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May 9, 2011

Online retailing: the great Australian gouge

Australians are being charged far more for products than overseas consumers -- and not just by bricks-and-mortar outlets. Crikey examines the expensive goods and the retailers' hypocrisy.


Australians are paying far more than overseas consumers for an extensive range of products, despite the Australian dollar surging past parity with the US dollar. A Crikey analysis shows consumers sometimes pay more than twice as much for identical products sold in the United States, the United Kingdom and elsewhere.

The high comparative costs of books sold locally and the inexplicably higher prices at Apple’s iTunes store for Australians are well known. But the price differential extends across a number of products. The results further discredit the campaign by Australian retailers to target online shopping by demanding the government lower the GST threshold on goods purchased overseas.

In response to a Crikey piece showing the flawed maths behind the retailers’ campaign and claims wholesalers were stifling local online retailers, a number of readers pointed out alarming disparities between local prices and prices available online:

  • Pentax lenses costing nearly $850 locally are available for US$510 from a US site.
  • High-end audio equipment costs three times as much here as overseas.
  • Harley-Davidson rider Greg Bean sent extensive details of the remarkable lack of a price differential between Harleys sold in Australia and New Zealand, despite the different currency. Based on comparative dollar values, local Harley fans can expect to pay one-third more for the same bike here than in New Zealand, and for top-end models up to $9000-$11,000.
  • Cycling equipment: tyres costing $50-70 locally available online for less than $30; bike chains costing $50-60 available for under $40 from UK sites; cassettes costing up to $100 here are available for under $50 overseas.

A comparison of other goods using local and overseas sites readily yields more examples.

The same LG refrigerator costing $2500 at Harvey Norman — billionaire Gerry Harvey was the initial face of the retailers’ campaign against the internet — is available to American consumers from Amazon for just under US$1500. A Sharp microwave costing $199 at Harvey Norman is at US$85 from Amazon and US$74 at Walmart. A $150 drill at Bunnings is available for under US$130 at Amazon.

Even some cars are substantially cheaper. The same model Mazda6 costs under US$28,000 on the road in America compared to $47,000 here, a difference far in excess of the tariff of 5% still imposed on Australian consumers to prop up local manufacturing.

The one product Crikey examined that was competitive was television sets: large plasma TV sets cost about the same at Harvey Norman here as they cost in the US, and in fact may become slightly cheaper as the dollar rises.

The standard line from Australian retailers is that these price differentials are driven by the high cost of operating retail outlets in Australia — that they face high rent costs not faced by online retailers overseas, and they have to pay higher wages than US retailers.

That, however, doesn’t explain the differential in prices in niche products with minimal retail footprint like high-end audio or brand-name motorbikes. And it certainly doesn’t explain why online prices are higher in Australia.

Apple’s charging of Australians more for the same stream of 0s and 1s compared to Americans continues — the new Beastie Boys album currently costs Americans US$9.99 but more than twice as much, $20.99, via iTunes in Australia. And users of the game purchasing site Steam have long complained about price differentials on the site between Australian and US games, reflecting the pricing policies of distributors, with some popular games titles costing more than twice as much here as when downloaded in the US.

This “international price differentiation” is one of the issues under investigation by the Productivity Commission in its review of the retail industry. Katrina Lee, strategic policy adviser for Choice, says they want to see the PC inquiry focus more on the problems faced by consumers.

“The question is why bricks and mortar retailers can’t keep up and compete with online competitors,” she said. “Australians do want to buy locally, and there are successful local online retailers, both bricks-and-mortar operations and pure-play online operations. But the large retailers have relied on bricks-and-mortar outlets and offer limited sites and consumers are sick of it.

“Retailers blame the appreciation of the dollar but it should be reducing their costs too and we’re not seeing that.”

*Know of more examples of big price differences between the same product sourced locally and overseas? Crikey is compiling a list — send your tips to boss@crikey.com.au.

Correction: this article originally said the comparative data for Harley-Davidson motorbikes was between Australia, the US and New Zealand; the data only relates to Australia and New Zealand. Price differences between Australia and the US are greater still than those between Australia and New Zealand.


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78 thoughts on “Online retailing: the great Australian gouge

  1. wayne robinson

    I buy content for the Amazon Kindle App on my iPads (I have two) one linked to an Australian account, one to an American. For some eBooks, the Australian edition is cheaper. Usually, the American one is less expensive. The price is set by the respective publishers who have the e-Book rights in the different markets.


    Comparing prices with prices in America can be tricky, as all US prices are before taxes. There can be State taxes, and local (ie municipal) taxes – this explains why in some areas there will be an abundance of shops and outlets on one side of a road, and nothing on the other. Nevertheless, almost everything is cheaper in America – except tipping!

  3. bally

    I looked at these economics with a curled lip firmly in place. When I returned to Oz from Europe I was aghast at the price of things here. A good example is The Economist itself: in Australian dollars, it is $117 in the US, $155 in the UK, and a whopping $365 here, all for a year’s subs. No, the difference isn’t postage, it’s just much cheaper in the US.

  4. (the other) HR Nicholls

    The bike parts one is always a bugbear for cyclists and local bike shops are taking a hammering from the amount of business that goes to the major British online shops. I’m assuming it’s more complicate than this, but on the surface the price differential certainly appears to be pronounced when importer/distributors are part of the supply chain – Specialized dropped their prices after establishing a local office and Giant might even be a shade cheaper than the US equivalent, but the majority of the other brands get marked up. Tyres are often double the prices available online!

  5. herben

    I was at the filming of the Australian “Top gear” TV show the other day, where they did a piece on some big fast 4 door jag. I just can’t remember which one it is. The presenters loved the car, but said it was ridiculous. The car is over $400,000 in Australia. Same car in the US? Just a smidge over $100,000.

  6. mentalist

    The difference in prices in camera gear can be remarkable at times. Someone’s gouging, whether it be the retailer or wholesaler.

  7. Peter Bayley

    Network Storage device: US$850.00 Australia $1300.00. Disintermediation rules!

  8. michael r james

    I’m not sure it is fair to compare prices with the largest unified single-currency market in the world, with >300 million consumers, to one of the smallest and geographically isolated–and thinly spread over the 6th largest country–in the developed world. (Actually, let me change that statement: I am sure it is unfair and unreasonable.) I haven’t done any comparisons recently but I am pretty sure most of Europe would compare equally unfavourably to the US. And then there is Japan where even Japanese goods cost more than in the US.

