Another answer to the retailers GST complaints – target customers in countries that have their own GST exemptions

Australian retailers have been urged to consider targeting overseas markets that also have generous GST-exempt thresholds to help stem any losses caused by local shoppers heading online to avoid higher prices.

The comments come as retail industry giants including Gerry Harvey and Bernie Brookes have vowed to continue an advertising campaign against online retailing, maintaining their calls for the Government to either drop GST for domestic retailing or add the tax to online sales.

But exporting advocates say this is a global game, and that existing retailers should investigate methods to export online, just as companies in the United States and Asia are sending goods to Australia cheaper than they can be bought locally.

Many American companies, including large department stores such as Sears, are offering special deals for Australians – these experts say you can, and should, do the same.

Jason Picknell, former Australia Post employee and founder of courier service ParcelExpress, says businesses need to find ways of exporting into new areas, and notes that many countries have generous tax exemption for consumers who shop offshore.

“There are plenty of Australian companies that are selling overseas, into Hong Kong and Europe, and have orders through there and are doing a lot of business. There is no reason why the same process being used to import goods here cannot be used to export into different markets.”

“In Europe it’s a little bit more difficult because the equivalent of the GST threshold is 18 euros, but the US has a $US200 threshold for a personal importation and New Zealand has a $NZ400 threshold. You don’t even have to get “around” legislation, because there is an opportunity here to expand.”

Picknell says when most companies send goods overseas, they assume the courier service or freight company is finding them the best deal. But often, he argues, this isn’t the case and SMEs need to do their best to ensure they are taking advantage of importation thresholds.

“What tends to happen is that people get stuck in a process, they trust their freight forwarding company to mitigate their costs. But most freight forwarders don’t understand how it works and the costs aren’t always the best.”

“There are many freight forwarding companies that don’t know how to apply the GST exemption process, so many companies are missing out. There is a disconnect here for online retailers.”

Ian Murray, executive director of the Australian Institute of Export, says the nature of online retailing means Australian businesses can’t just look in their own backyards – they need to expand internationally, specifically if they are selling unique products.

“At the end of the day, an online retailer is like any other business, and purely from a population view this is a good idea.”

“On top of that, the distribution capability is so much better than it was 15 years ago, with courier companies and even Australia Post, there are great opportunities for retailers to compete against some of these international companies.”

“There are a considerable number of things that Australian shops can sell that are thoroughly Australian, or are unique, and that can be sold overseas.”