Read This BS Pro-Retailer Herald Article On Online Shopping Taxes

I was disappointed with the pathetic pro-retailer Herald article that seems like a rewritten press release from a Retailers Association moaner. I’m going to add my own comments and have some therapeutic ranting against stupid people who can’t figure out how to build sustainable business models in the easiest era to do business because of the internet.

Good news for New Zealand retailers now the Government has committed to look at taxing purchases made on overseas websites.

Oh really? Good news for a special interest group who suck so bad at business they can run to mummy & daddy government to prop up their failing business model, like Hollywood studios?

Inland Revenue and Customs will work together to review whether GST can be levied on international purchases worth less than $400.

They already work together. It’s called data sharing. Of course the government can impose a tax on all online purchases – we have one of the most excessively restrictive customs services in the world – which is why our drug market tends towards “home grown” products like cannabis and P.

A recent report found Kiwis have spent nearly $4 billion online in the past five years but more than a quarter of that is going offshore.

So this is a $200 million dollar per year “problem” for a special interest group? That implies 75% of online spending (before taking into account TradeMe purchases which includes Pay Now at actual retail stores who use TradeMe as an outsourced distribution channel) is with NZ retailers.

Retailers Association spokesperson John Albertson says that is making hard work for local retailers who are facing taxes on all sales regardless of whether they’re online or not.

Oh? So you finally get exposed to some competitive forces and your weak, inferior human being response is to have a moan instead of improving your business model? The internet has been around since the early 1990’s. Being a late adopter is not a reason to get protected from reality.

“It’s often quoted that some New Zealand retailers aren’t competitive, it’s far cheaper to buy overseas, etc.

“Well in some product categories that may well be true, but let’s start from the same starting point where we’re both paying GST.”

Part of the reason almost everything is cheaper overseas is because of fixed costs. When the UK has a population of 60 million and the US has a population of over 300 million then of course things will be cheaper there. The per-unit cost of a distribution centre or factory is negligible in larger markets.

Albertson says this is a fast growing problem for local retailers and it’s great to see something being done about it.

OK, this is exactly like the exporters vs consumers. But it’s the retailers vs consumers edition.

Everyone is a consumer, everyone can benefit from lower prices and higher consumer welfare. Most retailers are horrible people who suck at business management and on top of that do lame things to their employees like force them to purchase their products to wear. (Talk to girls who work retail fashion – and then be glad that ASOS is driving retail fashion out of business shipment by shipment).

The Retailers Association says GST needs to be introduced on purchases made on overseas websites immediately, or more Kiwi retailers are going to suffer.

OMG! Kiwi retailers are going to suffer! The humanity! A collective class of people who have failed to change their business model are earning a lower rate of return on their deployed capital! Oh wow! Sunset industries must be protected!

Albertson says the Government’s decision is a step in the right direction but the longer it takes to bring it into play, the bigger the problem will get.

“If you’re running a website in New Zealand, and selling online in New Zealand, you’re paying GST.

“It’s not a matter of bricks and mortar versus online, it’s actually within New Zealand versus outside of New Zealand.”

And there’s the kicker! 75% of online spending by your own figures is going to local retailers anyway. If you really dug into the “online shopping” data what you’d probably find is that those overseas purchases are for stuff that isn’t on sale locally or has such a price differential that it’s worth going through the hassle of registering at an overseas site and waiting however long for your order to show up.

What is so funny is that most of the biases are present in this guy’s deluded thought process: anti-foreign bias, anti-market bias and other indicators of economic ignorance.

There is also a stunning display of what I call “commercial ignorance” or inability to design a profitable business model when it is easier than ever to figure out how to make money on the internet if you have a quality product to sell.

There are a lot of online retail success stories that are New Zealand based including 1-Day, Torpedo7, Fishpond, TradeMe Stores, Barkers Mens Clothing and a lot of boutique clothing stores that sell brands you’ve never heard of but do hundreds of thousands of dollars a year in online sales.

This whole thing is so depressing. How weak and pathetic are these people that their solution to their problem of declining retail stores (but only if their product sucks, because some retail stores are doing really well) is to have a big moan to mummy & daddy government to “level the playing field”.

It’s disgusting. Every time a retail store closes because it didn’t have an active online presence, a beautiful unicorn is born and a child is saved from starvation in sub-Saharan Africa. If only “trained and skilled” Herald journalists could write about online retail success stories instead of giving airtime to a hater.