2015may shop at source to save hero
15 May 2015

Opinion: Shop at the source to save

Some online research can help you identify big mark-ups.

I buy lots of baby and children’s clothes online because I can shop at a time that suits me, without a toddler tagging along and can take advantage of sales and discount codes when they pop up on Facebook or in promotional emails.

I have some favourite online stores I regularly shop from, both in New Zealand and overseas. One of these is Marks & Spencer in the UK. When my daughter was a baby, I bought lots of sleepsuits from M&S – they’re made of nice soft cotton, come in lovely prints, wash well and are excellent quality for the price. You can buy 3-packs for £13-16 (depending on the size and print), so at the current exchange rate (roughly GB£1 to NZ$2) it works out at about $10 a suit. I haven’t found anything of comparable quality for that price in New Zealand stores (in-store or online), even on sale.

Shipping is free when you spend more than £30, so I’d get a couple of sleepsuit 3-packs and top up the order with a 3-pack of cotton bibs for £6.

Last week, I received a promotional email from New Zealand-based online store The Baby’s Room advertising that it was selling the very same M&S sleepsuits and bibs at much higher prices: $49.95 for a single sleepsuit and $19.95 for one bib! The email was advertising a special offer: If you spent more than $70 on M&S you’d receive a gift set of assorted items valued at $110. It wouldn’t be hard to spend more than $70 at those prices, but why would you when for $60 you could buy six sleepsuits direct from the M&S website? Buying six sleepsuits from The Baby’s Room would cost close to $300!

Even if you assume the store is bringing these items into New Zealand in volumes requiring it to pay GST, duty and customs charges, the mark-up seems generous. Can it really do this?

Yes, it can. I asked our consumer adviser Maggie Edwards whether New Zealand retailers can on-sell items from international stores, like M&S, at whatever price it chooses and yes, as long as it’s clear the retailer isn’t acting as the international store in New Zealand (The Baby’s Room has a statement to that effect on its website) they are within the law. It’s simply parallel importing – where genuine products are imported without the permission of the intellectual property owner – and it’s been legal in New Zealand since 1998.

I asked The Baby’s Room owner how prices are set for the items it buys from M&S. What I hadn’t realised was just how much the GST, customs and import duty add to the cost when bringing these items into New Zealand as an importer. When buying a few items directly, you’re exempt from these charges as long as the GST and import duty comes to less than $60. However, if it comes to more you’re liable for extra customs charges too. All these costs are factored into The Baby’s Room’s retail prices.

The owner pointed out the benefits of buying M&S from The Baby’s Room: you can buy a single item rather than a 3-pack that might include colours or styles you don’t like, it’ll arrive faster because it’s already in New Zealand (delivery from M&S can take up to 14 days) and you may be able to pick up a special offer.

I’ll happily pay a little more to support New Zealand retailers and have the protection of the Consumer Guarantees Act, but I’m not prepared to fork out five times the price.

About the author:

Libby Manley has worked for Consumer since 2008 and is responsible for our cooking appliances and laundry whiteware content. She also writes about children’s products like strollers and high chairs, and organises our annual wine tasting and in-house food tastings.

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