Recently, I've heard several CEO's of some very large and well known Retail Outlets, suggest Government must apply the GST to all goods exceeding $30. Essentially, to capture those people who choose to purchase their goods On Line. Whether or not those On Line vendors, are located in Australia, or abroad.

These same CEO's are complaining and aggrieved that their profits have been dramatically declining for some time. Blaming it exclusively on the notion that they're business is inhibited by the GST, while 'On Line' sellers are not similarly repressed.

It's also been reported by skilled retail specialists, the majority of complaints from buyers, are not just higher prices, charged by these major retailers, it's the complete lack of any service.

And when you do get decent service, often these's a total absence of any product knowledge, that should accompany that service.

There's a very well known retailing mogul who chooses to vocalize his own advertisments (ad nauseam). When asked why the Australian retaining sector is apparently failing, with many stores of all sizes and types closing, he blames everything and everybody, but his own industry.

Many of the solutions he seeks, are clearly within his own purview, and influence. Instead of always assigning blame on some hapless 'on line' vendor, either here or abroad.

Intersetingly, I've had personal experience shopping in this gentleman's stores. Occasionally, you'll get a sales person who does possess some direct product knowledge, consequently they'll furnish you with good advice and guidance.

Still there are others, who may well be able to answer your queries, but for whatever reason, decline to share that knowledge with you. Preferring to treat you, the prospective purchaser, as some type of ignorant fool. Therefore, making you feel quite ashamed and embarresed for even asking such a silly question ? You then quietly decamp from the store, as quickly and as unobtrusively as possible, with 'lips of string'.

Are we any less loyal and patriotic to Australia, by purchasing our 'stuff' on line and from abroad ? What do you all think ?

I too have found far more than one sales woman/man in that store as you describe.
Yet the boss if he knew would sack them.
If not service and advice why do we pay more to shop in person?
On line is looking better o sung wo

A recent shopping experience with the major retailers, does nothing to make me want to return to them.

I was after a product, I visited Harvey Norman, The Good Guys, Retravision, JB-Hi, and would walk out after about 10 minutes or more of trying to find a sales person.

Any way what ever happened to economic theory about competition decreasing prices.

"""
Are we any less loyal and patriotic to Australia, by purchasing our 'stuff' on line and from abroad ?
"""

Even patriotism has a cost and it's far more than I can bare in this country.

Doing business in Australia is too expensive for a myriad of reasons, mostly bought about by government policy. Trying to add GST to online purchases in the belief it's going to save their necks is pure idiocy.
Probably all it would do is cost the tax payer more than it's worth trying to manage it.

When I can buy something online and abroad for 300% to 500% less than I can buy it here, even if they do have an online presence at slightly reduced pricing. 10% on is not going to change a thing!

In Europe one had to attend technical college for 4 years to become a qualified sales person. Here any yokel with a big mouth or a cleavage can be a sales person & it shows in the service we get. Online shops have more personality than some of the staff in person here. Same goes for the food outlets & the tourism industry. It's all too basic, no finesse yet the charges are as high as a posh place overseas.

I wonder if I am living in a different country? I have always had courteous service from shop staff. Maybe it is because I don't expect to be treated like a prince.

As for on line shopping, there are a range of goods that I buy from overseas including electronics because the prices and postage are far lower. For example I bought a simple EU to Aus Adaptor incl postage for $1. I can't even start my car for that. GST on that would be 10c.

The limit for GST presently is > $1000 and the retailers want to bring it down to $50. The GST collected on say a $100 item is $10 for which customs have to separate the parcel, determine its value and try to collect the $10 from the purchaser. The cost to the customs is probably about $100 in admin and postage fees. (This information I got from someone working at the ATO).

The result is that the government spends roughly 4x what it collects, and the effect is increasing prices to consumers and pissing off the public, not generally considered a good move even for Labor.

I need some bearings for a project I'm working on, local supplier $27 each plus Gst, I'd have to pick them up. A pack of 10 via Ebay delivered for just over $16.

Possibly the local ones will be a higher quality but I doubt it. The local supplier is part of a large company and would be buying and shipping in bulk and should get some savings there.

In the past I've needed some bluetooth modules, that well known billionare retailer who blames the Gst sells them for about $30 each, a similar module via Ebay is available for around $1.50 each with free postage.

When I buy online the Gst is not a factor, prices which are a fraction of the local price and a far greater range of options are the driving forces.

R0bert

'afternoon all...

The claim by one contributor herein that,'...I've always had courteous service...' is indeed, lucky for them.

It's true, I've been fortunate enough to have exceptional service from some sales people. Though often, that terrific service is not matched with essential product knowledge.

Therefore, is it not dichotomous, that 'good service', should come with sound 'product knowledge' also ?

A highly desired outcome, I would've thought.

Nevertheless, there does appear to be an accord with us all, that pure economics does play a very important part as to whether we purchase our goods 'on line' or at the local store. After all a 'buck' is a 'buck' for all of us, I'd suspect ?

