Retailers protecting profit margins

The feedback from consumers on the SMH website in response to the retailers tax campaign say it all. One complainant writes:

"These retailers are a disgrace. I particularly refer to booksellers. A quick tale; I received a $100 borders (and/or Angus and Robertson) voucher for Xmas. I compared what I could buy from borders.com.au to what I could buy from borders.com, it's American cousin. The answer? Half as much as from the American site. The problem isn't not paying tax. It's paying the "We're Australian so pay twice as much" tax. For the record, I won't be shopping at a retail store if I can avoid it in any way".

True enough. These companies are merely trying to protect their profit margins. Consider the difference here. Borders Books offers the paperback copy of 'Blaze of Glory" by Michael Pryor for:

1. $USD9.99 in the USA - see website

2. $USD17.50 in Australia - see website (I have adjusted for the exchange rate - near parity)

Why do Australian customers have to pay a premium. Are we to believe that shipping is the reason? I hardly think it costs that much to ship around the world. I would add just $1 for a book shipped in bulk. The cost of an eBook I suggest would also betray their campaign. I could not find any eBooks for sales on the Australian website to compare.

The problem with their argument is that - if they were at a competitive disadvantage they would recoup their losses with a 10% premium, or they would suffer a 10% lower profit margin. The fact that they are charging a 50-70% premium over foreign product, as Borders is, suggests that the foreign websites are offering inadequate competition.

The reality is that an Australian would not go to an offshore business in order to get a 10% difference. Let's remember that the Australian business is able to import the item in bulk, so gaining a bulk discount, whilst the foreign company is handling a single sales order.

I really think this campaign being launched by Australian retailers will backfire, and have the exact opposite affect. I suspect that they will do more in a week of campaigning to damage their brand image that any tax could do in a year of Sundays.