Do Direct Imports Make Good Sense?
Just recently, bricks and mortar retailer JB Hi-Fi announced it was starting up a direct sales model, selling high end cameras and lenses sourced directly from overseas at lower prices than standard retail. This isn’t a new concept; direct importing (sometimes referred to as grey market importing) is perfectly legal. The reason it works (from a money perspective) is because the tax implications are slightly different, and for the most part, directly imported goods are shipped straight to you; this means there’s no need for warehouses, stores, staff and so on. JB Hi-Fi’s just the latest (and certainly the largest) to have jumped on this particular bandwagon.
How cheap are we talking? Well, to use JB Hi-Fi’s site as an example, a Nikon D3100 SLR with 18-55mm lens sold as an Australian model sells for $777. JB Hi-Fi sells the same camera as a direct import for $596 plus $22 delivery, a $159 overall saving for the same goods.
So, cheaper goods for all? They can be — although it certainly pays to check for both shipping costs and comparable specials — but it’s also worth checking exactly what the warranty situation with directly imported goods.
It varies from product to product. In some cases (Apple being the most prominent) the warranty on goods is international, and as such their local service agents will repair or replace it if something goes wrong, as long as you’ve still got all the original paperwork. International warranties tend to be the exception, not the rule. Generally most technology vendors only offer warranties in the original country the goods came from, and if that’s not Australia, then the warranty is technically invalid. The problem there is that if you’re purchasing from a local retailer, Australian consumer law is rather strict; goods should be fit for the purpose they’re sold for, and excluding obvious user damage or mis-use, it’s the retailer’s problem if something goes wrong. What typically happens with direct import goods is that the retailer will accept them back, but then ship them back overseas so that the warranty does apply once more. They’ll be fixed or replaced, but this can be a lengthy process depending on shipping and evaluation times.
It also raises the issue of doing it yourself; using overseas technology suppliers to save even more money. Clearly there you’re choosing to deal with warranty problems yourself — an overseas retailer isn’t bound by Australian consumer laws — and you’ll have to be careful depending on what you’re ordering in terms of applicable taxes for importation.
There’s an argument for supporting local retail and the jobs it creates, but that’s as much a policy issue as anything else; as large parts of retail (and especially technology retail) are becoming online affairs, building their own job forces as they go. There’s certainly nothing illicit about direct importing, as long as you keep the tax and warranty issues in mind.