Dick Smith goes dark grey

The grey market goes mainstream in Australia and New Zealand today with the relaunching of Dick Smith Online as a business which retails to consumers GST-free.

DickIt only remains for competitors such as JB HiFi and Harvey Norman to respond by adopting the GST-free Dick Smith retailing model for the market as we know it today to be thrown into disarray.

However the GST-free threshold will be dropped from July 1, 2017.

In March, online grey marketer Kogan purchased Dick Smith’s intellectual property, including the Dick Smith brand and trademarks, online businesses in Australia and New Zealand, customer databases and domain names, for an undisclosed price from the liquidatrors.

The dicksmith.com.au and dicksmith.co.nz websites have gone live today, one month ahead of schedule.

The customer database includes 1 million existing members of Dick Smith’s customer loyalty database.

An extensive range of Canon, Nikon, Sony, Panasonic and Fujifilm and Olympus cameras and lenses are offered.The Dick Smith Online prices significantly undercut competing reputable online camera discounters who source product from local authorised suppliers.

So for instance a Canon 100D with 18-55mm lens is $499 at Dick Smith, and $656 at DCW with the same lens. A Canon 70D body is only is $999 from Dick Smith, $1228 from DCW.

A Canon 750D body is $699 from Dick Smith, $876 from DCW. The 760D is $739 from Dick Smith, $926 from DCW. A Nikon D330 with 18-55mm lens is $439 from Dick Smith, $562 from DCW with the same lens. A Fujifilm XE2 with 18-55mm lens is $929 from Dick Smith, $1312 from DCW.

At the high end, even larger savings are available via Dick Smith. A Canon 5DS is $3589 from Dick Smith, $4698 from DCW. A 5DS R is $4019 at Dick Smiths, $4998 from DCW.

Dick-lensesDick Smith does not collect GST on products over $1000 but does advise customers: Orders  containing over $1000 worth of imported products may be subject to GST and duties.

The Australian Government collects these GST and Customs charges, meaning that you may be required to pay an additional amount once your goods arrive in Australia.

(Ironically, B&H in the US actually offers to collect GST and duties at point of purchase at forwards the funds to the ATO.)

While these prices for high-end gear will not attract professionals with an ABN, who can claim back the GST component from the ATO, well-heeled consumers will be attracted by the big savings and the probability that they won’t be charged any GST or duties.

The Dick Smith website actually suggest splitting an order over $1000 into separate parcels.

Dick Smith’s online sales have been tracking at an annual rate of about $95 million despite the negative publicity surrounding the company’s collapse.

Kogan currently has sales of about $250 million and is estimated to account for 1 per cent of the consumer electronics market.

Now, with a long-established Main Street brand, an extra million prospects on the database, and a business model which savagely exploits the GST-free loophole, the sky would seem to be the limit.

‘The increased buying power of the combined Dick Smith and Kogan.com businesses means that shoppers of both stores will benefit from better prices on the latest products,’ said David Shafer, executive director, Kogan.com and Dick Smith:

‘The efficiency with which we have been able to relaunch Dick Smith is the same efficiency that will see us delivery product and price leadership into the future.

‘All orders from today onwards come with the full backing of the Kogan.com business, and are supported by our first class Australian customer service team.’

 

 

 

 

 


2 thoughts on “Dick Smith goes dark grey

  1. Legally, how can retailers sell gst-free in Australia? If you have a bricks & mortar store based in Australia you have to charge gst.

  2. I am assuming that the declared value is going to be correct for the value of the product in the box? or is it going to be fudged like a lot of other grey importers do to try and get around their customers having to pay GST?

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