What is the Goods and Services Tax (GST)?

Explore the advantages and helpful considerations for sellers.
29th Mar, 2023
4 MIN
If you're selling goods or services online in Australia, chances are you've come across this little acronym. But what exactly is it? In a nutshell, GST stands for Goods and Services Tax, and it's a 10% tax on most things you buy and sell.

Don't worry, it's not as scary as it sounds! This blog will break down what you need to know about GST as an online seller – what it is, how it works and how it affects your business. Let's dive in.

How Does GST Work in Australia?

Running a business means dealing with GST. It's a 10% tax on most goods and services sold in Australia.

Think of it like this: when you sell something, you add 10% to the price. This extra bit is what you need to pay to the government as GST. You'll be collecting this 10% from your customers.

Now, you might also be buying things for your business, right? The good news is that you may be able to claim back the GST you paid on those purchases. This is called a GST credit, and it can reduce the amount of GST you owe.

To stay on top of GST, you need to register for an Australian Business Number (ABN) and file regular Business Activity Statements (BAS). This helps you keep track of the GST you collect and the GST you can claim back.

What is GST Used For?

The GST you collect goes to the government, which uses it to fund important services for all Australians. We're talking hospitals, schools, roads – things that keep our country running smoothly.

Do I Need to Register for GST?

You may need to register for GST if your business has a turnover of $75,000 or more in a financial year. It is important to check the requirements with a professional advisor to get advice tailored to your business.

If your business is new, you might be wondering if you'll hit that $75,000 mark. Don't worry too much, it's better to be prepared.

When Should I Register for GST?

You can register for GST as soon as you start your business, or you can wait until you're closer to the $75,000 turnover mark. If you're unsure, it's always best to chat with a business advisor or accountant. They can give you personalised advice for your situation.

4. Access innovative selling tools

As an Amazon seller you can choose to take advantage of a variety of unique selling tools and resources. You can choose to fulfil orders yourself, or to use the Fulfilment by Amazon (FBA) service to have Amazon store, pack and ship orders for you. Perhaps you prefer to use a mix of fulfilment options to suit your business.

You could choose to register with Brand Registry to protect your private brand, then build a customised online storefront with enhanced brand and product content. And you could choose to deploy advertising campaigns and promotions to help increase conversions. There are many tools and resources for growing your online business.

See ways to grow >

5. Sell worldwide

With fulfilment centres and stores around the globe, Amazon offers a unique opportunity and network to sell worldwide. Perhaps you’d like to expand your reach to North America, Asia or Europe and find new customers. Amazon’s established fulfilment network makes it possible to deliver reliably to your customers, wherever they happen to be located.

Sell worldwide with Amazon >

6. Find seller support a click away

Have questions about which products to sell, or how to get started? You’re never far away from helpful seller support with Amazon Australia. Seller University provides a great place to begin. Meanwhile if you’re after something more specific, you can explore other resources including Seller Help topics and Seller Forums.

Read the beginner’s guide for sellers >

Things to consider before selling on Amazon

So is it the right choice for you? If you’re asking yourself ‘should I sell on Amazon?’, it can help to consider a few practical elements.

7. Seller fees

Amazon Australia can offer an affordable way to try out products without necessarily needing to build a physical store, or build a huge storage warehouse. There are some costs to selling on Amazon, so it’s good to familiarise yourself with these when setting out.
When working out if it is profitable to sell on Amazon, factor in these selling fees, FBA fees and other costs that could help you maximise your sales.

See selling fees for Amazon >

8. Selling in a competitive world

The fact that there are so many shoppers looking on Amazon can mean that there’s competition for the products you’re offering. When asking ‘is Amazon worth selling on?’, think about how you can differentiate your products – be it through price, superior quality or distinctive product characteristics.

9. Product requirements

A breathtaking range of products can be sold on Amazon Australia, but there are also a few product and category restrictions to be mindful of. Brush up on Amazon’s product categories, and you’ll be better equipped to source or create products that are safe and permitted to be listed.

10. Keeping optimal inventory

Part of providing great customer service on Amazon is ensuring you have enough stock to keep shoppers happy! Consider times where your products might be in greater demand, and ensure you can source or produce an adequate supply of products. A well-managed inventory can help you deliver satisfaction to more shoppers, and ultimately grow your sales.

Pros and cons: making your choice

At the end of the day, Amazon Australia offers a number of unique benefits and tools that can help you sell your products and scale your business. You could sell your products exclusively on Amazon or in a variety of places. You could start by selling just a few items, or launch straight into a future as a full-time online entrepreneur. However you plan to sell, we’re here to help!
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