    But, ok, an impartial expert look at the issue would be welcome, even if I remain rather more sceptical than BK about PC reports especially following the one on PIR which completely ignored international copyright laws and shipping costs. Comparing like with like would be a start: so comparing US online book prices with bricks-and-mortar stores in Oz is not the correct comparison; US bricks-and-mortar bookstores are having all the same troubles surviving as here. And with such a tiny market Australian online stores can not possibly compete with the behemoths in the US.

    Incidentally Apple iTunes took forever for Apple to introduce to Australia, entirely due to prolonged negotiation with the big labels. Clearly for them to be bothered with such a small market they expect higher margins, and probably in the end it was not worth Apple’s effort to resist it for the same reason. (I believe the long delay shows that Apple did resist it.) Of course it is copyright law which divides the world into regional markets that prevents Apple selling us music etc over the internet from their US sites at US prices.

    Bally 2.00 pm: quite a bit of the difference is postage; our market is too small for it to be printed here so it is air-freighted in.

  9. swoof

    Intrepid Travel offers anomalous pricing for its holidays depending on what country you register as ‘your’ country when on their website. For example, for the ‘Spirit of New Zealand Northbound’ tour, if you are on their USA website, the displayed cost is US$3,715 while if you are on their Australian website, the displayed cost for the same tour is AU$4,225. Hmmm …

  10. Shane

    One thing I do wonder about is if the Australia / US free trade agreement has any effect on the US based companies like Apple and Valve/Steam being able to actively discriminate against Australian consumers?

    eg. does the FTA provide Australians with some right to the same price as US consumers for exactly the same packets of 1s and 0s probably delivered from the same server?

  11. Tim

    With steam, it isn’t even that they are charging US customers $50USD and Australians $90AUD, they are charging Americans $50USD and Australians $90USD. The price discrimination is naked, it’s amazing. Revolutions have been started on less.

  12. mook schanker

    Wish I could believe you Michael, maybe a smidge on population density but that’s about it. For online retailers, geography shouldn’t be a hurdle except for the price of postage, especially when a lot of goods eminate from Asia….

    Price discrimination is rampant, but the wealth of information and knowledge savvy consumers now have at their fingertips from the internet is surely helping.

    And discrimination is not just Australian either. I have used a UK credit card to price check a hire car in the US, then used an Australian visa card, Australian is half the price!

    Also try bookdepository.com vs bookdepository.co.uk and the prices are usually different, same address, no VAT.

    If Australian retailers are too slow on the march to online sales then other countries will and have taken market share….Retailers want a free market flogging off overseas goods, well that extends to services I’m afraid….

  13. Aphra

    Have a look at this site.


    It’s thoroughly reliable, tells you how much you’ll pay for imported goods including postage and agents’ fees (and returns) and is organised from a state in the US that has no state taxes. This site has a human face, a published address and phone number and a verifiable record of success.

    Apple products can be legally purchased for Australians through this nifty business, for example.

  14. mook schanker

    Fantastic, just received an email from an Australian online retailer today, stating my order is shipped “subject to availability” even though when I placed the order it clearly said “available”. And to rub it in even more, stating “shipping can take 21 days to deliver”. What, is it coming by boat? It’s just a piece of clothing!

  15. drmick


    They want the market to determine the price but, want to disregard 70% of the market and bullshit to us.
    Do you know the some countries and providers still have, or have rediscovered people skills. They want your custom and are prepared to be humble, helpful and grateful for your custom. Hardly Normal cant wait to piss you off so they can jab some other poor bastard.

  16. drsmithy

    I’m not sure it is fair to compare prices with the largest unified single-currency market in the world, with >300 million consumers, to one of the smallest and geographically isolated — and thinly spread over the 6th largest country — in the developed world. (Actually, let me change that statement: I am sure it is unfair and unreasonable.)

    Why ?

    I haven’t done any comparisons recently but I am pretty sure most of Europe would compare equally unfavourably to the US. And then there is Japan where even Japanese goods cost more than in the US.

    In Europe, however, the price differentials are almost entirely due to duties and taxes aimed at propping up local markets – and they’re still not as large as they are here.

    Bally 2.00 pm: quite a bit of the difference is postage; our market is too small for it to be printed here so it is air-freighted in.

    I struggle to believe there isn’t a printer locally who they could contract with.

    An important fact to remember here is a large, large proportion of these goods are all be manufactured in China, Taiwan, and the like anyway – so shipping to Australia should actually be _less_ expensive.

    As I am soon heading home to Australia after a couple of years living in the USA, I am busily buying up a whole household worth of stuff to send back in the container. I estimate I’ll be able to save around twenty grand, even after accounting for the container and loading costs. I just wish the rules for importing vehicles weren’t so ridiculous, or I’d bring back a couple of motorbikes as well.

    Personally I believe the average Australian would be willing to pay 25%-30% “more” to support the local market, greater peace of mind, better customer service, simple recognition of a smaller market, etc, etc. I know I would. However, price differentials of 150%, 200%, 300% or more, are just flat-out gouging (even if not by the actual retailer), and no-one is going to put up with that when there are easy options.

  17. flyinglow

    On bike parts, talking to an acquaintance that runs a local shop, his view was it’s the distributors who are making a killing. He cited an example of a pedal company that dropped the local distributor and started selling pedal cleats for less than half what the distributor charged.
    From my experience and from talking with other road racers, we only use the locals for a bit of servicing or an emergency part. It’s understandable when I paid $4250 including duties and freight from Germany for a bike that was $9000 here. Interestingly, there are an increasing number of small operators who run online stores that source high-end components direct from the Taiwanese manufacturers that build for the named brands. You can get carbon wheels for a lot less than the big brands. So for wheels that are $3000 here, you can pay $1500 from the UK, or $1000 from someone like boydbikes.com.

    Another example dear to my heart is the cost of a software suite, ArcGIS. A desktop license for a component is $15000 in the US and sells for over $40000 here. I know a few companies that have bought the software through a US parent that hosts the license server while they consume it here.

  18. drsmithy

    Apple products can be legally purchased for Australians through this nifty business, for example.

