cause their big fat paychecks are getting slimmer. Stuff the retailers if they want more sales then maybe they should lower their prices.

    So how would this save jobs for people in the retail industry? I don't see why retailers should fear people importing games, I mean most of the time there's shipping and handling costs that come from purchasing overseas games, right? Then there's also the speed of delivery which adds to costs. Maybe I'm missing something. :S

      It cost's jobs because there is less of a need for said brick and mortar stores, because they think worst case that everyone ends up buying online.

      Because if fred buys online, but jeff is unsure about it, Freds cheaper products and if he has no disaster stories about something not arriving jeff will be more inclined to buy online

    Quick! Someone Call the Waaahmbulance!

    Honestly, how about being competitive in your pricing, and make it worthwhile for the customer to walk into a store and buy what they want outright, instead of waiting a few weeks to buy it online.

    Brick and mortar stores have one thing going for them: No waiting.

    Digital downloads take a day or two to be downloaded, and yet I still buy boxed games because of that fact. Same goes with all goods, and yet people are going online and waiting days or weeks to buy a product.

      A day or two to download? What are you still on dial up?!?!?! Im just on ADSL2+ and most games are downloaded in less time than it would take for me to drive down to GAME or EB, buy it, drive home!

      Also,

      Even if the Government drops the GST on locally sold goods (which they wont) most online prices are cheaper than 10% anyway....

      Harvery Norman and Co. need to stop living in the 90's and look at their supply chains and see where they can improve, its the same story as the music and film industries, they have been working the same way for decades now, they dont need to change, but in reality they need to drastically change to stay in the game.

        ADSL 2+ is available (affordably) in less places than you'd think.

    As others have said, a GST on imports will not affect buying stuff online as much as retailer hope it would.

    The problem is the fact that we as a country along with New Zealand are so far away from the rest of the world that if a retailer wishes to sell an item they first have to pay for the item and then pay to get it shipped,then once they get it in stock they have to sell it at a high level in order to make a profit.

    A prime example is starcraft 2. when it was released it was onsale for around 100 dollars in most stores, Dick smith however was selling for 70 dollars, which was at cost price to dick smith, they made no profit from selling starcraft 2.

    I dont comlain too much about the price of video games on sale from store like EB games> I do complain when i buy a game from steam and am forced to pay double the amount that the game is sold for in the USA because a greedy publisher (im looking at you T2I and Activision) because they can get away with it.

      Shipping is nowhere near as costly as the urban myths lead you to believe.

      Think about it. If it's possible for an individual to import a game from overseas (With the overseas store making a profit) and still save 40-50% on the price of the same game here, even if the publishers and distributors were paying the same to import the game (Which they aren't, since they both buy and ship in bulk), they would still be making a huge profit.

      Instead of complaining to their customers and the government, businesses should be complaining to their distributors and publishers, since they're the one's who will happily charge a wholesale price higher than what an individual can import a game for.

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