Amazon started as online book store and has grown to be the worlds largest online retailer.
eBay sticks two fingers up to Amazon and invites Australia to buy globally
eBay UK are offering Australian buyers 10% off purchases for a limited time. They’re not pulling any punches either directly citing Amazon as blocking customers in Australia from freely buying from their overseas country sites.
eBay are making a big deal of selling to Australia, and rightly so, that they were founded on the principle of enabling trade and allowing buyers from anywhere to shop from sellers regardless of where they are located and they’re not going to stop a bit of tax legislation from getting in the way of commerce. Amazon in contrast don’t like being dictated to and when Australian legislators said that they’d have to collect GST sales tax decided to simply black customers from shopping with sellers outside of the Australian domestic market.
“As a result of changes to Australian GST law on 1 July, international shopping options for Australian customers will change. While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites. Based on our assessment, we will redirect Australian customers from our international sites to amazon.com.au where they can shop for products sold by Amazon US on the new Global Store, available today. This will allow us to provide our customers with continued access to international selection and remain compliant with the law which requires us to collect and remit GST on products sold on Amazon sites that are shipped from overseas.”
– Amazon spokesperson (to Techcrunch)
Amazon trade off low taxation
It’s worth contrasting the different ideologies of the two companies. For a long time Amazon fought against collecting Sales Tax in US States in order to keep online prices low. They collect sales tax in just about every US State now, mainly because they’ve built so many warehouses that they have to due to having a physical presence.
Amazon are also currently looking for a location for their second Headquarters and it’s instructive to read their pitch document
“Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount. Please describe any specific or unique eligibility requirements mandated by each incentive item. With respect to tax credits, please indicate whether credits are refundable, transferable, or may be carried forward for a specific period of time. If the incentive includes free or reduced land costs, include the mechanism and approvals that will be required. Please also include all timelines associated with the approvals of each incentive. We acknowledge a Project of this magnitude may require special incentive legislation in order for the state/province to achieve a competitive incentive proposal. As such, please indicate if any incentives or programs will require legislation or other approval methods. Ideally, your submittal includes a total value of incentives, including the specified benefit time period.”
– Amazon HQ2 RFP
Amazon aren’t interested in where the best location geographically and logistically is. Their main interest is where they can get the best tax breaks, who will give them free land and which US State, or City will legislate to make Amazon’s life easier.
When Australia dictated to Amazon and said “You will collect and remit taxes”, Amazon didn’t like this and effective stuck two fingers up and said no. It’s almost cutting off your nose to spite your face in the hope that Australia will fold and reverse their tax ruling.
What makes eBay different?
eBay don’t ever appear to have taken regulation or taxation as a barrier to trade. With initiatives like their Global Shipping Program, eBay simply work around the legislation and at the same time attempt to make barriers minimal for shoppers and sellers alike.
The eBay view is very much of a world where there are no barriers to commerce. For sure, when Pierre Omidyar founded eBay he probably had no idea quite how large the marketplace would become and hearsay says it was a total surprise when the first car was listed on eBay as they didn’t think anyone would buy a car online (but look how big eBay Motors is today!). However, Pierre’s vision was an open market that makes it easier to conduct business with strangers over the Internet and that vision had no limits from geographies, politics, trade barriers or taxation.
Today that view is shared by eBay and it’s evident that Rob Hatrell, Vice President eBay UK, pulls no punches. Whilst the email below announcing the 10% discount for Australians shopping on eBay UK wasn’t signed by Rob, he will have most certainly not only seen it but encouraged the language it’s couched in.
Unlike Amazon, eBay aren’t about to be restricted by legislation and taxation. Like Amazon they probably don’t like or approve of the Australian changes but they’re working for buyers and sellers, instead of refusing to play in Australia’s back yard because they don’t like the home rules.
“You might have seen the recent news that Amazon has taken the decision to block customers in Australia from shopping with sellers outside of the domestic Australian market. This decision means that, even if you sell with that marketplaces, customers in Australia won’t have any access to your products.
At eBay, we believe in trade without borders. To celebrate that, we’re going to offer Australian shoppers 10% off purchases on eBay.co.uk, when they spend AUS $50 or more from 2 July until 8 July, to drive even more customers to you. You don’t need to do anything to be a part of this promotion. Of course, you can benefit more from the promotion by adding export inventory to Australia.
And don’t forget, you can use our Global Shipping Program to ship to Australia for no more than the cost of domestic postage. We’ll continue to keep trade open and give you a shop window to the world.”
– eBay email to sellers
eBay UK 10% off promotion details for Australian Shoppers
If you’re an Australian buyer wanting to shop on eBay UK, there are a few terms around the 10% off offer. Maximum discount is Aus$100. GST may apply. The offer runs from the 2nd of July until the 8th of July 2018. Full Ts and Cs on the eBay website.
Australia only has a population of 24 million people which is very small. Which makes any revenue generated from Australia as being very small in comparison to other nations.
Good going eBay. Australia is one of our biggest exports. 90% of that comes through eBay.
I despise the way amazon operates. I would much rather use eBay than Amazon given the opportunity. The more business that eBay can steal from Amazon the better!
Well done, Rob.