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  • #1040360
    Snow
    Member
    • Total posts: 28

    As an example lets look at the leading snowboarding brand in the world. Burton
    Burton has an Australian distributor.
    Burton will not let their stores in the US sell direct to Australia.
    If i buy 50 Burton boards in the US and offer them for sale here in Australia what will happen ?

    If i can get some sort of solid answers ill be stoked.

    #1040361
    victorng
    Member
    • Total posts: 626
    Snow, post: 49085 wrote:
    As an example lets look at the leading snowboarding brand in the world. Burton
    Burton has an Australian distributor.
    Burton will not let their stores in the US sell direct to Australia.
    If i buy 50 Burton boards in the US and offer them for sale here in Australia what will happen ?

    In my opinion, not a lot probably. It’s the classic example of a gray market. Some people will be happy buying from ‘non-authorised’ distributors, others will want to buy from authorised sources only.

    If it gets on the authorised distributor’s radar they may try to affect your supply / buy price via the overseas manufacturer / supplier.

    A potentially big issue is how you propose dealing with warranty claims. As an Australian seller, you’ll have warranty obligations under the Trade Practices Act (as someone mentioned above). These can’t be avoided (i.e. you can’t just refer people to the manufacturer) and unless you have an arrangement with your supplier, you may have to fend for yourself (which probably means giving a refund and making a loss).

    Cheers
    Victor

    ^ This isn’t legal advice – I’m just shooting the breeze

    #1040362
    Snow
    Member
    • Total posts: 28

    thanks victorng,
    yes i am factoring in warranty issues with my supply stores in the US.
    You can research this topic as much as you like its very hard to get solid answers, mainly unsubstantiated threats.
    Keep them coming please.

    #1040363
    mcboom
    Member
    • Total posts: 86

    setup a limited liability company (this will protect your house, car etc.) and go for it. There is not much the distributor can do as you are not importing couterfiet products and are purchasing from a bonda fide source in the US.

    #1040364
    PaulyT
    Member
    • Total posts: 56
    mcboom, post: 49172 wrote:
    setup a limited liability company (this will protect your house, car etc.) and go for it. There is not much the distributor can do as you are not importing couterfiet products and are purchasing from a bonda fide source in the US.

    Exactly, the local distributor wholesaler has the problem as his agreement with the manufacturer / supplier may not be exclusive.

    We are in a global market now and there will always be someone cheaper, better, faster.

    Just my opinion.

    #1040365
    Snow
    Member
    • Total posts: 28

    i think you have hit the nail on the head there Pauly. Stay ahead of the pack, offer quality products at discounted prices and top shelf service. And always go into business with the realization someone may try to provide a similar or same product at a discounted price. Dont get sour and cry ethics karma and its not fair, roll with the times and enjoy your success while it lasts.

    #1040366
    PaulyT
    Member
    • Total posts: 56
    Snow, post: 49225 wrote:
    i think you have hit the nail on the head there Pauly. Stay ahead of the pack, offer quality products at discounted prices and top shelf service. And always go into business with the realization someone may try to provide a similar or same product at a discounted price. Dont get sour and cry ethics karma and its not fair, roll with the times and enjoy your success while it lasts.

    Yes true, although hopefully when you build something you get repeat customers! I try to offer a quick easy purchase with top brand products and great pricing with after sales back up.

    And yes, it would be frustrating for some of the majors here in AUS as it is for me when people supply similar items into AUS from OS and they are delivered in 3 days with a similar or cheaper price to mine.

    Note – I did say similar as not all products are the same but consumers can choose……simple really!

    #1040367
    sixx
    Member
    • Total posts: 333

    I’m wondering whether or not the enterprise is sustainable.
    From a slightly different perspective (irrespective of karma, ethics, legalities etc.) licensing can usually be a rather large component to company revenue and by undermining this revenue stream, I dare say it would only be a matter of time before the ‘mother’ company (and or licensing agents) took measures to ensure this income continues. If all of a sudden distributors throughtout the world ceased to pay for licensing because they and their retailers could not compete (with Snow and co.) at retail level, I’m tipping the mother company wouldn’t be too impressed and would cut sources outside licensed agents.
    In the meantime, you’ve put money into a business, built a solid clientele and for what if your source was to be stopped?

