Parallel importing

[Snow]

Hi there,
first time poster so thanks in advance for any feedback. Ive been asking around in relation to the Parallel Importing of Ski / Snow sports / Surf / Skate gear from the USA.
My story is, i run a pretty flexible small business from home and have a bit of spare time on my hands. I have a friend in the USA who would like to send some gear to me. We have been through the costings and the gear would be landed here below the wholesale price i could get it if sourced through a local distributor.
I understand this is a grey area and i would be stepping on the feet of the local distributor but to keep prices down the business model would not work effectively if i operated at Australian rrp.
I have the opportunity to rent some space as my office and would offer my gear at low prices from my shop front / office.
Basically i figure if im sitting here all day working i may as well have some items for sale that i know a fair bit about.
I suppose my first question is if i purchased for instance 50 brand name snowboards from a markdown store in the USA that retailed here for $800.00 could i be stopped knowing there is a distributor licensed in Australia.
cheers

[Tim Davies]

Hi Snow,

'Stopped', probably not. I mean, there's not much the distributor can do about people going about bring in the product like you suggest. Annoyed, yes they would be.

Before you go too crazy, i'd just start with a really small voume which gives you the chance to test the water a bit. A few less than 50 units I mean. If you dont cop any greif, start to open it up a bit.

To me, it sounds like at the end of the day there's not much the local distributor could do, other than complain about it to their supplier in the USA.

You'd probably want to start small and slow, just in case you hit any snags. You wouldnt want to be stuck with 48 boards you cant get rid of.

Good luck.

[mexham]

Hi Snow,

I don't see how they could stop you. You just have to have a look on Ebay and see how many brand name items are obviously not being sold by authorised distributors.

If you are just selling small quantities you may slip under the eyes of the competitors but if you start taking some of their market share they might start to take a bit more notice.

Just ensure your costings take into account your import fees, GST, duties and taxes etc as these can quickly add a lot to your initial cost price.

[FS Concierge]

G'day Snow,

Thanks for joining the gang.

Here's hoping you can get your new business going. Sounds like it could be a nice little earner for you.

Good luck!
Jayne

[PaulyT]

Hi Snowy,
I am doing a similar thing except buying from US distributors and cutting out the Aussie distributor/wholesaler.

Just a few thoughts...

Do you want to tie yourself to opening hours in a office/shop?
You need to be cheaper than other stores and maybe Ebay.
Are there warranty issues to consider?
The opposite seasons will work well for you buying from there and selling here.
I know in my area large OE companies have tried to stop international trade, reported copyright violations and asked the ATO to check out importers in a effort to stop so called parallel imports.

All the best, just thought some of the above may be useful.

[Snow]

First of all thanks for the reply s :-)
I realize theres a few bridges to cross. I have tested my business idea in a small way importing these products on a small scale and re selling.
Its a new ball game if i intend to import a commercial quantity of goods with customs dutys, freight ect.
I have spoke with a few companies in the US and they are happy to negotiate on prices to accommodate the customs duty if i buy a commercial quantity.
For instance one supplier will give me 15% off the already discounted gear if i spend $10,000 us. This would put me in a reasonable position after paying customs dutys.
I spoke with a distributor in brief here in Australia who is the friend of a friend and he was quite adamant he would make a call to report counterfeit gear and customs would go through me.
My reply was if my paperwork was in order and purchases were of original gear i have nothing to worry about.
He then said they would go about cutting my supplier off in the USA.
Plenty of scare tactics to protect an inflated market.
His last words were by the time you pay import duty and freight you will end up been above wholesale price anyway and when you call me i will hang up on you.
Ive got news for him as some product i have sourced are landing here up to 50% lower than wholesale.
Keeping in mind this would only work while the Aussie dollar is strong.

[AussieFreight]

Hi Snow,

if you need any help on the importing side of things, send us an email and I'll get some costings etc for you if that would help you out at all.

caterina.zaini@aussiefreight.com

[King]

As part of your costings, sounds like you had better include a fair chunk for legal fees.
Personally I think both you and the US supplier need to think hard about ther ethics of it all. If the current AU distributor has the legal distribution rights, then that is something he will defend, and sightly so, esp if it is a branded product.
Read up on the Trade Practices Act - might be some worthwhile reading in there that will help shape your thoughts.
Basically, there are plenty of products you can import, of new brands, but good quality, with good margins, without creating ongoing angst.

Think Karma!!

[Snow]

what would the legal fees be for ?
does karma work in business ?
without been smart some importers rub their hands when the exchange rate changes. i know for a fact a guy thats running a nice profit when the dollars hovering around 60c US and doing back flips when its up round the 90c.
These big companies simply dont adjust their wholesale to Australia in relation to the $
They have Karma on toast.
Are these the ethics i should be worried about. ?

[Ray J]

I can probably add a little to this as I started a business early this year doing the same. I did get a phone call from the Australian distributor after a couple of months politely asking that I remove the imported products from sale. I followed their request and am now sourcing product from them which is no where near the price I was previously paying. I understand that they pay for the rights but when I can have a product shipped to my door from the US for $37 and I now pay $70 with a 25% discount from the Australian distributor this just does not seem fair. I want to run a legit business but things like this make it really hard for small business.