Further, what other considerations are there, that may induce many of us to purchases on line ?

Perhaps, it's because we have a much broader range/options of products; the convenience of shopping from home, together with delivery right to our front door. And, a decisive reason for some folk, there's total anomymity, thus privacy.

So would it be fair comment, in reply to the constant bleatings of these huge retailers, to suggest a couple things.

Try to provide a better skilled and more qualified 'sales associate' (as one correspondent stated above, a formal, 4 X year training course for all staff)

Where possible, reduce your profit margins; 'Prise' the bosses out of their office, on to the sales floor, observing, correcting and monitoring. And by so doing, manifestly aiding their customers.

Provide superior fringe benefits, by offering a better product warrantry period, with a reassuring back-up protocol, in a dedicated service department. In other words, give your customer a bigger bang for their buck.

Online shopping was always goimg to kill retail and, it will only get worse, with GST making little difference.

For the record, I think GST shoukd be charged on all purchases, online or in store.

As for decling service, what do we expect, when pretend shoppers waste shop attendants time, which must be paid for, only to find what they want, have the pros and cons explained, then go online and buy it.

I shop online myself, but I refuse to sourse my info from a paid staff member.

I warned of this years ago, but as usual I was shot down.

Retail days are numbered and the next big shift will be the likes of Coles and Wollies going into sheds, not shopping centers.

It's coming.

I don't do much shopping online. When I purchase an item, say, out of the United States, where does the transaction take place? Here? There? Am I taxed in the USA? If I go to the USA, buy myself a $100.00 item (say some sort of consumer electronics) and mail it home to myself, do I have to pay GST on that? What if I send a friend who lives there $100.00 to do the shopping and mailing for me?

I genuinely don't know the answers, but I think they have some relevance when it comes to the application of the GST to online purchases.

As for Coles and Woolworths disappearing into sheds, would that open a new niche for the small retailer? If I want an apple, or a bottle of milk, I tend to go to Woolworths because they are cheaper and easily accessible. I can bypass the cashiers and go to the self-serve checkouts, which I can't do at the corner store a couple of hundred metres away where the lady behind the counter is rude and charges double for the privilege of her bad service. However, without a supermarket nearby, where would I make those small purchases? I doubt I'd do it online - ordering an apple a day in advance and waiting around in the three-hour delivery window to have it dropped off. I'd suck it up, pay a higher price and buy from the little guy. Maybe not the MOST local (because her service would be unlikely to improve), but the next corner store along isn't so bad. Alas, there are four large supermarkets for me to pass before I get there.

What percentage of our supermarkets' income comes from small purchases? Could these small purchases keep a smaller retailer afloat?

Otokonoko, you say would these small purchases keep the small retailer afloat.

The simple answer is no.

You see wages, rent, consumables lease payment, etc etc, all represent a percentage of turnover and, when the percentage gets too high, the business fails.

Now im talking butcherwhosos here, It costs little more for an employee to make a $60 sale, as it does a $5 sale, esspecially in our Imdustry that generally has good service.

So once you factor the costs against that $5 sale, you are going backwards, unless you get enough $100 sales to make the numbers up.

As an industry, our average sale has fallen, thus amplifying the problem.

Another problem looming for retail is wages. They are too low, but the industry simply can't afford higher wages, hence, the auto checkout, soon to be, auto trolley.

Going back to butchering, in about 2000 a butcher was on about $17 per hour and an electrician was on about $17.50.

Now, the butcher has risen to about $21 and the electrician about $45.

Why, because food is one of the few items that can be substituted, for either an imported item, or an alternative.

Also, people can go without a new dress, but petrol is a must.

In years from now you may see the majors leaving retail altogether amd going soley online, however, they would have to drop meat, seafood and produce. May happen one day, who knows, it will depend on costs.

*they would have to drop meat, seafood and produce. May happen one day, who knows, it will depend on costs.*

Not so, Rehctub. Already there are companies in places like New York,
doing home deliveries of produce, meat, seafood, bread, milk, the
lot in one order. The thing is, this suits some people perfectly,
others not so. So we will see both continue, giving consumers more
choice.

Just to put things in perspective.

My last job was among other things, running a company marketing water/energy equipment to industry, & the retail trade. Lets do a case study on one item.

When we started manufacturing product X it cost $4.50 to make in Brisbane. 5 years later it cost $8.00, but it was a patented product which saved it's cost about 6 times a year, & still good value.

Along came a Taiwanese company who offered to deliver it, into our store ready for sale for $2.00. The quality was great, we gave up manufacturing. It had always been a hard thankless task to staff & control that part of the company.

Now our $2.00 had to be packaged for display in stores. Clam shell packaging cost $2.50, plus $0.75 for the printed material in the clam shell. Cost now $5.25.

It cost about $1.00 to pick, pack, invoice, & dispatch each item we sold, Cost now on a truck, $6.25.

