Get the best from online shopping

RICHARD MEADOWS
Last updated 05:00 27/02/2013
online shopping
Getty Images
CHING CHING: Online shopping on foreign websites is an increasingly popular pastime.

Relevant offers

Money

Real estate: Are you better off to buy or rent? Price claims fool Australian shoppers Auckland affordable housing target beaten Men feeling pinch go without power Mortgages still elude first-home buyers Shock in store for term deposit savers 'Liar' lawyer jailed for $2m Ponzi scheme Ditch tradition and enjoy a stress-free Christmas Don’t wait to prepare for financial life without a spouse Another Gull station docks pay after thefts

The persistently high exchange rate has caused much griping and belly-aching from a segment of exporters and manufacturers.

The kiwi is currently the strongest it has ever been against the British pound, and not far off all-time highs against the greenback.

But whether that's 'good' or 'bad' is a largely matter of perspective. It's a bit like the weather. A long, dry summer might be ruinous for farmers, but it's lovely for holiday-makers.

For kiwi consumers, there's plenty of sunshine forecast ahead as the high dollar boosts our purchasing power ever higher.

The most obvious advantage is being able to buy imported stuff cheaper in the stores.

But why not cut out the middleman?

Online shopping on foreign websites is an increasingly popular pastime, made increasingly attractive by the generous exchange rate.

We're still a bit slow on the uptake. A PwC/ Frost & Sullivan report last year found that overseas shopping accounted for only 35 per cent of Kiwi's online expenditure, less than half that of Australia.

Nevertheless, brick-and-mortar retailers have good reason to feel threatened. NZ Post reports the number of international parcels coming into the country jumped 13 per cent between 2009/10 and 2010/11.

The latest figures aren't available yet, but the continued ascent of the kiwi will no doubt only increase the flow.

We came up with a sample shopping list of hot items to see how much we could save on Levi's jeans, Nike sneakers, the 50 Shades of Gray boxed set of books, the iPhone 5, and Elizabeth Arden perfume.

While we scored massive bargains on some items, on others buying locally was sometimes the better option.

TAPPING BIGGER MARKETS

The first item on the list is Levi's 501 jeans. At an Auckland Jeans West store, a pair of the classic denim pants retail for the hefty sum of $130.

On Amazon the same jeans are on sale for anywhere between US$36 and US$55, many of which are heavily discounted.

At the current exchange rate, even the upper end is about NZ$65, or half the price charged locally.

Clearly shopping abroad wins this round.

But what about postage?

Many websites frustratingly refuse to ship outside the country they're based in, and others charge like wounded bulls for doing so.

Enter the mail-forwarding companies, including NZ Post's YouShop and rival carrier Prezoom.

Ad Feedback

Mail-forwarding firms provide customers with a unique American shipping address (and a UK one with Prezoom) which can then be used to forward mail on to New Zealand.

The cost of doing so is based on the greater of the weight or the volume of the parcel size, and can be calculated here for Prezoom and here for YouShop.

To send a pair of Levi's home would cost as little as $20-$30 depending on how they were packaged.

The mail-forwarding scene is expanding at the moment, and competition has already helped drive prices down substantially.

The real kicker with YouShop and Prezoom is that their warehouses are strategically situated in the few US states which don't charge sales tax - which means you pay roughly 10 per cent less than many American consumers.

NASTY SURPRISES

Many an unwary shopper has shopped up a storm on an overseas website, only to be confronted by a whopping tax bill from Customs as their package comes over the border.

The Levi's were cheap enough to pass through without attracting any attention, because Customs doesn't bother charging duty or GST when the total charges would be less than $60.

It has developed a handy calculator for working out whether your order will slide under the threshold, but it's not always straightforward.

The rule of thumb is generally that imports less than $400 will escape taxes. But that changes with certain categories - like shoes- which are subject to a 5 per cent duty charge.

Let's look at buying a pair of Nike 2013 Air Max sneakers. On the New Zealand high street, the latest pair of kicks will set you back $259, so that's what we're aiming to beat.

Amazon stocks the sneakers for US$175 (NZ$209), and postage for the bulky shoes works out to about another $40.

Already, it's a borderline saving. But then Customs will slap on duty of $21, GST of $41, and a flat import transaction fee of $38.

The total bill comes to $349 - far more than it would cost to buy the shoes locally.

But wait - it gets worse.

If you used Prezoom to send the shoes rather than Amazon direct, you'd pick up another $90 high value charge on top of all the Customs fees for failing to slip under the threshold.

The funny thing about Customs charges is they're an all-or-nothing proposition.

The same Nikes are on sale for 110 pounds in the UK (NZ$198). Because they're a little cheaper, and the postage is cheaper, they just slip under the threshold, and therefore attract no extra fees.

Theoretically the UK pair will save you $40, or 15 per cent.

But it's a very close call - and it's Customs who determine the final value. In this situation, it's almost certainly better to play it safe and buy locally.

FREE SHIPPING, LOW PRICES

One of the items on the list was the raunchy 50 Shades of Grey trilogy of female 'literature'- bought for a friend of course.

Books and DVDs not only aren't subject to duty fees, they're often vastly cheaper to buy online than in physical bookshops.

Whitcoulls is charging $63.96 for the trilogy, and Paper Plus a whopping $78.

Meanwhile, the UK-based Bookdepository has the same item on sale for $22.85 pounds, or NZ$41.21- with free delivery.

Amazon has it even cheaper at 10.99 pounds, which with shipping works out to roughly the same price.

That's a saving of at least $22, or 36 per cent off local prices.

SLIPPING ACROSS THE BORDER

We're also hunting for a shiny new iPhone 5. While the gadgets are $100-$150 cheaper in the US and UK, any savings would be wiped out by the aforementioned duty and GST.

However, Customs' catch rate is somewhat hit-and-miss. You may even be offered a fake receipt with a lower purchase price by some retailers to get expensive goods through.

Don't succumb to the temptation. Customs has beefed up its penalties recently, which include criminal prosecution, seizure of the imported goods and hefty fines.

Unless there are huge price disparities or you're prepared to take a punt on getting it through, you're often better off buying expensive electronics locally.

BANNED ITEMS

The last thing to tick off our shopping list was a bottle of Elizabeth Arden perfume.

We'd just finished scouting out the best prices when we realised it was almost impossible to actually get the smelly stuff sent here.

Perfume contains alcohol, which makes it one of several goods that can be a pain to try and get delivered.

It comes down to the individual policies of the freight company involved- here are the exclusions for NZ Post, Prezoom, and DHL, for example.

Other imports are prohibited outright by Customs - but unless you're after a marijuana pipe or an elephant tusk it probably won't matter.

ONLINE BUYING CHECKLIST:

-Will it fit under the GST/duty threshold?

-Would it be cheaper to split into separate orders?

-Is it small and light enough to ship economically?

-Is it on the freight company's banned list?

- BusinessDay.co.nz

Comments

Special offers

Featured Promotions

Sponsored Content