    I can’t help but think distributors pay licensing fees for a reason. Exclusivity?

    If it were my product, to ensure these fees rolled in each year I would fight tooth and nail my fee paying distributors had exclusivity in the region they are licensed.

    I guess at the end of the day it’s a bit of punt and if you can make some quick cash whilst it lasts go for it.

    #1040368
    sixx
    Member
    • Total posts: 333
    victorng, post: 49094 wrote:
    In my opinion, not a lot probably. It’s the classic example of a gray market. Some people will be happy buying from ‘non-authorised’ distributors, others will want to buy from authorised sources only.

    If it gets on the authorised distributor’s radar they may try to affect your supply / buy price via the overseas manufacturer / supplier.

    A potentially big issue is how you propose dealing with warranty claims. As an Australian seller, you’ll have warranty obligations under the Trade Practices Act (as someone mentioned above). These can’t be avoided (i.e. you can’t just refer people to the manufacturer) and unless you have an arrangement with your supplier, you may have to fend for yourself (which probably means giving a refund and making a loss).

    Cheers
    Victor

    Hi Victor,

    Regarding Trademark Law in Australia, where does disclosure sit in regards to parallel importing of trademarked goods as to not cause confusion to consumers? Is it the responsibility of the parallel importer to make consumers aware they are not the Authorised Dealer as to not cause possible confusion?

    #1040369
    Snow
    Member
    • Total posts: 28

    hi sixx and thanks for your comments they make alot of sense. this business may not be sustainable as the price of the Aussie dollar would be a major factor. Who knows what the future holds as i may diversify over time and i may even scrap the whole idea. I suppose thats why im putting the time into this research. The licence holders simply have to factor this in when paying for distribution licenses now days as parallel importing is here to stay. For anyone interested read this article.
    http://www.theage.com.au/business/retailers-rock-the-boat-with-parallel-imports-20100114-ma5h.html
    cheers snow

    #1040370
    victorng
    Member
    • Total posts: 626
    sixx, post: 49242 wrote:
    Hi Victor,

    Regarding Trademark Law in Australia, where does disclosure sit in regards to parallel importing of trademarked goods as to not cause confusion to consumers? Is it the responsibility of the parallel importer to make consumers aware they are not the Authorised Dealer as to not cause possible confusion?

    Good question with a lot of tricky answers …

    Example 1: Company X is the overseas manufacturer and owns the Australian trade mark. If you import goods that the manufacturer / trade mark owner has applied the trade mark to, then you’re ok. The Trade Marks Act says this isn’t infringement.

    Example 2: Company X is the overseas manufacturer and owns the trade mark in another country. An unrelated company, Company Z, owns the identical Australian trade mark. Importing goods bearing the trade mark could land you in trouble. The exception in example 1 doesn’t apply. But it’s not straightforward – the mere importation and sale of goods bearing trade marks may not constitute use of the mark as a trade mark.

    There are actually a few more scenarios that I haven’t given examples for. It’s a complex and not well settled area of law. Pays to tread carefully…

    ^ This isn’t legal advice – I’m just shooting the breeze

    #1040371
    trakka
    Member
    • Total posts: 25

    Snow

    I know of several people that have looked into this.

    Victor raises some relevant points regarding TM.

    But as you mentioned the contract that the Australian distributor has can’t include other non related parties and their actions. If you are sourcing direct from the distributor in the agreement and they know what you are doing with the stock, then the Australian distributor will have to take it up with them directly – not you.

    However, if you are buying from another source. Or like some business owners I know, buying direct from retail stores or someone other than those in the Australian distributor contract (and there are no Trademark issues as raised by Vincent) there is little they can do – from my understanding.

    Yes warranty needs to be taken into consideration as per TPA.

    From my own experiences – a lot of customers have become more price sensitive in recent years. So, will they care if it is not the “authorised” Australia distributor if they are saving money?

    As someone else pointed out – it is competition. It is what happens to small retailers when a big company like Woolworths move into an area. (I say that from personal experience).

