Thinking of reselling parts in Australia from USA

[DarkSoul1]

Guys, I need a bit of advice in several areas.   I'm thinking of buying parts in from the USA and selling them here in Australia.  The main reason being that currently, parts (joysticks, encoders, overlays etc) are ridiculously expensive.  We have local retailers who charge like wounded bulls.  I'll be able to make a minimal profit to cover the cost of my own builds and supply other builders who also find current costs prohibitive.

Areas I need help on:

1.  What companies do you know of that deal with credit cards?  I ask as this is the most convenient for me.  I've checked the links, are there any others?

2.  Will I have any problems on-selling parts from said companies, re legal considerations?

[danny_galaga]

freights gonna be the killer...

[GGKoul]

If you contact the various retailers regarding what your looking to do.  You may get a price break.  Also, I think you can get cheaper parts from China instead of ordering them from the US.

Then again, you'll need to cover the cost of shipping the items in the selling price of the item.  I think you'll make good money of you bought bulk items from the US and then eBaying them. 

[Harry Potter]

I don't know about the wounded bulls but yeah, places like Ozstick are a bit of a high.

The mom and pop type of stores however still have reasonable prices. You have to look for them though.

[microwrx]

Your problem will be import duty & GST.

If I buy stuff from the US or UK and it comes in via mail it can cost up to A$1000 and customs will not bother with additional GST or import duty.  Once you go over that $ figure they will charge you 10% GST plus whatever % the import duty on that type of item incurs.  If the goods are delivered by a shipping company (such as DHL from Ultimarc for example) the $ figure is $250 before you get hit with import duty & GST and the shipping company will charge you on behalf of customs.

What this means is you either pay the additional duty and tax and save on shipping by getting more stock or you pay more on shipping by having less stuff sent at a time.

This is one of the reasons places here in Australia seem to charge higher prices.  The only way to offset to additional duty and tax is if you can get yourself a bulk discont from the interantional supplier as this is the only way you are going to be able to do it without it being MUCH more than someone could import their parts for themselves (if you are going to make any money at all).

Go to http://www.customs.gov.au/site/page.cfm?u=4376 for more info on how the charges are calculated to see if it is going to be worth your while.

You also need to keep in mind that as the value of the $ fluctuates it will affect your hip pocket especially when buying in bulk.  I believe one of the reasons OZ Stick had their prices where they were was because he bought a fair bit of stock when our dollar was low and therefore had to charge accordingly.  When our dollar went up he couldn't bring the prices down but we could buy ourselves and get parts for CONSIDERABLY less.

[fredster]

Buy American!

[Bones]

You need a contact overseas that will ship over monitors packed to the brim with Ipacs to avoid massive customs and GST charges. Send these monitors to an empty home that is for sale, collect them and and then run, run run....!

Seriously, Ozstick are expensive. I know, yesterday I received my first order worth excess of $1000. (I did receive excellent service which I think needs to be said, I also ordered a reasonable quantity of stuff.)

I just don't think Australia has the market to take advantage of bulk buy prices which will offset freight and duty charges. Sure you could order 100 Ipac4's and probably get a fair discount going direct, but who you going to sell them too and how long will they take to sell? Then you have cash tied up on a shelf costing you money instead of earning interest or coming off your home loan. To recover this expense you have to charge more and then the whole exercise is defeated. More than likely you will actually end up loosing cash rather than breaking even or making a small profit.

I wish we had more options here, but sadly we don't have the population of hobbyist yet to make it worthwhile. Then again, maybe we don't have the population due to the availability and cost of the required parts?

Perhaps consignment stock may be the way around these problems but you must consider you then have to convince a manufacturer or distributor to send these items to you on a consignment basis when there is already an established distributor in Australia, and a relationship has been formed.

[microwrx]

Buy American!

It doesn't matter where the item comes from it'll still incur the same duty and GST once it gets here so I'd prefer to buy what I regard as a better product (or best value for money) than from a specific region.  That being said in many instances that is American.

[danny_galaga]

Buy American!

hehe. fredster, ya gotta take your hand off your heart when ya post. it affects your judgement! the import duty is for.... IMPORTS! bringing in an american product into australia falls under that definition.

[GGKoul]

Can't you get the sender to mark the package as "Gift"? As this usually helps me avoid the taxes and duty charges when I get stuff shipped to Canada.

[danny_galaga]

Can't you get the sender to mark the package as "Gift"? As this usually helps me avoid the taxes and duty charges when I get stuff shipped to Canada.

it's hot and miss though as customs regularly do random checks of mail. i bought a model boat from the us once and i got hit with a huge customs duty. i'm guessing the bigger the package the more likely it's going to be randomly selected...

[danny_galaga]

Seriously, Ozstick are expensive. I know, yesterday I received my first order worth excess of $1000. (I did receive excellent service which I think needs to be said, I also ordered a reasonable quantity of stuff.)

you think so? i thought their prices were quite reasonable. i couldnt see that the total cost would have been cheaper had i ordered from overseas what with the freight. and that wasn't including whether or not it would incur customs duty...

[fredster]

Buy American Products and pay the duty to your government. Just make sure that they come from America.

[Bones]

Seriously, Ozstick are expensive. I know, yesterday I received my first order worth excess of $1000. (I did receive excellent service which I think needs to be said, I also ordered a reasonable quantity of stuff.)

you think so? i thought their prices were quite reasonable. i couldnt see that the total cost would have been cheaper had i ordered from overseas what with the freight. and that wasn't including whether or not it would incur customs duty...

