A parallel import occurs when someone imports goods from overseas and sells them in Australia without permission from the manufacturer. This then puts them in competition with local distributors. This article explains the benefits and risks of purchasing parallel imports.
Why Buy Parallel Imports?
Parallel importing creates competition in the Australian market, therefore lowering product prices. Additionally, given the accessibility that has come with the rise of online shopping, consumers have a larger range of products to choose from. It may seem unfair to consumers if a distributor has a monopoly over a product in Australia when it is much cheaper overseas.
The parallel importer will often sell the product far more cheaply than an Australian seller. The price disparity might be due to:
- overseas manufacturers creating the product at a lower cost;
- exchange rates; or
- the ability to rely on the Australian distributor’s marketing efforts.
What Are My Consumer Rights?
When you buy a parallel import, your rights as a consumer remain the same as if you were buying any other product.
The Australian Consumer Law (ACL) seeks to protect consumers by ensuring that consumers are provided with certain guarantees by the seller. For example, the seller must ensure that the goods are of acceptable quality. If not, the seller must arrange for a repair, replacement or refund of the goods.
What Are the Risks of Buying Parallel Imports?
There are three main risks associated with buying a product from a parallel importer.
1. Lack of Customer Support
Many consumers who purchase parallel imports believe that they are still entitled to the warranties and customer support services promised by the product.
However, these warranties may not apply in Australia. If there is a local manufacturer of the same product, they will not be responsible for fixing your product or offering you any product support.
2. Difficulty Enforcing Rights
Despite the availability of the ACL consumer guarantees, an Australian consumer will probably have difficulty enforcing these rights against a seller located overseas. This is because the seller may be outside the Australian courts’ jurisdiction.
3. Lower Product Quality
A consumer may believe that the parallel import they are purchasing is exactly the same as the local distributor’s product. However, it is likely the parallel import was made overseas, so it may not have been subjected to Australian inspections and manufacturing standards. As a result, it may be of lower quality than those sold by the local distributor.
Additionally, if products were manufactured in a foreign country for foreign use, they may not work in Australia for various reasons. These include:
- voltage restrictions;
- geo-blocking; or
- the inclusion of instruction manuals in a foreign language.
If a parallel import is of low quality and without an enforceable warranty, then the benefits of purchasing the good at lower price than the Australian distributor may be minimal.
How Can Consumers Protect Themselves?
You can take several steps to protect yourself before making a purchase from a parallel importer:
- If you are unsure whether you are a buying a parallel import, ask the seller or manufacturer.
- If you are purchasing a parallel import, ask the seller if the product will work in Australia. Read the terms and conditions of your sale carefully and check whether any warranties will work in Australia.
- If there is an authorised local distributor offering the same product, figure out whether the price difference is worth the risk. It might be better to buy the product from the local distributor if the parallel import does not include warranties.
Parallel importing can have a positive influence on the Australian market for consumers by lowering prices and increasing product availability. However, consumers should weigh the benefits and disadvantages of purchasing parallel imports, especially when there is an authorised local equivalent.
If you wish to buy a parallel import, read the fine print. Do your research, particularly when you are investing in an expensive purchase that might not carry with it enforceable warranties. If you have any questions about parallel imports, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
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