    Just a word of warning that the standard warranty on Apple equipment will not cover you in Australia, for products purchased overseas. If you purchase the additional Applecare warranty, however, that includes international coverage.

    The same is true of many electronics products – another one that springs to mind is digital cameras: compact (ie: non-SLR) digicams are rarely covered by their warranty internationally.

  19. ianjohnno1

    The greatest differential I have experienced was for a Timex watch which bricks’n’mortar here in Oz had for the RRP of $189. Online from an Oz store was $150 and I eventually bought it online from the US for AU$50…including postage (10 days).

  20. Aphra

    Warranties are fully covered as the relevant address/purchaser is an agent in the US (in Oregon), not Australia. This is explained on the Australian web site. It’s just completed its first 15,000 sales and has been very successful.

  21. Mort

    I just spent $1300 (including postage) importing some high end saddlery.
    I could not find the identical products anywhere in Australia for less than $2100.
    Prefer to buy Australian wherever I can, but I get really pissed at getting ripped off that much.

  22. Scott

    DrSmithy :- Buyer and supplier power counts for a lot. As does business strategy. If I am a big retailer, like wallmart and amazon, I can negotiate with international manufacturers to sell products to me for lower prices (as I will buy in bulk). I can then sell many of these products at a reduced price and still be quite profitable (I will have lower margins, but a corresponding increase in the number of sales should ensure my profitability).
    Unfortunately, in Australia, this low margin, high turnover strategy doesn’t really work for big ticket items (as we don’t have the large consumer base that the US or Europe has). That explains why cars, harley davidson’s, fridges etc cost more here. Retailers need the higher margins to make up for lower number of sales.
    While currency is important in costings, there are a whole number of other considerations that go into the cost of a product. I think BK is being a little simplistic in his claims of Australians being “price gouged”

  23. drsmithy

    Warranties are fully covered as the relevant address/purchaser is an agent in the US (in Oregon), not Australia. This is explained on the Australian web site. It’s just completed its first 15,000 sales and has been very successful.

    Yes, I know how PriceUSA works.

    My point is that your device will not be covered by a warranty *in Australia*. So, if it breaks, it needs to be sent back to the USA (5-10 days shipping each way – possibly at your cost – plus probably another 5-10 days actually having it fixed/replaced) and hope whatever it is that has gone wrong is actually covered by the warranty.

    Buy Applecare, and you can take your device into any certified Apple seller in Australia.

  24. FunkyJ

    The lack of differential between Australia and New Zealand extends to more than just bikes.

    For example, a pair of Converse Chucks are NZ$70-80, which is about A$50. In Australia they’re A$70-80 or more.

    In Malaysia, you can get them for A$30 from the (legitimate) Converse Store.

    As to games, the reason is Australian retailers cried foul when Steam and other download services released games so cheaply.

    Retail outlets and the Australian publishing arms of the various companies involved basically threatened online distributors by threatening to ban their boxed product from their stores.

    Turns out this was all for naught, as game sales have tumbled world wide, game costs are still very high, and publishers now turn to Facebook and iOS to make a quick buck thus bypassing retail regardless.

  25. FunkyJ

    Oh, and Kotaku Australia have quite an in depth article about one game in particular which online distribution price was raised after retail complained.


  26. michael r james

    @DRSMITHY Posted Monday, 9 May 2011 at 3:31 pm |

    “Why ?”

    You must be disingenuous? You think a company like Amazon that dominates online retail for a market of 300 million domestic customers doesn’t wield this power to negotiate the best wholesale prices in the known universe from suppliers/manufacturers? Scale in retailing is almost everything.
    How many Harleys get sold in Oz each year versus the US? And Jags for that matter.

    Of course I am sure there is some degree of price gouging but, as usual, BK’s call for examples is producing a mishmash of the good, bad and ugly.

    Not only do we suffer from a small and widely dispersed market, and high shipping costs (and not just distance, relative low volumes) but we have shot ourselves in the foot several times over: some of the most absurd real estate costs in the world, especially commercial rents, combined with high labour costs (compared with the US but also to much of Europe).

  27. emily.r.crawford

    I’m just back from 5 years in the UK and am appalled at the completely rubbish, rip off treatment Aussie consumers are getting.

    Like Dr Smithy above, I did a big shop before leaving the UK, buying kitchen gear, clothes and books. Thank goodness. But I only wish I bought more.

    I cannot understand the outrageous prices!

    We just bought a stroller for under Au$500 from Amazon US (inc shippping) versus the exact same model for just under $1,000 in a shop in Aus. And it arrived in 6 days! How can retailers claim shipping costs for the high prices here when Amazon US only charged us $15 postage for a bulky stroller?

    And baby clothes! Good grief! I just stocked up at Marks and Spencer (UK dept store) and even in pounds plus postage, they are cheaper. For example, a 3 pack of all-in-one jumpsuits is £11 ($16)… A single Bonds jumpsuit is $20. WTF?!

    I really can’t feel very sympathetic to these sheltered, limited, technophobic protected retailers. Guys, this is how capitalism works.

  28. JRAPQQ

    Emily, has hi-lighted another reason – where I am, (1/2 way between Sydney and Brisbane) the normal delivery time for Australian sourced items is usually between one and two weeks. 6 days from the other side of the world is just another reason to buy on-line and avoid our own home-grown Australian gouged delivery delay

  29. green-orange

    “•Pentax lenses costing nearly $850 locally are available for US$510 from a US site.
    •High-end audio equipment costs three times as much here as overseas.
    •Cycling equipment: tyres costing $50-70 locally available online for less than $30; bike chains costing $50-60 available for under $40 from UK sites; cassettes costing up to $100 here are available for under $50 overseas.”

    But they may only sell one or two of these items _a year_.
    They do need to make some profit you know.

    “•Harley-Davidson rider Greg Bean sent extensive details of the remarkable price differential between US and Australian Harleys — and the even more bizarre lack of a price differential between Australian and New Zealand Harleys, despite the different currency. Local Harley fans can expect to pay one-third more for the same bike here than in the US, and for top-end models up to $9000-$11,000.”

    You can’t get Harleys in USA for anything near the retail price. The dealers always sell only up-spec models or refuse point blank to sell at RRP.

