I was in Eilat a few weeks ago, Israel’s most southern corner and at the top of the Red Sea.

Having a teeny little airport which I think only offers flights from Tel Aviv, or drive or get a bus from the rest of country via a 300km road from Jerusalem, it is quite remote, with only Beer Sheva and a few other places in between.

Being far away and with not much employment outside of tourism, Eilat is a bit like the Isle of Wight of Israel.

I thought of an interesting idea, Israel maybe a hi-tech development nation, but its very lacking in online retailing.   As an IT person, its not so easy to go online and buy something and have it in a couple of days like you would have in the UK or US, ok part of this is due to fact this is a small country, but it is a bit inconvenient to purchase a urgently needed specialised computer part, or even a DVD easily online in Israel.

In the UK, if you buy something from Amazon.co.uk, if bought from Amazon’s own stock and not one of their third party sellers, usually your stuff gets shipped from the Channel Islands (to my non-UK friends that’s Jersey or Guernsey, part of the UK but close to France) due to the fact that goods there are VAT free, Play.com, CDwow and even Tesco’s online retailing do this too.

I am not sure how Amazon’s US operations are, but think some of the states offer no sales tax.   One of my friends from Switzerland buys his DVDs from Amazon.de much cheaper than the Swiss high street.

Eilat is also a bit unique as the retail outlets, mostly clothing are all VAT-free to encourage tourism and provide jobs there.

Something else I have noticed, and not seen this mentioned anywhere online, is that the post Office in Israel is very cheap.  I think the British Royal Mail have put the prices up by a record 25%, I estimate sending mail (packages of less than 2 kilos) is about a third of the cost of it is domestically and overseas than it is of the UK.

I salvaged the parts of a broken laptop and it cost 28 Shekels (less than £5) to mail the LCD screen (box weighed about 1.3 Kilos) I sold on eBay a couple of weeks ago from Jerusalem to Italy.

Tourist shops selling shells from the Red Sea

Israel could do well and provide jobs to people in Eilat, by making it a central distribution hub to ship items locally and worldwide on the internet, and give people super value for money shopping.

Someone needs to put together a online shop template that works in Hebrew, English, Arabic and Russian and maybe more languages, so the business owner can set up and sell his stuff with minimal technical know-how and maintenance of the site apart from his stock.

Today’s online retailing in the western world means a lot of dropshipping is done, as the person selling the goods and providing customer service doesn’t have to be the same place as where the stuff is dispatched from.  I have bought a few things of small value from UK, Germany, US and China, needed for my job in Israel online, and only need to pay import duty on one item which was 100 Euros (£80)

Israel needs to continue to grow to support its expanding population (5-10 children is common) so by building economy at the bottom corner of the country makes a lot of sense, especially as David Ben Gurion was a firm believer in building in the desert.