Overseas e-tailers no threat despite high dollar

Peripherals vendor Kensington said local sales had grown this year and that the rising Australian dollar had not encouraged significant numbers of shoppers to buy from international online retailers.

"Sales have grown really well this year. There is a lot of talk about people buying online but people still like to touch and feel a product before purchasing," said Sam Goldstein, Kensington's Australian manager of marketing and business development.

With the Australian dollar hovering around parity with the US, the difference in price for products available in both countries has become a strong incentive to buy overseas.

For example, Kensington's ClickSafe laptop lock sells for $109.95 in Australia. The same lock retails for less than half the price in the US at $US49.99.

Goldstein said vendors had to take "a number of factors" into account when setting the local price.

"Most notably it is the sales volume, obviously, but other factors (include) differing freight taxes and duty, different margin expectation, differing tax structures (such as prices displaying without tax) as well as the fact that we don't actually trade at today's exchange rate."

Comparable products sold by other vendors had comparable differences in price, he added.

While the online range sold in both countries is identical, Kensington sells a wider range of its products in bricks-and-mortar stores in Australia. The higher retail price reflected this, Goldstein said. "You've got to build in the margin to service those customers."

The structure of the US retail market also forced down the retail price. The collapse of major retailer Circuit City last year left a single tier-one retailer with little competition, Goldstein said.

"If you're not in Best Buy you're not in (US) retail," Goldstein said.

By comparison Australia has a number of large players in the tech retail market.

Goldstein denied vendors set high prices to target businesses that refused to buy overseas because of warranty issues.

Changes in currency values could also impact heavily on margins and could cut both ways, Goldstein said.

"We buy in US dollars and sell in Australian. When the bottom falls out of the currency we are wearing it like we did when it fell 30 percent in a week 12 months ago. We didn't change our prices."

The vendor set prices every 12 months; three months ago it lowered prices on the security range for the following year.

If the Australian dollar remained stable in the long term the gap between Australian and US prices would narrow across all markets and products, Goldstein said.