Thursday, November 18, 2010
Dymocks offshore threat... Pleeeze!
Here's the ABC news report:
Don Grover's threat to move Dymock's online business offshore to escape the GST net is further evidence, if any were needed, that the current GST obsession of the Australian book trade is becoming deeply farcical!
Firstly, what about Australian books? Would Dymocks have Australian publishers ship them to Hong Kong so Dymocks can re-ship them back to the customer in Whyalla?
Well, perhaps Australian publishers would drop ship to Whyalla and Dymocks simply invoice the customer out of Hong Kong, thus saving on freight? Nope, won't work. Any supply from an Australian company is within the GST system and Dymocks won't get GST credits unless it charges the GST to the ultimate customer.
Well, perhaps Dymocks will only ship imported books from Hong Kong, with Australian titles coming from the Australian operation on a separate invoice? Very clumsy and confusing to customers, and how will the many local printings of overseas titles be handled, and local editions where local rights have been acquired?
I'm afraid whatever way you look at this it's a dud idea. The perfect case of a bad idea leading to a bad business strategy.
Don, it's only 10%. It's utterly irrelevant. It's not the main game. It's far from forming the basis of a radical avoidance strategy, which can only incur innumerable additional costs and bog you down in logistical dead ends. Your online business draws inventory from your main, richly and superbly stocked store in George St, Sydney. Divorce the two and both will surely and immeasurably suffer. I cannot believe otherwise.
Focus on the main game - publisher over-pricing. And revisit the prohibition on parallel importing. That's still the elephant in the room.