Imported sand can build castles, but the taxman’s bucket is small

  • Protectionist taxation is doomed in a globally porous marketplace
  • Competitiveness is about value, not price
  • The multi ticket clipping distribution function is ripe for rationalisation

New Zealand may be an island geographically, but the digital economy drives an interesting disruption of traditional mass consumption. Choice a compelling proposition for global shoppers who can now easily price match across sovereign borders, making a mockery of protectionist distribution (and perhaps in the future, taxation) models.

GST chargeable thresholds on personal imports perhaps merely a smokescreen for a wider consumer revolution. Everything racing to the bottom price-wise, except gravity defying residential housing, along with recession proof energy and food costs. Food, shelter and warmth a tight trio of essentials being pushed higher up the unequally distributed financial precipice.

Is it any wonder that basics, if not necessities, are so price sensitively purchased. Mass distributor/ retailers on the one hand have inflicted a historical blunt force marketing assault of 50% – 60%, even 70% discounts regularly as clockwork, and on the other hand cried foul over a 15% differential on imported goods. Am I alone in thinking there is a disconnect here?

My experience has been that price sensitivity across myriad consumer markets is a request for justification, proof, and supporting evidence. Otherwise, why would you buy a more expensive car, as many thousands do? Price is but a poor man to the wisdom of value, of taking a longer view, looking at whole of life costs.

Having recently attended an enlightening discussion about the bicultural nature of NZ society, one key agreement was of the future being in ‘value add’, or going beyond the primary raw materials, and developing it into something a bit special. Niche desirability combined with long term pleasure of ownership.

Almost comically I have some sympathy with governments, who must tiptoe through the minefield of business lobbying pressure, weighed up with the capitalist belief of translucently ‘free markets’.

The sea bordering the sandy shore serves up the most simplistic of analogies. What if ‘your’ customers never came back – be they end consumers or resellers. Interplanetary magnetism keeps the tides moving predictably, but democratisation of markets via the world wide (shop) window means business certainty has been replaced by uncertainty and change. Investing in (and delivering) a de-commoditised product could be a smart move…

©David Binstead 2013.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s