Compare a US price to an Australian one and the gap is usually large enough to feel like an insult. The response is predictable — someone converts the currency, adds ten per cent, finds the result still short of the local price, and concludes the difference is pure gouging.
Some of it is. Most of it is not, and the parts that are not are worth understanding, because they tell you which products are worth importing yourself and which are not.
Here is the premium taken apart, in order.
The Exchange Rate You Are Comparing Against Is the Wrong One
The first mistake is converting at today’s spot rate. No vendor prices that way.
A company setting an Australian recommended price is committing to hold it for months across a product cycle, while its costs sit in another currency. To do that without absorbing whatever the currency does in the meantime, it hedges — locking in a rate in advance — and sets the local price against that hedged rate plus a buffer for the movement it did not cover.
The practical consequence is a lag. When the Australian dollar strengthens, local prices do not fall the next week, because the stock on the shelf was bought at the old rate. When it weakens, prices do not immediately rise either. What you are comparing against is not today’s rate but a decision made some months ago, with a margin for error attached.
This is also why the premium looks worse in a strong-dollar period and nearly disappears in a weak one, without anyone changing their pricing policy at all.
Freight, and Why It Is Not Just Distance
Australia is a long way from where most electronics are made, but the cost is less about distance than about volume and the last leg.
Sea freight per unit is genuinely cheap at container scale. What is expensive is a market small enough that shipments are less frequent and less full, held longer as inventory, and then distributed across a country with a handful of population centres separated by very long domestic legs. Insurance and handling scale with value rather than weight, which hits high-value electronics hardest.
GST Applies to More Than the Price of the Goods
This is the part most people get wrong, and it is worth being precise about.
GST on imported goods is calculated on the value of the taxable importation — broadly the customs value, plus the cost of transport and insurance to get the goods here, plus any duty payable. It is not ten per cent of the ex-works price. It is ten per cent of the landed value, and freight is inside the base.
That has a compounding effect. Every dollar of freight adds a dollar to the base on which GST is charged, so the tax multiplies part of the logistics cost rather than sitting beside it.
For goods bought online from overseas there is a separate regime for low-value imported goods, and the site’s existing piece on Australian tariffs and import thresholds covers the duty side in more detail. If you are working out what a consignment actually costs to land, our free GST calculator handles the arithmetic.
Consumer Law Is Priced Into the Local Product
Australian Consumer Law attaches statutory guarantees to goods sold here — guarantees that operate independently of, and in addition to, whatever warranty the manufacturer offers. A product must be of acceptable quality and fit for purpose, and where it is not, the consumer has remedies the seller cannot contract out of.
The relevant point for pricing is that the guarantee has no fixed expiry. It runs for a period reasonable for that kind of product at that price, which for an expensive device is often considerably longer than the manufacturer’s stated warranty.
Somebody carries that risk, and it is priced. A local distributor supporting Australian stock is funding a returns and repair liability that the same product sold in a market with weaker consumer protection does not carry. That is a real cost sitting inside the local price, and it is the single largest thing a grey importer is quietly declining to pay for.
A Small Market Has More Layers
A market of Australia’s size rarely justifies a direct-to-retail operation, so most products arrive through a distributor, then a retailer. Each takes a margin, and each margin is calculated on a smaller volume than its equivalent in a large market.
Fixed costs behave badly at this scale. Local certification, compliance testing, translated documentation, a support function, warranty logistics and marketing all cost roughly the same whether they are amortised across ten thousand units or ten million. Divided by a small number, the per-unit figure is much larger.
None of that is generosity or malice. It is arithmetic that only works out one way.
What a Grey Import Actually Costs You
Buying from overseas yourself removes the distributor margin, the local retailer margin and the consumer-law risk loading. That is the saving, and it is real.
What you give up is the part that was funding the risk. A product bought from an overseas seller may have no local warranty support, and pursuing a remedy against a seller with no Australian presence is considerably harder than pursuing one down the road. Add the possibility of a different power standard, a region lock, or firmware that behaves differently, and the calculation depends on how expensive a failure would be.
For a cheap accessory the maths usually favours importing. For an expensive device you intend to keep for years, you are declining to buy an insurance policy whose premium was inside the local price.
How to Tell Margin From Structure
A rough test, and it is only rough. Take the overseas price. Add a realistic freight and insurance figure for the item’s size and value. Add GST at ten per cent of that combined landed figure rather than of the goods alone. Add a currency buffer, on the basis that the vendor hedged at a rate that is not today’s.
If the local price is close to that number, most of the premium is structural and you are unlikely to beat it by much. If it is far above it, the gap is distribution and margin, and importing may be worth the trade-off.
What you should not do is run the calculation at the spot rate on the goods price alone, get a small number, and conclude everyone is stealing from you. That is the comparison that makes the Australian premium look inexplicable, and it is inexplicable mainly because it leaves out most of the cost.
On the numbers: commercial rates and statutory figures here are the published position as at September 2026. They change, sometimes more than once a year. Check the primary source named before relying on any of them for a decision.
Frequently Asked Questions
Is GST charged on the freight cost of imported goods?
Yes. GST on a taxable importation is calculated on the customs value plus transport and insurance to bring the goods here, plus any duty. Freight sits inside the base, so it is effectively taxed.
Why do Australian prices not drop when the dollar strengthens?
Because vendors hedge currency in advance and set prices for a product cycle. Stock on the shelf was bought at an earlier rate, so local prices lag currency movements in both directions.
Do I lose warranty rights buying from overseas?
You lose the practical benefit of local support. Australian Consumer Law guarantees attach to goods supplied in Australia, and enforcing a remedy against an overseas seller with no local presence is considerably harder.
How much of the premium is actually profit?
It varies by product. Freight, GST on the landed value, consumer-law risk and small-market distribution costs account for a substantial part. The way to test it is to build the landed cost up rather than converting the sticker price down.