Recently there has been a lot of controversy in the media about paying GST on E-Commerce purchases under $1000.
Gerry Harvey, owner of
Hardly Normal Harvey Norman is an ambassador for the project, wanting orders online to be subject to GST no different to any other physical retail outlet. The reason he wants this to happen is in order to level the playing field he says in similar words.
All good Gerry, though there is just one catch – you know nothing about E-Commerce or why we (consumers) are flocking online.
It isn’t about dodging a mere 10% off the purchase price of our products – it is a raft of things and I think you need to understand the full picture to make better decisions on your stances.
Why do we shop online Mr Harvey?
For numerous reasons actually. All of which have nothing to do with GST.
Not to save 10%, but to save nearly 40-50%
I hear that Australian retailers enjoy margins above and beyond most developed countries. After working on a number of major E-Commerce projects in my previous role, I am assured this is not the case by the directors, however I still have my doubts.
Shopping online has nothing to do with GST saving. It has everything to do with the overall reduced price. Why buy a camera for $1000 when I could buy the same model for $400USD instead?
Even if the margins are not as good as people think they are for retailers, it probably indicates that shops need to find ways to streamline costs better to maximise those margins and pass the savings onto consumers.
E-Commerce is convenient, unlike many physical stores
Ever tried to buy a DVD, CD or Blu Ray in the lead up to Christmas at JB Hi-Fi? It is pure and utter chaos to say the least. Why would I spend 1 hour finding a car park to then be put into the bull pen of shoppers in Westfield? Instead I will use my time to do things I want to do, while one click ordering off Amazon with designated delivery dates.
Choice is a major factor
I often get quite excited by a new product purchase. I research it, compare it, hunt for it and often track down the exact specifications of what I need. Major shops tend not to have the choice or variety of products that I am after.
Brand new, dirt cheap and sitting on my doorstep
Shopping online guarantees a brand spanking new product, at a great price, delivered directly to my doorstep. A culmination of the above points all rolled into one.
My hopes for the future of commerce and online commerce
- Product prices are reduced in physical stores
- Australian retailers enter the E-Commerce market properly – no more rubbish attempts
- Retailers stop hiding behind GST and face up to years of money making madness that has finally ended
- I am a part of it. I want to have a retail E-Commerce play in the coming years, so time to get thinking AJ!