    “I’m not sure it is fair to compare prices with the largest unified single-currency market in the world, with >300 million consumers, to one of the smallest and geographically isolated — and thinly spread over the 6th largest country — in the developed world.”

    Australia is the MOST urbanised country in the world excluding antion states like Singapore.
    And virtually all the poplulation lives in just 4 cities, not “thinly spread” at all.

    Sorry, that excuse doesn’t wash.

  30. drsmithy

    You think a company like Amazon that dominates online retail for a market of 300 million domestic customers doesn’t wield this power to negotiate the best wholesale prices in the known universe from suppliers/manufacturers? Scale in retailing is almost everything.
    How many Harleys get sold in Oz each year versus the US? And Jags for that matter.

    Except even things that aren’t being sold by huge retail monsters like Amazon, are still 1/2 to 1/3 as much.

    Further, I struggle to see how the conditions you are described could produce price differentials of such magnitude without some other influence.

    I am just glad I am leaving friends in the US, and keeping my bank accounts and credit cards open, so that I will never have trouble purchasing items from there in the future.

    Someone, somewhere, is making shitloads of money from gouging Australian consumers. One way or another, that’s going to change – either their prices will have to come more inline with worldwide norms, or they’ll go out of business because everyone will buy overseas.

  31. mook schanker

    Scott/Michael, in consideration of items other than “large” items and buying power, yes I agree however Amazon didn’t exist several years ago. Why couldn’t an Australian retailer be the 1st mover and sell to the world? Or should we only accept monopolies if they’re Australian based (let alone Australian owned)….

  32. Venise Alstergren

    Three weeks ago I purchased-on line, from America- two dozen assorted nail polishes. A week later they arrived. The products come in a huge range of colours, and are made in the USA.

    In Oz we make some excellent nail polishes but nowhere near the colour range available to America. (I realise that 300 million people presents a much wider market). Also they have to compete with the imported products made in France, the United Arab Republic, and the USA. And people wonder why the Oz manufacturing industry has had the guts kicked out of it? Oh, and I paid 50% of the average price available in Oz.

    Trust little Johnny Howard to have done a ‘Free Trade’ agreement with America. It’s a free trade for America but what do we get out of it?

  33. Paul_J

    For example an Hyundai Tuscon is $24k usd , the same car here iX-35 is $42.5k. Both cars built in the same factory in Korea, so what gives.

  34. greglbean

    HARLEY DETAILS: Please note, the price differences shown on the link are comparing Harley prices in Australia and NZ. It is even more outrageous when compared to US prices.

    The link shows 2011 price comparisons for every HD model.

    It shows we pay 1/3 more for an HD in Aus than in NZ.

    Prices for both Aus and NZ are set by HD Aus in Ryde.

    Imports for Aus and NZ are by HD Aus in Ryde.

    NZ pays 15% GST to Aus 10%.

    The NZ market is smaller and thus less profitable.

    By rights HD’s should be more expensive in NZ but they are 1/3 less expensive there.

    HD Aus has virtually an identical price list for both Aus and NZ that does not consider the strength of the Aus currency. For example: 2011 Electra Glide Ultra Classic is ~ A$37,000 and also ~ NZ$37,000. It should be ~ A$27,750 and ~ NZ $ 37,000 based on exchange of NZ$1 = A$ 0.75.

    That’s ~ A$9,250 more in Aus than NZ without justification!

    If compared to the U.S., Australians pay almost $15,000 more!

    All arguments about market size, volume, taxes, shipping are not valid when HD Aus can sell bikes for 1/3 less in NZ than in Aus!!

  35. Anto

    This list goes on. Eyewear frames are also ridiculously overpriced here. I have just purchased a set of designer label frames from a US based onliner (inc. postage) for about 40% of what the retail store here charges. I could have bought the prescription lenses online too, but then claiming on my private health insurance would likely be problematic. Still, my total cost, online frames plus Aussie lenses (less rebate), will still be considerably less than what I would have to pay an Aussie retailer just for the frames alone.

  36. Bernard Keane

    Courtesy of Greg Bean pointing out my error, I’ve corrected the piece re Harley-Davidson bikes and noted the correction. I’ve also done some price checking to confirm that the disparity between Harleys available here and in the US is even greater than between here and NZ, in one case ~80% higher.

  37. tree

    I recently bought a couple of box sets of DVD/Blu-rays from Amazon UK (who happily ship them here unlike Amazon US). Well under half the price of the same at JB Hifi or EzyDVD in Oz and delivered to my door (free postage) from Glasgow via Germany and Abu Dhabi in 3 business days! I want to support local business, but not at that sort of price difference.

  38. Gerry Lamb

    Simple fact is it is getting cheaper to buy all sorts of products online and from overseas.

    Australian retailers are getting crunched. Australian manufacturers have been annihilated.

    We are getting crunched by Electricity bills – NSW electricity bills are going up 17.5% next month. WTF!!

    And now the Gillard Government want introduce a tax and bang up the cost on everything.

    All this based on Rudd’s promise of FuelWatch and GroceryWatch.

    Epic Fail.

  39. greglbean

    HARLEY DETAILS: A few additional bits of info.

    HD Australia’s purchases are worth about $135,000,000 in revenue to HD U.S. This is published in HD U.S’s annual financial statements.

    At $25,000 per average sale (my estimate) that is about 5,500 units. Or about 450 Harleys sold every month in Australia /NZ.

    While it is only about 3% of HD U.S.’s worldwide market, it is a damn good busines in Australia.

    If HD Australia do not feel it justifies some legitimate pricing I would gladly take it away from them!!

  40. tinydog

    Yes, Amazon and large retailers in the US and UK markets have the power to negotiate lower wholesale cost prices on items. But they’re also being supported to do that in the market by the product manufacturers themselves, who are often funding those huge discounts. It seems that manufacturers in Australia are old-fashioned too and don’t want to take a chance on online retailing because no retailer has taken the lead.

    Most people don’t realise that Amazon react to the market — they price match rather than set their own pace. So their prices reflect their local competition. This ends up meaning that no one is making any money at all on many products in the domestic market. It’s great for OS consumers though.

