Australia Post service assists US retail sales

Australia Post has taken the extraordinary step (for a government-owned enterprise) of setting up a service, ShopMate, to make it easier and cheaper for Australian consumers to shop with US-based online retailers.

The service gives subscribers a fake US address in sale-tax-free Oregon (an Australia Post warehouse) to which to ship products, from where Australia Post on-ships to the consumer’s real address in Australia.

This directly impacts the photographic retail sector as online giant Amazon, among others, has a policy of not shipping cameras and other photographic gear to Australia, while some camera companies – notably Nikon – have blocked shipment from their US retailers to overseas markets, including Australia.

ShopMate cost is $24.95 per parcel, plus $5.95 per 500g. This actually undercuts current US retailer shipping rates: For a Canon EOS 70D with an 18-55mm kit lens, for instance, which weighs just under 1Kg, total ShopMate shipping costs are $36.85, while minimum shipping from B&H to Australia is $68.20. (Standard road shipping from US online retailers to US addresses tends to be free.) Shipping times are between 5 and 8 business days.

The idea, of course, is not new and is offered by other businesses, such as Price USA, Shipito and ShipToMe. However, ShopMate uses Australia Post’s own delivery network, and Australia Post’s involvement gives this kind of on-shipping far greater mainstream reach and legitimacy. It could be argued that Australia Post is seeking growth in its parcels business at the expense of Australian retailers, most of whom are also Australia Post customers.

The Australia Post press material focusses on allowing consumers to buy from retailers who don’t ship to Australia, and access to products not offered in Australia.

‘We know that Australian shoppers want access to international brands and products that are not available locally, but importantly they also want an international delivery and payment service they can trust,’ said Kelly Heintz, general manager, Parcel Post.

If a US merchant won’t accept Australian credit cards, Australia Post also offers ShopMate customers international travel cards which can be topped up with US dollars.

The ShopMate service makes little reference to consumers obligations to pay GST on products over $1000, simply referring  ShopMate customers to Australian Customs website homepage.

Australian retailers will not all see this development as an unalloyed benefit for the Australian economy. Here are a couple of comments following Inside Retailing’s report on ShopMate:

– If the Government allows them to do this and does not charge any GST or an import duty of any kind, they will have mass unemployment from all retailers. it just goes to show they do not have a clue of running the country on a long term basis.
– Thank you Australia Post for placing another nail in the coffin of Australian retail business (both large and small). How can an a Federal Australian Government department be allowed to facilitate, assist and promote ‘online’ customers to negate GST, import duties etc etc etc….Try explaining to staff the reasons for less hours of work or lay offs. Have a good look around and see how many small independent businesses are closing. Both sides of this debacle called Federal Government have no idea. Thank you Australia Post...