Why the Amazon GST Changes Represent a Win for Local Retailers

An Amazon GST change is set to be imposed, and the online retail giant is responding by blocking Australian access to its US platform.

As of July 1 2018, overseas retailers will be required to collect GST on all purchases under $1000 made by Australian consumers. While the move has been projected to generate hundreds of millions of dollars in federal revenue, Amazon have questioned the ‘workability of the legislation as a global business’ and chosen to severely limit the options that Australian consumers have to find a bargain.

Their decision has been met with frustration from Australian consumers, but the long-term repercussions remain to be seen. Considering the outrage, now is a great time for local retailers to showcase to Australian consumers that they represent a viable alternative.  

The Story of Amazon Down Under

Amazon launched an Australian service late in 2017, but the product range and prices on offer are often inferior to those available on Amazon overseas. Australian consumers often found it cheaper to import Amazon products from the United States. As of July 1, those who try to access the US site from Australia will be automatically redirected to the Australia platform.

Amazon have essentially dominated every market they turn their hand to thus far. Despite this, there is no reason why Australians won’t turn against the online giant if their competitive advantage is diminished. By geo-blocking Australian consumers from other Amazon options, the value proposition on offer is nowhere near as compelling as it once was.    

Amazon’s Australian Platform Is Not as Comprehensive as the US Version

It’s not just financial considerations that have encouraged Australian users to buy from the US Amazon platform – the range of goods on offer in the States is vastly superior. With the US site soon to be off-limits, it remains to be seen if Australians will stick with Amazon or take their business elsewhere.

For Australian retailers on Amazon, now represents a great time to sell products not currently available on the Australian store. With the new legislation due to take effect in a few weeks, there will likely be extra customers online hoping to beat the upcoming price rises.

Predictions about Amazon dominating the Australian online retailer space are based around the online giant putting serious effort into their Down Under offering. If the price difference on items is only negligible, Australian consumers will likely support homegrown retailers instead.

How Can Aussie Retailers Capitalise on Amazon GST Changes?

While these changes are a setback for Amazon’s Australian effort, they don’t necessarily change the long-term outlook for the company in Australia.

For Australian retailers, July 1 represents an ideal time to remind customers of the Amazon GST arrival while promoting your own products and services. If you aren’t already using CRM software or building a great customer experience through data usage, now is the time.

Australians love an underdog, especially if they can see that their business is appreciated and makes a positive difference. Set up an email marketing campaign for the new financial year that highlights the strengths of your enterprise, offers a compelling value proposition and gets customers excited about doing business with a local retailer. Don’t be afraid to let the culture and personality of your business shine through for all to see.

Build a Local Audience with Studio Culture

We live in a world where markets and legislations are ever-changing. When changes appear that can benefit your business, you need to act quickly to capitalise on their potential.

Studio Culture offer a wide selection of digital marketing services, including social media marketing, SEO, retargeting and email marketing. To work with our experienced team on a digital marketing strategy, make a connection with us at [email protected] or call 1300 200 113.

 

Brendan Golingan is an SEO Consultant.

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