    It won’t be long until Amazon set up an Amazon India, I imagine – and this will be a pathway to setting up in Australia…

  41. Smithee

    Isn’t it interesting to see some of the “gouging apologists” jump through hoops trying to justify the local prices ? What a pitiful series of excuses they offer. But the truth is undeniable: It is cheaper for individuals to buy at US retail prices and have the items shipped one at a time to Australia.

    I’d like to see some of our alleged journalists do some digging and show exactly who gets what with the Australian prices. But you can be sure the local rip-off merchants will guard that information very carefully.

    I’d like to buy locally, but locals merchants generally aren’t interested in competing. They want to hang on to their margins while simultaneously squealing about unfair competition.

    Who needs them ? I’ll happily see them all go out of business.

  42. no_party_preferred

    I’ve said it before, I’ll say it again, it’s the middle men.

    I just boughts some parts from the US for a car I am restoring and even with GST and duties on car parts it came to $3600, the same thing here whould have cost anywhere between $4500 and $6000

  43. debbym

    I have tried to buy casual shoes recently Asics Tigers first and then Fitflops just the other day. The fitflops would have been $122US (before postage), they were $200 in the shops here.
    I had to buy the Fitflops here (for a present) because you can’t get past a certain point on the Amazon USA website, you are told you are not allowed to bring them into Australia and yet I have heard of other people bringing in more formal shoes. Is there a difference or did I do something wrong? It almost seems like protectionism in Australia to protect the local retailers.
    Asics (and Fitflops although they’re not as well known) seem hugely overpriced in Australia. Someone’s making a lot of money.

  44. MichaelS

    As a (now small) online retailer myself, with years of experience in the IT and electronics market, I can verify that it is the wholesalers/distributors who make sure the Australian prices remain high. One of the main products that I sell is made in Europe. Due to an “exclusive” agreement that manufacturer has with a sole wholesale distributor in Australia, I am forced to buy from that distributor; the manufacturer will not sell to me directly even though their “factory door” price is nearly 50% less than the wholesale Australian price. And, in the last two years, the exchange rate has improved by over 20% but guess what? the wholesaler’s price to me has stayed exactly the same…
    This is not an isolated example. Most technology manufacturers, from Apple down, have a local subsidiary and/or distributor that both sets the prices and bans competition. So it’s not the retailers (although I’m sure the big boys can share some blame), it’s the system!

  45. greglbean

    These comments highlight that the AUSTRALIAN COMPETITON AND CONSUMER COMMISSION (ACCC) is either in collusion with these organisations or is competely incompetent.

    The ACCC is the same group that cannot develop a policy to manage petrol price setting or food chain gouging, and frankly since blind freddy could solve these problems one can only assume collusion.

    For example, if the ACCC said petrol prices could only be adjusted once a week and must be publicised 1 week in advance, the petrol price would stabilise tomorrow. Competition would be honest and consumers would not be screwed by daily fluctuations.

    Middle men cannot control a free market! Only Government collusion permits this to occur!

  46. botswana bob

    Pity we cannot buy our groceries on line from overseas sellers. There was a recent report that Australians pay among the world’s highest prices for groceries due to our food store duopoly.(Government has found it just to hard to do anything about the problem)
    People are buying on-line for the prices but also for the convenience and the wider choice. The business model of Gerry (unAustralian) Harvey and his mates is crook. Drive through traffic to a shopping centre, probably pay for parking, make your way through a coughing and sneezing crowd to the store and try to attract the attention of a bored shoppie who will tell you what you want isn’t in stock. Compare to a wide choice and reasonable prices from Amazon with home delivery in about a fortnight.

  47. minigmgoit

    Music equipment such as instruments and recording gear is ridiculously expensive down here. Furthermore there is a very limited selection on offer.
    I have priced up trips to the US and am busy saving to make the trip worthwhile. Generally the price is about 1/3 of that here.

  48. Barry 09

    Try that Australian Kogan site for electronics etc , cheap tv’s ,i purchased a Cyclonic bagless vacuum cleaner for $69 on a friday deals and $25 del. He is in Melbourne and i am in qld. Works well and came with a power head and acc’s . You can leave feedback on his site (Bad and Good ). You can buy cheaper new models by buying in advance and having a delivery date a month ahead. He seems to want to build stuff that his customers ask for ? Gerry would never do that , just box A or Box B .

  49. Kevin

    Just purchased a keyboard from US store, price including postage $455usd, best online price in Australia $699aud plus postage. Recommend retail price in Oz $999. Item is made in Taiwan so who is making all the profit?

  50. drsmithy

    Another example I was reminded of today:

    A Weber Summit S-470 BBQ costs about US$1,500. The closest equivalent model in Australia (E-470) is around AUD$4,300.

    (Several eBay sellers are offering worldwide shipping for $395 – so even landed in Australia and after paying GST, it’ll still only cost you about half the local price.)

  51. robcig

    Harley Davidson Australia have been gouging their customers for years!!! I have owned HD’s for about five years, and learnt early on that you DO NOT buy anything from their stores. They are arrogant, and their customer service stinks!! The first item I bought (from the manufacturer direct), was a HD leather jacket, for $300 delivered to my front door. The same jacket, made by the same people was offered to me by a HD store, $700. NO THANKS!! I have bought many many items direct from Harley stores online, or resellers on E Bay, (estimated up to $5000). You are covered also if you use Paypal. I believe HD in Ryde have wised up cause their retail sales have dropped, and the US sites will no longer sell to international markets after August 1. No third line forcing there Mr ACCC!
    I will never buy a brand new bike either. They offer one price and there is no negotiating. This strategy won’t last long as buyers become more astute. Unfortunately, too many overweight middle aged men, don’t care how much they cost, as they are buying an image, a lifestyle. HD, are masters at marketing their products. Good news is Kawasaki and Triumph have dropped their prices, and I’m sure others will follow. I love my bike, but I hate the way HD Australia treats us!!

    PS: I wonder what next years Moto Guzzi California has to offer??

  52. abarker


    How difficult would it be to import a Harley from NZ brand new? Or, for that matter, the USA? I have felt we are being ripped off after comparing the US website to Australia’s a while ago, and this just confirms it.

    While I understand getting one from the US may be more difficult, this just makes me want to hop across the pond on a bike buying holiday, and ship one back.

  53. drsmithy

    How difficult would it be to import a Harley from NZ brand new? Or, for that matter, the USA?

