Now more than ever we are all looking at ways to save a dollar when buying music equipment and with the convenience of shopping now just the click of a mouse, shopping online can be precarious especially when purchasing music gear from overseas businesses.
WARRANTY & RETURNING FAULTY GOODS
One of the first challenges you may encounter when you buy from an international company is that if there is some dispute with the goods you have bought you may find it very frustrating to get a resolution from them and it can also be a very long process. Be aware that purchasing from overseas does not entitle you to the same warranty conditions as it does when purchasing from a reputable Australian retailer. Generally, if you are asked to return a faulty item you may need to cover the initial cost of shipping and if the product you’ve sent back is found not to have a problem, you may also have to pay an administration and/or inspection fee. Should an item be deemed faulty, it’s likely all shipping expenses will be made by the buyer, not the seller. This can get rather costly, especially for larger items, with additional fees for things like insurance, tracking and signature on delivery.
However, if a dispute is not resolved within a reasonable amount of time, The International Consumer Protection and Enforcement Network (ICPEN) website (www.icpen.org) does provide information on how to resolve cross-border disputes, although remember consumer protection laws vary across different jurisdictions. Of course, there are reputable overseas businesses that do the right thing, and they will generally have an association with an Australian company, but these are few and far between.
You should be cautious about buying parallel imports online. These are products purchased from a seller who does not have the manufacturer’s specific approval to sell those products on the Australian marketplace.
Some obvious indications that a product may be a parallel import include:
- product is genuinely made overseas, but you can’t identify any relationship or association between the seller and the manufacturer
- the purchase price is way cheaper than you would ordinarily expect to pay for the product in Australia and from an authorized overseas dealer
- product is not available on the Australian market
- product has been refurbished rather than brand new.
- product may not be a typical Australian model and may be different from what you expect, for example, it may not be adapted for the local environment in Australia.
Although the product may carry a specific or popular brand name – if it is sold to you as a parallel import, the local distributor is not obligated to help you if the product develops a fault and you will need to contact the place of purchase, being outside Australia. Hence, the same issues may arise again by obtaining a resolution as previously stated.
OBSTACLES WHEN BUYING ELECTRONIC EQUIPMENT
Will the product work in Australia, especially being an electronic device and it relies on a particular technology, power supply or voltage to operate? It may be relatively easy to find an appropriate power supply from a store like Jaycar, but what if the unit is set to 110v as in the USA and is not multi-voltage or automatically switchable from 110v to 240v? You will then require what is commonly known as a step-down transformer but these have different power ratings so you have to get the right one and these can cost anywhere between $25 to $100+, depending on which one you require. Ultimately, we need to treat power with great respect as you can blow up your device if you are not careful, and there’s no warranty for blowing up your device!
GUITARS ON PLANES, TRAINS & AUTOMOBILES
What about buying a guitar online —you would need to ask yourself some questions:
- how will the guitar be supplied?
- will the guitar be packed well enough to endure its tour across the globe?
As the guitar will most likely be handled by different people during its journey, which could result in a surprise no one wants. You will also need to factor in the cost of set up, and a full set up will cost anywhere between $60-$150, depending on the instrument. Also is it a genuine musical instrument by the manufacturer? There are many accurate reproductions out there, and there’s no way you’d know until you get your hands on it. Personally, I would never buy a guitar online as I would want to feel the neck, the balance and even smell the guitar as well as hear the tone it produces. I’m certain there are many others out there that feel the same, so a bricks and mortar store is where you will find me when looking for a new axe. Having said that, there are many reputable online stores in Australia who do a great job of selling guitars online and have many happy customers due to their diligence and service they provide.
COSTS, COSTS and HIDDEN COSTS
Which brings us to our next point that everyone wants to know — is it cheaper to buy from overseas rather than locally in Australia?
We will focus specifically on comparing the US market, as that is where most of your Google search results will end up. Please be aware that US prices do not include shipping, GST or customs duties. You will also need to check the current exchange rates and associated fees with your chosen payment portal when buying in US currency –
For items under $1000, overseas companies that do AUD$75k+ of business with Australia are required to collect 10% GST. This will be added to your bill at the point of purchase.
If your item is over AUD$1000 in value, then Australian Customs will pull you up for GST and add another 5% in customs fees at the border. The GST is 10% of the total value of your product plus shipping/insurance plus customs duties! For example: if your shopping spree comes to a total of $AUD1550 after shipping and customs fees, then GST will be $155.
Then, of course, there are certain shipping companies that have their own additional fees for the customs handling. The other additional costs that can add up include slightly less favourable or delayed exchange rates offered by online payment systems such as PayPal. Don’t forget paying with certain Aussie credit cards might also incur an additional overseas transaction fee from your bank. Remember all services are run by organizations that profit from the exchange and transfer of money from your chosen payment method to the vendor – they are not free. Whilst these amounts are small, they can start to add up.
Let’s look at 2 different products – one priced below AUD $1000 and one above AUD $1000.
Here’s an example based on the current exchange rate between the USA and the AUD dollar. Let’s say you find a Native Instruments Maschine MK3 selling for USD $649 and in Australia, it is priced around $899. Let do the math.
- (The exchange rate is based as at the time of writing 17/8/2020) USD $649.00 = AUD $904.67
- Shipping costs = USD$35.00/AUD $49.00
- Import Duty = AUD $45.20
- Import GST AUD $94.92
- Total Price AUD = $1093.79
You have just paid almost $200.00 more, and this doesn’t include all the service fees from financial institutes or the risk of shipping and warranty issues!
Let’s look at another example of a product which is priced over AUD$1000. How about a Novation Summit 61-key Synthesiser with a price of USD$2199 versus the local AUD$3499.
- (The exchange rate is based as at the time of writing 17/8/2020)
- US $2199 = AUD $3066.75
- Shipping costs = USD $118.98 = AUD $165.92
- Import Duty = AUD $153.30
- Import GST AUD $321.93
- New Power Cable = AUD $10.00
- Total Price AUS = $3717.90
In this example, you are paying close to AUD $300 more!
Also, consider the exchange rate is never what you’d see on popular currency conversion websites. The actual rate can fluctuate dependent on the time of day and which foreign currency market the conversion is applied to. Then there’s also the delay of the exchange being implemented by the international seller.
Want to buy now and pay later? Well, Australian retailers offer payment options like Lay-by, Zip Pay or Rent to Buy so you can budget your payments over a period of time. When buying overseas this is not going to be an option, other than paying upfront and with no way of bartering with the vendor with a cheaper for cash (as my mother would say) enticement thrown in to negotiate a better price.
There you have it, we honestly believe that keeping your hard-earned here in Australia is the way to go, however that’s not to say that buying from overseas can have its advantages. Purchasing clothing, cosmetics and or beauty products (and I need a lot of them) have their place on the open market, but having once bought a pair of shoes from an overseas retailer, it led to a whole lot of problems and what I was expecting and what I received were 2 very different things! But that’s a story for another time.
Best advice – take your time, consider all the costs versus the time it will take to receive the product. Yes, there are opportunities to save money on smaller, boutique type brands and products that are underrepresented in Australia, although for all Australian distributed products, best to buy local — you’ll be contributing to the local economy too!