Ruslan Kogan made a huge splash earlier this year when he got into a war of words with Gerry Harvey over pricing of consumer electronics. At the time, we decided not to cover the slanging match - it was perfect fodder for Today Tonight, but not so much Giz. But last week Gerry Harvey came out petitioning the government to start charging GST on all products purchased online from overseas. Hey Gerry, why don't you move with the times, get online and STFU?
Image: Wikimedia Commons
It's such a sad state of affairs when a millionaire like Gerry Harvey, who built his empire from the ground up decades ago, has to try and petition politicians to change the laws so he can continue to sit on his pot of gold in a changing world. For an apparently intelligent businessman, the fact that he has ignored the potential and demand for online shopping for so long lends itself to Kogan's claims that Harvey is quickly become outdated in today's world.
You don't have to look very hard to see how little Harvey has paid attention to the changing retail landscape and the boom of online shopping. Simply visit Harvey Norman's website and try and buy something online... You can't do it, can you? At best, you can add a product to a wishlist and have it ordered at your local bricks and mortar retail store.
The problem with these retailers demanding that customers fork out GST on online purchases is that they're trying to punish consumers for trying to get the best deal. There's no question the the overheads of running a store like Harvey Norman must be huge - things like rent, electricity, water, cleaning, and floor staff - all need to be taken into account when selling goods. Then there's the cost of advertising, which is an even bigger expense.
But the demand to enforce GST on online purchases is ridiculous for another matter altogether - how the hell would it be enforced? Unless all international online retailers are forced to charge GST - which isn't possible - there's simply no way of ensuring that online purchases are charged GST. To try would cost taxpayers ridiculous amounts of money as well, all so poor millionaires like Gerry Harvey don't have to suffer dwindling profit margins.
Ruslan Kogan describes the situation well:
People are getting smarter and smarter every day. They're one Google serach away from finding out how much any product costs anywhere in the world.
Now an efficient business model should be able to operate locally and deliver a product for better value to consumers in Australia than any international business. For instance, the cost of international freight is massive, so by bringing in container loads of products to Australia and distributing it locally, you could do it more efficiently by selling it online.
But in a world full of eBays and Kogans, of online-only sellers who don't have huge overheads, trying to gain an unfair advantage over the up and comers by getting government to change the laws is absolute douche-baggery at its worst. So Gerry... Maybe instead of complaining, why don't you step back and innovate - bring your business into the 21st century instead of trying to get laws changed to keep your 20th century business model successful.