    Importing vehicles, if you are not a returning expat who has owned it for at least 12 months (or it’s very old), is a nightmare. It’s rarely worth it unless the vehicle is quite unique, or the price difference is truly massive (in dollar terms rather than proportions).

    The rules have recently tightened up, as well, making it even more difficult. Obviously some of the automakers have been drumming up some protectionism.

  54. robcig

    ABARKER, I feel your pain. Have a look at the US Ebay site, and you’ll be gobsmacked as to how cheap they are. Unless you have a licence to import, it is a nightmare. There are people who do it, but it is very difficult. Next best thing is to boycott the brand, and buy European or Japanese. (Yes I know it’s a Harley and if I have to explain yada yada. If Holden or Ford treated you as badly, you’d buy a Toyota or Mazda)..

  55. Sir Lunchalot

    I bought Kaspersky Internet Security Softwware from the US website, rather than from the Australian one at almost half the price and its the same product.

    I used a fake US address and they emaild me a software key.

    Too easy

  56. Venise Alstergren

    DEBBYM: 9 May @ 5:06 pm I made the comment that what few manufacturing companies are left in this country have to fight the government. I was talking about nail-polishes purchased on-line, made in America, vast range of colours and about 50% cheaper than the Oz product.

    The Oz manufacturer has to compete against-wait for it-The same American company which sent me the order, France, and another wait for it-the United Arab Republic. How can we cop this sort of competition?

  57. swoof

    Trend Micro sent me a renewal reminder for a 12 month subscription for Trend Micro Titanium for AUD$99.95, stating this was a reduction of $30 on the normal price. After a web search, I bought the same product (within Australia) for $22 plus postage.

  58. FunkyJ

    Here’s something interesting:

    After the issue with the AU$ Witcher 2 pricing disparity on Good Old Games, they’ve decided to drop the whole Geo-IP range determination they (and other online game services) do.

    What this means is new users from Australia can sign up and register as living in the USA, and get USA prices from GOG.


  59. SBH

    Robcig not only do they gouge but they sell a product that underperforms just about every other motorcycle on the market. The only area a Harley is out in front is what might be called ‘style’. I am an unworthy troll Iknow but geez buy a Duc.

  60. Duggy the DC3

    Look up Dermlite DL3 on http://www.Delasco.com – $1295 USD or $1200 AUD after conversion (www.xe.com) Compare with an Australian Site http://www.medshop.com.au – $ 1925 AUD

    Is it anywonder we are Buying OS?

  61. barryco

    Well let’s try flying. No delivery costs there.
    Go to the British Airways web site and check a flight Sydney-London return.
    Cost – around $2,300

    Go to the UK BA site and check flight costs in GBP London-Sydney return….about $1,000 less.

    For the same seats in the same damn planes. OK – there may be some tax and surcharge differences but please….

    Let’s mount the barricades!

  62. drsmithy

    Well let’s try flying.

    Well, maybe not the best example as airfares have quite possible the most baroque, obfuscated and opaque pricing structure of any good or service on the planet (with the possible exception of healthcare in the USA).

  63. michael r james

    I wrote this last night but didn’t post because reading the other whinging dumb posts I decided it was hopeless trying for a meaningful discussion. But Steve Keen has made almost the same (bleed’n obvious) points in his Crikey article today.
    I think the Harley sales really point to an important issue. There must be a market for the stupid things. There are middle aged beer-bellied blokes with more money than sense to pay those inflated prices for an empty “lifestyle icon” (which they barely use). Cashed-up bogans of which there are vastly more here than in NZ. Likewise for cars. People are willing to pay inflated prices for a Hyundai! We buy one million new cars every year (causing the paradox that there are so many recent-model cars on the secondhand market they are bargains). Are they paying $50k cash for a Harley? Of course not, it is all financed via our inflated property market. And that includes the financial merchants feeding off this industry and who represent a considerable fraction of the Harley market.

    Needless to say it is unsustainable.

    Not only do we have more than one trillion dollars of housing loans but more trillions of our national wealth tied up in unproductive property. I do not think Australians understand how this flows through the economy into everything. The debt is 88% of GDP and obviously pumps up our consumerist economy—ie. INFLATES EVERYTHING. Everyone has to have salaries to continue feeding this homeowner and consumer fetish. Commercial real estate is nuts, adversely affecting almost every retailer in the country. It is all very reminiscent of the UK which suffers the same problem.

    Yet, the benefit of high property prices is purely transient to a small(ish) sliver of society and a sliver in time. Australia is not investing in productive capacity (and I wouldn’t count mining infrastructure even if it was funded from our own funds which it is not), we are putting everything into shiny Harleys, new cars every few years, tacky overpriced McMansions 40 km out in exurban deserts and maybe $40 billion in freeways in the last decade in a hopeless attempt to solve the sprawl problem (but actually feeding the need for two and three car families) etc. etc.

    And GerryL 6.33 pm, those utility prices are going up precisely because we have failed to invest in appropriate infrastructure, failed to invest in energy saving, allowed poor planning law (eaveless houses in a semi-tropical country!) or overspent on absurd infrastructure (desal plants, another $15 billion). Did you really believe Australia could continue forever with electricity prices one third those of Japan, one half those of Europe and even cheaper than the in-denial US of A? An idiot president once said “the American way of life is not negotiable”, shortly before reality slapped him and the country in the face. Guess what? The laws of nature and economics do not ask our permission before delivering their outcomes.

  64. Shane

    I think one of the most insidious things happening is the local Australian wholesalers/retailers whinging back up the channel to head office in UK or USA – and then getting them to change things so they WILL NOT sell online to Australia anymore.

    Heaps of places now refuse to ship to Australia at the behest of their local “partners” or implement technical measures to automatically try and charge you a higher price for the same goods or service (like Steam or itunes).

    I dont mind the local people charging high prices if I can readily bypass them and order online – but it really annoys me when they get online sales to Australians prevented. Surely that must be a competition issue?

  65. Yekirc

    There is a massive disparity between US and Australian HIFI prices: Please see the following examples in the Klipsch Palladium range from Klapp Hifi

    U.S. MSRP pricing is as follows: the P-39F, P-38F and P-37F are priced at $20,000, $12,000 and $8,000 per pair respectively.
    The Australian pricing is $40,000, $29,000 and $20,000 per pair respectively…

    How can there be such a difference in price??