    The world has gone global and I think we need to adapt our business practices to suit.

    Snow – if you go ahead be prepared to deal with a lot of threats, intimidation and sometimes downright sabotage. You will need a lawyer to confirm the legal side of things. And possible to respond to the above. Factor that into your figures.

    #1040372
    sixx
    Member
    • Total posts: 333
    Snow, post: 49253 wrote:
    hi sixx and thanks for your comments they make alot of sense. this business may not be sustainable as the price of the Aussie dollar would be a major factor. Who knows what the future holds as i may diversify over time and i may even scrap the whole idea. I suppose thats why im putting the time into this research. The licence holders simply have to factor this in when paying for distribution licenses now days as parallel importing is here to stay. For anyone interested read this article.
    http://www.theage.com.au/business/retailers-rock-the-boat-with-parallel-imports-20100114-ma5h.html
    cheers snow

    Heya Snow, I wouldn’t rush into scraping anything yet, sounds like you’re onto a winner but if you can eliminate any percieved cons thens that’s gotta be a good thing so keep researching and I hope it all goes well.

    #1040373
    sixx
    Member
    • Total posts: 333
    victorng, post: 49313 wrote:
    Good question with a lot of tricky answers …

    Example 1: Company X is the overseas manufacturer and owns the Australian trade mark. If you import goods that the manufacturer / trade mark owner has applied the trade mark to, then you’re ok. The Trade Marks Act says this isn’t infringement.

    Example 2: Company X is the overseas manufacturer and owns the trade mark in another country. An unrelated company, Company Z, owns the identical Australian trade mark. Importing goods bearing the trade mark could land you in trouble. The exception in example 1 doesn’t apply. But it’s not straightforward – the mere importation and sale of goods bearing trade marks may not constitute use of the mark as a trade mark.

    There are actually a few more scenarios that I haven’t given examples for. It’s a complex and not well settled area of law. Pays to tread carefully…

    Thanks Victor,

    One other small question regarding disclosure and my bewilderment there is no provision in the law that allows consumers to make an informed buying decision relating to source.
    If it can be said that product quality is assessed from the retail shelf and not the quality in which the product leaves the manufaturer, and it can also be said licensed distributors and trademark owners invest heavily in safe inventory shipment and quality control, what happens when something goes wrong regarding a parallel importer and their source?
    An example, if I had bought a particular brand of bicycle tyre for years because I knew and trusted the brand, I had never had an issue with them so I continue to buy this brand. I see this brand advertised on an online site and make my purchase only to have this tyre blow out on me down a hill oneday and I end up in a wheelchair. A thorough investigation ensues and it is found the tyre was old and brittle from age and UV attack and it is found the tyre should never of been offered for sale and definately didn’t meet the trademark owners own quality codes. I’m not saying this is because of the parallel impoter, but for arguments sake lets say it had been stored in the sun in an Malay wharehouse for two years prior to landing in the impoters hands.
    Who cops it?
    I realise any tyre can blow at any given moment and my pension or payout will probably be met by State or Federal Govt. but just for hypothetical purposes, who would be liable for a product causing injury or death?
    The parallel importer?
    The parallel importers source?
    The trademark owner?
    The manufacturer?

    I realise it can be a case of buyer beware especially when something is offered alot cheaper than the “norm”, but I’m buying a brand I trust and am wondering where my opportunity is to make an informed decision because there is every chance the quality I have come to know with a particular brand may not be met.

    #1040374
    SheInspires
    Member
    • Total posts: 247

    From reading through this discussion the issue seems to be from a legal rather than ethical standpoint. So to get complete answers from that angle you’d need to spend time and money with the right legal service.

    Maybe there’s a different approach that’s connected more with drop shipping from the US and having a system setup so individual boards were sent directly from the US based on online sales?

    It would cost you individual shipping prices but that can be made competitive.

    It would save you the cost of retail rental and it might reduce your merchandise carrying risk.

    Maybe that’s worth exploring?

    You seem to have figured out your ethical values with the business. So as for business risk, figure out what you’re willing to lose over the business and how you’d want to minimise the risks. But professional advice is worth the investment in my view.

    Kind regards,
    Belinda

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