Freight to a retailer in Brisbane averaged $6.00, Sydney $9.00, but to Perth about $16.75 each. Average delivery cost $11.75, so cost for me to supply into the average customers store, $18.00 each.

Remember this is for that $2.00 item.

I need a 45% mark up on my total cost of supplying any item, with cost of stocking & financing my sales, so I have to invoice this item at $26.10.

The store has to finance its premises, & stock holding, & pay wages, so he needs a similar 45% mark up on stocked items. Recommended retail price becomes $37.85.

No one is ripping any one off, this is the cost of doing business in the very wide open space of Oz. My $2.00 high quality item has to be sold, retail for $37.85.

Continued

Now it gets worse. Some smarty in the US likes our product. He gets a cheep Chinese copy made, landed in the US for $1.20. It's junk die cast stuff, not solid brass, but under the chrome who would know.

He'll sell it to you for just $8.50 in a brown paper bag. God how I wish I could get that mark up.

Just why his freight is only $4.50 I don't know, but it is. You get your brown paper bag, with it's junk product, in the letter box for $13.00, & you immediately tell everybody Oz businessmen are rip off merchants.

I have had my patent ripped off, but I've found they are useless things unless you can defend them in court. That's too expensive for me with 60 products, particularly as when I win the bloke declares he's bankrupt. He is doing the same again next week under a new name, & we are broke.

We may be slow but not totally stupid. We gave up the retail trade, & supplied bulk products to industry, hospitality & health care markets. A lot less people are employed, but who cares, Beattie could put them on the public service pay roll, & we could all party on, for a little while longer.

God I hope my kids are well established when this party turns toxic. I wonder how long it will be before Grease appears to us to be a cake walk.

Well that is where its all changing, Hasbeen. A sensible business
plan today would be to have the same quality as you made, made
in China for 2 bucks. They will make whatever you want. Package
and label all made in China, cost 50c. Order as much as Bunnings,
and ship it around in 50 tonne road trains, along with other goods.
Freight bugger all. Bunnings rent, about 10% of rent in a
shopping centre. Bunnings net margin, around 10%. The result,
happy consumers, who get value for money, happy shareholders who
own Bunnings shares :)

Hi there HASBEEN...

I do commiserate with you, I really do. As I type this little piece, I'm listening to Ross Greenwood (an econimist on 2GB Sydney) speak about Penalty Rates and other work practices that all small business operators need to contend with.

As a former employee of government all my life, I'm now only just beginning to realize just how tough it is for an employer, in small business, in this country, to remain anywhere competitive with countries where there's an abundance of cheap labour.

Is it correct, does anyone suppose, that it's these extraordinary and very generous work practices, that are essentially destroying this country's ability to compete in the world's market places ?

It's got me stumped ?

Hi o sung. This story is from before the current work practices, & I don't think the changes would have effected us greatly. We had very good staff, always paid well above the award, & looked to pay more, not less, if possible.

The people were flexible, so if one needed a couple of hours off, for something important, everyone covered for them, so they did not need to take sickies or tell lies.

The work practices may have had an effect on our cost of transport, & some suppliers, but basically the majority of on costs were due to distance. We ended up more profitable restricting our effort to Qld & NSW. We did supply the SA housing trust, & Vic housing commission, & builders anywhere, when our products were architect specified, but stayed home apart from that.

As you can see, when it costs 6 times as much to distribute a product as it does to make it, the whole thing becomes ridiculous. Fuel costs & fuel tax are a much bigger problem than wages in most small enterprises, except that like the carbon tax will do, the cumulative effect of a few dollars more wages in every area does add up eventually, & become a burden.

Then the fool councils have to make it harder. My neighbour can no longer keep his semi at home on his 10 acre block. He must rent a shed in town, for $1000 a week & park it there. This means he must own another car that spends its days in that shed, just to get to work. It adds another unproductive hour to his work day, & $1500 a week to his overheads, on just one bloody truck. Then they wonder why local government is unpopular.

Enough of this, it's too depressing. Today I did an oil change & service on my little old convertible, not a GST cent to pay, so I'll splurge on a drive down through the boarder ranges tomorrow, just because I can.

Hi there HASBEEN...

It is all too depressive, I agree.

The matter you related, apropos the Semi owner/driver who, because of some inane Council By-law, was required to rent, and park his rig some distance away. And by so doing, necessitating him to drive daily to and from his Rig, before he hauled anything.

Notwithstanding he had available, a ten acre piece of ground on which stood his home........ Gawd help us ?

I could just imagine, there'd be some By-laws person, simply a 'petty bureaucratic functionary', seated in their minuscule office space, musing upon what further mischief in which they could engage.

You never know, perhaps with little effort he/she could completely immobilize transportation throughout the entire municipality.

Yet, this'd be the same person who'd be first to 'bleat' about a transport strike. Wailing unconsolably, how life was so unfair.

Emmmm