Here’s the problem – household budgets are in lockdown mode and presents ain’t cheap.
Australians are spending less because they’re concerned interest rates will start rising soon, making their personal chunk of Australia’s record-high mortgage debt even more daunting. At the same time, pay increases have become as rare as hen’s teeth in this economy.
Consumer spending in Australia has, in fact, just recorded its worst slump since 2010. So, is Christmas cancelled? Not if you do some planning right now and make use of lower prices overseas.
Australians usually spend upwards of $950 each over the Christmas break, according to the Commonwealth Bank, with an average of almost $600 going toward presents.
Western Australia holds the title of most generous gift givers, with a state average of $646, closely followed by NSW at $643 spent on presents per person, while South Australians are the nation’s scrooges at only $505.
Those numbers are higher than they need to be because of a factor known as the Australia tax, which makes for an unpleasant comparison to the shopping experience found in many other countries. With time still on their side, Aussie shoppers can take their business elsewhere and save a packet. Here are some of the ways how.
Thinking a pair of Beats by Dr Dre would hit the mark for someone you love? A pair of the headphones will set you back $398 from a bricks-and-mortar Aussie retailer, while buying from the US Amazon will cost you only $220. Here’s where it gets interesting – Amazon US doesn’t ship these and many other goods to Australia.
Your best bet to snag a bargain is to use one of the many services that reship from America to your front door. Australia Post offers ShopMate which would charge about $27.90 on the headphones which will still net you a total saving of $140 over what you’ll pay here.
2. Clothes & accessories
An Aussie could get a pair of Levi jeans in the US for 77 per cent less than here. But you could post your Levis for $6.40 then reship your jeans for about $40 and still pay less than half of what a pair would cost you here.
(Graphics: Ying Z. Wang)
Bikes are the absolute classic when it comes to Christmas gifts and you’ll often save hundreds buying online. Some might baulk at the idea of a $20-50 cost for shipping, but many online bike stores such as Wiggle offer free tracked shipping.
A Fuji Finest 2.3 Women’s Road bike can be snapped up for just over $500 online, while looking for the exact same bike here would cost you $850 or more, a price increase of 35 per cent.
(Graphics: Ying Z. Wang)
4. Beauty products & grooming
A particular pain point for many Aussies buying makeup, beauty and grooming products or anything of the like is the high price we’re slugged.
For something like a Lancome anti-ageing cream you’d be shocked to see the huge 66.6 per cent mark-up Aussies pay over the Americans. While a thoughtful gift of America’s O’Doud’s aftershave is 33.3 per cent more expensive for Aussie hipsters. With shipping costs factored in you’ll still come out ahead.
5. Homeware & appliances
The Nutribullet, the in-vogue blender of the last few years retails for about $89 in the US while here, even when buying discount from Kogan, you’d expect to pay $168 or more, a difference of 88.75 per cent. Although a word of warning for Aussie buyers of American electronics – many American and UK products run on half the voltage we do here in Australia, so carefully check the product details before buying.
(Graphics: Ying Z. Wang)
Bonus point. Fidget spinners and other ‘must-have’ crazes
Just a quick note for parents who’ve got kids pleading for the latest craze that’s sweeping the nation’s schools. A canny fidget spinner buyer could pay as little as $1, while the going-rate is between $5 and $7 here, a difference of 400 to 600 per cent. Keep it in mind for the next must have … thing.
Tim Harcourt, University of NSW JW Neville Fellowship Economist, said the reason we cop higher prices in Australia was previously often to do with the small size of our market and the distance between here and where things were made.
“That’s changed somewhat, but it’s still an issue of scale for some companies,” he said.
He said one of the key issues was the lack of competition which allows businesses to charge higher prices with little threat of competition. But the arrival of Amazon might change that.
Despite some businessmen like Harvey Norman’s owner Gerry Harvey downplaying the looming hit to established retail, Macquarie Bank predicts Amazon will grab a $14.5 billion slice of the Australian retail pie by 2025.
Meanwhile by mid-next year GST charges will be extended to all imported items, including those worth less than $1,000. That means online shoppers have one more Christmas to use the overseas online strategy to save a packet of cash.
Better make use of the overseas bargains for Christmas 2017… while you can.
originally published by Domain.com.au