I am pretty sure with where our Aussie dollar is at the moment, the scales would tip in favor of buying from O/S even including freight. But having said this, I just find it very important to support the local scene where I can. Had Ozstick service been of low quality I would have taken my order abroad without thinking twice.

Even though I probably paid another 10-20% compared to sourcing from OS, I do feel good about my purchase and will go back and recommend them to others.

[danny_galaga]

Buy American Products and pay the duty to your government. Just make sure that they come from America.

ahhh, but if i buy japanese instead it will be a better quality item 

[jbox]

Not to sound down on this idea or anything, because, hey, the more places selling in Australia the better! But...

1. You aren't making the product.
2. You aren't adding anything to the product.
3. Someone else sells it from the source.
4. Someone else sells it locally.
5. You will be paying shipping 1.5 times.

Now sure, sales service and all that is nice, but the reality is you are working form the assumption that none of them will be dodgy because otherwise your slim cut gained through a bulk order will disappear quickly in shipping costs.

Essentially, what you are really going to make money on is hedging. That's fine if you are happy to get into it, but the reality is that you would probably be better off just buying a whole bunch of US dollars whenever the exchange rate is good and then using them to buy stuff at the times when the exchange rate goes the other way.

[DarkSoul1]

Well, my two initial queries were not really answered but a lot of ideas and things to consider have been raised.

Cheers

[fredster]

Buy from Happs and Betson imperial.

Look, as an American capitalist it's kinda second nature for me to ask and answer certain questions before jumping into a business venture:

How much is shipping? What are you wanting to sell? What's the profit margin target you need to achieve?  How much do you want to sell?  How are you gonna sell it? How much does it cost to sell the items? What's your target market? How will you advertise? What is your value added service that makes you able to do this? How much time to do you want to invest? What/who are my competitors?

This is called (for you socialists) a "business plan".

What you have so far is only the "business concept".  Until you can answer the above questions, you are only speculating.

But in whatever you decide - Buy American. 

[DarkSoul1]

LOL @ Fredster

Down with you, you capitialist, imperialist dog!
 

Yes, I know what things to consider.  I double majored in Accounting and Economics at Uni.

[fredster]

I did think of one idea for you to help you promote your business venture.  It's the value added part.

Lets say you buy 100 joysticks, 600 buttons, 100 player 1 & 2 buttons, etc.

Then you go and buy some 18gauge wire and some connectors for cheap in your country.

Then go and cut a control panel to Lucid's plans with 6 buttons per player and the start buttons, and the esc, enter, and tab buttons.

Then you get some MDF and cut the boards out and then also get some art from the arcade library and make some generic type button layouts for your pattern.  Print them on 8 1/2 x 11 avery label paper.

Sell it as a build it yourself Mame control panel kit. You get even throw in some shelf paper.  All you need in one stop pretty much except for the plexi and the overlay.  And of course, the keyboard encoder.

You can target the "I can't use power tools because the police took them away" group.

That way you can perform a valuable service (such as protecting the innocents from these mosters using circular saws and drills around small children) and you can make money at the same time. 

I don't know what the market size will be though.

[danny_galaga]

I did think of one idea for you to help you promote your business venture.

[fredster]

So, do it better than "ozstick". 

I don't see where it was in his business plan to make a million dollars.

Start small, look for opportunities, try harder than the next guy, work hard.. oh

I forgot, you are a socialist Danny. Oh. I'm sorry. It's a capitalist thing, you wouldn't understand 

[sasuke_kun12]

first things first
pay for postaging or not pay for postaging? tihs is one of the things that kills me!
also how much will you sell your encoders for? coz you'll probably make money from selling encoders since i've only seen 2 websites that sell them. ozstick and arcade gaming australia

[Bones]

The other option is to build/design your own encoder from locally available parts. Do this and you save the expense of freight and customs charges, you may even win a few orders from OS where the arcade population really thrives.

If there was an Australian made product comparable in quality and performance to the other major options, I would buy without a second thought and I suspect many others would also.

[danny_galaga]

So, do it better than "ozstick".

[DarkSoul1]

I don't have the skill/knowledge or the time to learn how to make encoders.

I had 2 extra KeyWiz Eco2's after obtaining an order from RandyT.

1 was a spare I threw on eBay out of interest and sold for $46 AU.  The second Eco2 is on there now (courtesy of a mate who decided he didn't want it any more)

Here's my quick costing on 5 Eco2 solderless units:
$US28 for post
Total $US138.75

At xchange rate of 76 cents:
= $182 Australian
= $36.40 for each unit (including share of postage)

So I made about $10 AU on the one I sold.

If I could get the unit cost down to around $30 AU I'd be happy to sell for about $40 - $45 AU.  (This is the solderless Eco2, not the deluxe).



I would assume that if I ordered more in larger batches, economies of scale would ensure more units were available to absorb the postage cost and average price would come down.

But I would have to ensure that me reselling them here in Australia was OK by RandyT and was not against their company policies, contracts here in Australia etc.  If RandyT is following this thread, his comments yes/no etc would be appreciated.

Then there is the GST, BAS etc to comply with taxation yada yada yada.

[jbox]

I don't have the skill/knowledge or the time to learn how to make encoders.

At xchange rate of 76 cents:

I would assume that if I ordered more in larger batches, economies of scale would ensure more units were available to absorb the postage cost and average price would come down.

1. If you are serious, you could try emailing them to find out if they will license the ROM to you per unit sold?

2. While it lasts.

3. And herin lies the problem with living in Australia but lusting from websites in the USA. Like living in Adelaide, I love that it is a lot quieter, but I hate there aren't card shops on every corner!

Good luck though.