Jacki Bresic, of importer the International Fashion Group, reached an agreement with US denim brands Paige Denim and AG Adriano Goldschmied while Some Agency, which imports Dr Denim, has negotiated with the brand to prevent UK online store Asos selling the brand to Australian shoppers.
Clark says he is aware of these sort of agreements between importers and brands.
“The brands that we sell treat that as a number one issue at the moment and they are trying to stop international retailers shipping into Australia,” says Clark.
“They are not trying to rip people off, just run a business. How else can they survive?
“In order for companies to make money in Australia the only thing they have figured out how to do is limit the borders.
“They have had to have the brands arrange with retailers that are online that you can’t ship into other countries, so that every country has the ability to operate a fair business.
“It is not just because they are cheaper; Dr Denim in Australia has a licence to distribute throughout Australia, if another country ships it in then they are on Dr Denim’s territory.”
However, IBISWorld senior industry analyst Naren Sivasailam told SmartCompany these agreements “scream a little bit of desperation”.
Sivasailam says Australian websites need to match prices in order to compete with international websites.
“Domestic websites are more expensive, so that is why much of the growth in the online market is coming from overseas, particularly with the high Australian dollar.”
IBISWorld predicts a consolidation of players in the online sector.
“Concentration is set to strengthen over the five years through 2016-17,” said the research house.
“This will occur as operators become better equipped in their supply of goods and consumers overcome fears associated with purchasing something sight and touch unseen and credit card safety.
“To this end, the industry is poised to experience further mergers and acquisitions as a growing number of businesses recognise the growth potential of online enterprises.”
Crocs is another international retailer with its own Australian website which sell Crocs’ brightly coloured plastic clogs, with “classic” Crocs listed on the site at AUD $49.95 plus $10 shipping.
This compares to the US Crocs website, which does not ship to Australia, where the same classic Crocs are listed at $US34.99 and Australian online retailers Shoes2u.com.au, which stocks classic Crocs $AUS29.95 with free overnight delivery for those who sign up.
Robin Berry, general manager of Crocs Australia and New Zealand, told SmartCompany that Crocs has company-operated production facilities in Mexico and Italy and also contracts with third-party manufacturers in China, Vietnam, Eastern Europe and South America.
“The retail prices of our products vary slightly across countries due to multiple reasons including, but not limited to, shipping cost from where the products are manufactured, tax, economies of scale and other logistics costs,” says Berry.
When asked why Shoes2U.com.au was able to supply Crocs at a cheaper price, Berry is unable to provide an explanation.
“We provide retail price recommendation to all of our wholesale partners,” says Berry.
“However, it is up to individual retailers to set their pricing based on their own business consideration.”
Jason Mountney, partner at Shoes2u told SmartCompany, he was unable to explain the price discrepancy.
“You are better off asking Crocs why their Crocs are more expensive,” says Mountney.
“We don’t have a high street shop; we just have a walk-in shop in an industrial area and our website.
“We maybe have tighter margins; we have trimmed a lot of fat and we are careful about what we buy and stock.”
Mountney says Shoes2u buys its stock from Crocs itself, so he does not know why the prices are higher at the Crocs online store.
“We do think Australians are paying too much for a lot of things, in shop and online,” he says.
“I understand Australian wages and conditions can be high but when it is an online thing it is harder to justify.”
Mountney says Shoes2u had a dispute with one of its shoe suppliers who tried to mandate that Shoes2u charge a higher price.
“We ended up reporting it to the ACCC because they intervened and they refused to supply us because we were too cheap.
“The ACCC were helpful but it means that we now have a toxic relationship with that shoe company, so now we don’t stock them anymore.”
Perhaps one of the most obvious online price differentials is between Australian and international music websites.
Australian artist Gotye is a big hit in both Australia and the United States, but his album costs a lot more online in Australia, with Gotye’s Making Mirrors retailing on iTunes in Australia for $16.99, and in the United States for $US9.99.
Earlier this year, Triple J’s Hack program reported that Australians were avoiding the price differences by opening American iTunes accounts.
Then, last month, Communications Minister Stephen Conroy announced a parliamentary inquiry into why Australians pay significantly more for software and music downloads, where transport costs cannot be the reason.
Apple and Microsoft will be among technology companies asked to explain to Parliament why Australians pay much more for music and game downloads from iTunes, for example, than overseas customers.
Web developer Daniel Myles, who has been tracking price differences, told SmartCompany he referred to the price differential as ”the Australia tax, the tax we pay just by being in Australia”.
“Apple still have not come to the party yet with their pricing,” says Myles.
“They have been at higher prices for a long time and our dollar has been on parity for ages.”
Myles says consumers are turning to cloud-based music systems like Spotify, which was launched in Australia last week as an alternative to iTunes.
“Spotify is $11.95 for premium access a month, exactly the same as the US. You don’t see that often in Australia, parity.
“It is a bit hard to justify bricks and mortar costs when it is not a physical product, just a download.”
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