    There are many other examples of other Klipsch speaker products suffering the same outrageous mark-up…

    I contacted Klapp regarding these issues, and they stated that it was the importer who set the price, and they have no control over this. I then contacted the importer who failed to communicate with me…(greedy basket weavers…)

    I will never buy Klipsch speakers in Australia! Research before you spend a penny – name and shame.

    I contacted Klipsch US and they stated, “…unfortunately we have no control over pricing overseas…”

    Greedy distributers and hi end high-fi shops are unfortunately capitalising even more on the exchange rate than before.

  66. abarker

    Damn Michael… I think you’re reading a bit too much into it.

    I’ll have cash to pay for a Motorbike (loving the Harley Iron 883 for the look, but the Sportster is a better buy I feel) in 12 months, when my bonus rolls in. It’s not from property inflation or equity mate or anything else. I’ll ride it every day in fact it will be my primary mode of transport.

    And I would have said that not so much property investors buy them but anyone who wants one, be they bikies, older middle aged men, corporate managers who ride on weekends, or those (like me) who aren’t anyone special, just addicted to the wind on your face and the sound of the engine.

  67. drsmithy

    Of course not, it is all financed via our inflated property market.

    These sorts of pricing differentials have been around a lot longer than Australia’s property bubble. I was buying computer equipment in the late 1990s from the US for 1/2 to 2/3 the cost of buying locally (even after currency conversion and shipping).

    The reason it’s become more high profile now, is that a) the dollar is strong, b) people are a lot more internet savvy, and c) it’s now a LOT easier and safer to have goods shipped from the US.

  68. green-orange

    Pretty unimpressive.

    A bunch of people have complained about the most obscure items of which retailers may only sell three or four a year.

    Harley Davidsons are not sold anywhere near retail in USA and furthermore they have to pass a completely different set of design rules which are ridiculously stringent and add greatly to the cost of selling them here.

    You have made a comparison of the _cheapest_ items you could find which are sold as a premium brand in this country.
    They don’t have sub-brand products like “Rank Arena” and “TCL” in the US, only the main brands. So what may be considered a “premium” brand here is not there.
    But they are not the same products. A Panasonic TV sold here as a sub-brand may be sold as a Panasonic in USA.
    Just because they have the same model no. doesn’t mean they are made to the same standards. They are not the same as they have a different power supply to start with.

  69. michael r james

    @DRSMITHY Posted Tuesday, 10 May 2011 at 3:00 pm

    I beg to differ. In 2001 I returned to Oz from >20 years os, (half in UK, half in France). At the time the exchange rate was close to its then long-term trend, it took A$3 to buy £1, which was doubly lucky for me because I converted my ridiculous UK property profits at just the right time, and of course put it into Brisbane property–which looked surreally underpriced. But not for long. UK consumables looked horribly expensive then; I just found some DVDs in my collection that cost £17 which was >$50, and this was a discounted price (yes, DVD prices have come down everywhere but at the time I compared them with Oz and USA, the UK prices were incredible, undiscounted they were £25-30; French were worse!).

    The last decade has seen all this turn around. Just the price of ordinary old cheese has almost doubled in this time. It is made to feel even worse (by people like Emily above, who have not experienced the ups and downs over the long term) due to the exact halving of the UK currency.

    But as an economist pointed out on ABC radio this morning, the reality is that our wages have outpaced this increase in living costs. He claimed, with some truth, that what makes everything seem worse today is that now everyone (under 60) expects instant gratification: shiny new cars, toys (Harleys, jetskis, giant McMansions as their first house etc; private schooling, costly preschool daycare). The only thing I would quibble with is that the official CPI is a total travesty; for example it omits mortgage repayments because they are classified as investments.

    And ABARKER at 2:46 pm, the only way in which your statement could be true is if you have paid off your mortgage? Including any second or third homes you might “own”. And BTW, you are a ridiculous fashion victim (see SBH 12.32 pm). Incidentally don’t go for any long rides on the thing: I remember seeing Peter Fonda complain that the ride from New Orleans to LA (in the making of Easy Rider) almost crippled him because the “sissy bars” meant your arms were above your shoulders–in a position our human physiology was never designed for.

  70. davirob

    A bunch of people have complained about the most obscure items of which retailers may only sell three or four a year/GREEN-ORANGE. I’d say a bunch of people on a smallish subscriber only site have made mention of things they are familiar with.When this was bought up in msm a month or two ago lots of posters had heaps to say.Most had the same experiences(with a variety of products) as talked about here.

  71. abarker

    @ Michael – so because I have a mortgage, every single dollar I earn should go to this, regardless of how I earn it… does that include entertainment I have to give up as well? A bottle of wine and a dinner out?

    What about my lights, can I turn them on or should that money go to paying off my mortgage?

    As for no long rides and being a fashion victim… man you seem like a real fun guy.

  72. drsmithy

    A bunch of people have complained about the most obscure items of which retailers may only sell three or four a year.

    Looking back through the items listed, I’m not sure where you get an idea like that from. About the only thing that would even come close to “a few sales a year” territory is the super-high-end audio equipment mentioned by “YEKIRC”.

    Harley Davidsons are not sold anywhere near retail in USA and furthermore they have to pass a completely different set of design rules which are ridiculously stringent and add greatly to the cost of selling them here.

    They’re not that different. If they really were “completely different”, a) H-D simply wouldn’t sell here because the market wouldn’t be big enough to justify the expense, and b) you wouldn’t be able to roll one off a boat after owning it in America for the magical period of 12 months and get it registered with barely more than a lifted eyebrow.

    You have made a comparison of the _cheapest_ items you could find which are sold as a premium brand in this country.

    Rest assured that, say, Weber Barbecues are just as much of an expensive, premium brand in the USA as they are in Australia.

    Just because they have the same model no. doesn’t mean they are made to the same standards. They are not the same as they have a different power supply to start with.

    Actually the same model number pretty much guarantees it’s exactly the same product. Indeed, years ago many vendors of technology products deliberately started using different model numbers for exactly the same products, to make it harder for comparisons across markets to be made. The power supply rating tells you nothing, as multi-voltage hardware is commonplace (these days it almost certainly costs the manufacturer *more* to have two country-specific PSUs vs a single global model). I could walk into a Best Buy and half the TVs on the wall will be rated for 110-240V @ 50-60Hz.

