The advantage of buying from a local importer
What this means is that there is often an advantage to buying from Australian companies that do the grey importing for you.
While buying a product direct from an international online retailer might be a bit cheaper, getting the product from a local company that has sourced the product from overseas will offer you peace of mind when it comes to any product issues you may have.
It’s important to note, though, that online auctions are exempt from the ACCC’s mandated warranty, regardless of whether the seller is based in Australia or overseas.
“Buy it now” options on online auction sites like eBay are included, so consider using the purchase mechanic if you’re worried about a product working properly.
The other advantage of buying from a local company, especially when it comes to buying technical products, is that you are a lot less likely to buy something that isn’t compatible with local infrastructure.
Smartphones are the obvious example, given the complexity of different radio frequencies used by different networks around the world.
So where a popular smartphone released in Australia is guaranteed to work on an Australian network, the same handset may have a slightly different chipset on overseas models that mean it won’t work in Australia.
Obviously, this means that there is a danger of buying from international sellers, especially for consumers not savvy with the technical workings of their phones.
Some gadgets also face the risk of only coming with an international power plug, or worse, a lack of compatibility with Australia’s 240V power supply.
Given the potential for disaster when plugging in a 110 volt appliance into a 240 volt socket, there’s a real need for proper technical research into the purchase before pressing that Pay Now button.
On the other hand, companies like MobiCity and Kogan, which source products from overseas but sell from Australia, understand the compatibility issues and should only sell products that are guaranteed to work on Australian networks.
This makes the purchase a much safer option; especially given you get the added safety net of being entitled to a replacement or refund thanks to Australian consumer law if something doesn’t work.
How much can I expect to pay?
Click to enlarge
The table above [first published in October] shows the difference in pricing you can expect to pay for some of this year’s gadgets from a variety of sources, both local and international.
The first thing you’ll notice is that across the board, recommended retail prices appear higher in Australia than they are in the US.
Whether it’s an iPhone or a copy of Creative Suite from Adobe, Australians are paying more than our American cousins, with a price increase of anywhere between three per cent and 42 per cent.
But it’s never as simple as a simple mathematical formula. As mentioned previously, Australian RRPs include GST in the quoted price, whereas US pricing all has sales tax added on at the checkout.
This means that, depending on where you buy some of these gadgets from, it might actually end up cheaper buying from Australia over the States, if you were going to pay full recommended retail price.
In many cases, the Australian RRP still comes out as slightly more expensive, but the difference is now at an acceptable level, and can be justified by things like a higher cost of doing business here in Australia.
However, that doesn’t account for the fact that the web is an international marketplace. While some gadgets may end up cheaper in Australia when compared to the US, grey importers aren’t exclusively looking to the States for their products.
They are looking to Asia, the UK and Europe to source products at the best possible price, and the savings available when purchasing from around the world can be huge.
As the table shows, if you simply target the cheapest price online, the savings over both the Australian and the American RRPs can be massive.
It’s not all rosy though. Do a quick search for Creative Suite 6 from Adobe, and you are inundated with bargain prices for the software. But many of the sites offering to sell the imaging software don’t offer simple security measures like HTTPS or secure payments via services like PayPal.
While some may be legitimate, some feel like the digital version of buying products from the back of a truck in a dark alley, and as with real life, there is a real risk of being robbed or attacked when buying from shady characters.
As with any online purchase, it’s important to stay vigilant to protect yourself from being defrauded. The notion of saving $3,000 on CS6 sounds good now, but will it sound just as good after criminals have stolen your credit card details and robbed you blind?
If you were to walk into a Best Buy in the US and try and pick up a copy of Adobe CS6 Photoshop, you would be expected to drop $US700 for the software.
If you tried to buy the exact same piece of software in Australia, you can expect to part with $1,168 of your hard earned dollars.
That price difference remains, whether the software is purchased from a retail store or online in a digital-only format, so it’s not really surprising people are shopping overseas.
This disparity between local and international prices is not uncommon, and it’s not exclusive to technology purchases either. Across categories like cosmetics, apparel, snow gear and power tools, Australians are almost universally charged more.
It’s dubbed the Australia tax, and it is one of the prime reasons that Aussie shoppers are looking to the grey market to buy goods in increasing numbers.
Click below for the next page ... sales tax and getting your money back