  73. michael r james

    @ABARKER Posted Tuesday, 10 May 2011 at 3:53 pm

    If you lived in most of Europe you would simply not be able to have a mortgage that is so leveraged; and you would have had to put a much bigger deposit down (I do not know what it is now–Europe is slowly adopting Anglo finance habits, the dummies–but it used to be minimum of 20%). These things keep housing more affordable and obviously reduce speculation in second and third homes etc. Their sensible capital gains taxes prevent property churn; but they are not unfair as they reduce every extra year you own the property you live in, until about year 15 if I remember, it is zero. (If you have valid reasons for selling before then, you can. It is a fair system designed to reduce the anglo speculative frenzy.)

    As to your last statement, it is a matter of definition of “fun”. In my student days I rode motorbikes until my third accident (all collisions with cars whose fault it was in all cases) came close to killing me, I gave it up. I think Australia is no place to ride a bike, particularly in cities but also on highways. Our roads are too crap, there are few alternatives so you have to share with B-doubles and the drivers are awful. Funny enough, the best place is the US where the advice given by John Pirsig in Zen and the Art of Motorcycle Maintenance still holds: stick to the secondary highways and it is great touring with little traffic and no pressure to keep up with flowing traffic including trucks etc, and they pass thru all the small towns etc. I’m pretty sure I will never do anything on a motorbike again but, despite latent carbon guilt, a road trip USA is a great thing. I have done various bits of Highway 1 including LA to SF, Seattle to SF, but still harbor a fantasy of doing the whole thing: San Diego to Vancouver, maybe even on to the Alaskan highway all the way to the end of the continent!

  74. drsmithy

    I beg to differ.

    You may beg to differ, but I can assure you I wasn’t taking the risk (substantially higher 15 years ago) of purchasing stuff from the USA on a whim. The savings were real, and easily anywhere from 30-50%. This was even with the exchange rate in $0.70 territory.

    I will concede that computer equipment may have been a special case. I didn’t really look at much else due to the aforementioned much greater problems and risks with purchasing and shipping most items back then.

  75. michael r james

    @DRSMITHY Posted Tuesday, 10 May 2011 at 4:27 pm

    You will note that I was not talking about the USA. As per my first post, I think it is absurd to ever imagine our retail prices can ever be competitive with a market the size of the USA.

    I actually find Oz prices on most electronics to be not so bad, unless you are a label fashion victim. True, you often have to wait 6-12 months. Even Hong Kong is not so special, except for the sheer selection and all the latest models that do not reach Australia for a while (though even that is changing). This is the China effect–many such consumables have dropped in price. Ditto for DVDs which are only expensive here if you are impatient to buy as new release (which of course genY is); after a few months their price soon drops. And are as cheap or cheaper than anywhere else (even HK has very expensive CDs & DVDs–unless of course you buy pirate which most do there.)

    On the other hand I find clothes prices outrageous, almost all made in China or even lower-cost places like Vietnam, Philipines etc. How an ordinary shirt ends up at $200 in department stores makes you wonder. Especially when the workers or even manufacturers are only getting a few dollars of that ticket price.

    I hate the duopolies we have but essentially we get what we deserve. If people buy Harleys at any price it is their fault–they are fashion victims refusing to exercise their discrimination. People buying new-release DVDs at >$30 do not get my sympathy. Someone is paying >$200 for very ordinary shirts and jeans etc. (Woody Allen joke: Q: Why did God invent Gentiles? A: Someone has to buy retail.) Buying a new car in Australia is a suckers game. The market can only sustain silly prices with outrageous markups because someone out there is buying it.

  76. Venise Alstergren

    Compared with Harley Davidsons nail polish must seem very unimportant, but to me the subject of imported nail polish delineates why Australian manufacturing is crucified.

    In Oz we have a couple of companies-actually made in Australia-producing nail-polish. As we are a small market we don’t get the range of colours available to the US market. Revlon, made in the USA, is the dominant company, priced at $11:00+ per bottle. O.P.I- all colours made in America @ $4.19 a bottle, The nearest Oz company in price ($9.95 a bottle) is Natio,. Then there is Mode-Creative Brands Pty Ltd @ $2:45 per bottle, these is made in the United Arab Republic, and in China. Another company Nailfinity (Max Factor) which costs about $5: a bottle (not too sure on the price), is made in France. Another Oz company, Pulse-the Pharmacy chain-sells nail polish which is sourced in Oz sells for $5:95 dollars a bottle, Then there are a couple of companies making Revital, made in Oz, and Hard as Nails-I don’t have I know it’s expensive but it is a remedial product. How can an Oz company compete with this lot, unless it sources from the UAE?

    How can a product sourced in the UAE shipped to Oz and selling at $2:45 not be a popular brand?

    I am not claiming to have knowledge that other people haven’t known for years. However, I thought of putting it in the context of a bottle of nail polish because everyone knows the size.

  77. Frustrated reader

    I’m just curious, would people be happy if we dropped the minimum wage in Australia to $7.25p/hr from $15 as it is in America, and withdrew compulsory employer contribution to super? Make things cheaper to buy in Australia.
    We could also withdraw Australian standards, which costs people like small toy importers an extra $100K a year (which retailers in the USA don’t have to pay – or meet for that matter to sell into Australia).
    If the Australian retailer sold a product not meeting Australian standards, they face a $1.1million fine, an international retailer is not subject to these laws.
    For those that are intersted in the environment, most goods are imported into Australia by boat – which emits 0.0087 kg CO2-eq per tonne.km, most online purchases are sent by air which emits 1.04 kg CO2-eq per tonne.km

  78. tinman_au

    Hell, you don’t even have to go over seas to get better prices online:

    UMart Online:

    Samsung S2 1Tb external drive: $118.00


    Microsoft Office Professional 2010: $370.00


    Harvey Norman:

    Samsung S2 1Tb external drive: $199

    Microsoft Office Professional 2010: $788 (!)


    The UMart prices aren’t even their specials where they can discount a lot more.

    So much for the “It’s the GST!!1” argument…it’s actually “Were greedy bastards!!!” that’s the problem…

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