Amazon Australia (Pt1) – The Good, The Bad & The Ugly


Chris Thomas is back covering Amazon Australia and how the country launch has gone. We talk about spend of over $1bn, the Australian Arbitrage crew, damage to Amazon’s brand with negative sentiment.

  • Been in eCommerce since 2001
  • Invented a product and used Kickstarter
  • Runs the Australian Seller podcast

Australians spend $1Bn on Amazon

  • Australians spending over $1bn across the other marketplaces so Amazon decided to open the Australian store
  • Australia has had a very resource-based economy and the economy is strong

Amazon comes to Australia

  • Australia is a vast country and deliveries to remote areas must be a challenge
  • Prime membership has quite good penetration into the rural parts of Australia
  • Amazon FBA launched in Australia in Dec 2017 the most successful Amazon country launch
  • There is a timezone change across Australia too
  • Amazon has only two FBA warehouses in Australia, one in Melbourne and one in Sydney
  • Focus on East Coast currently but can deliver within the 2day delivery service level to Western Australia too

Consumers

  • Super excited too see Amazon coming
  • A lot of pent-up demand with a bang when it took off
  • Impact to other businesses in Australia since Amazon arrived
  • Dread amongst bricks and mortar retailers

Launch Success?

  • The launch was pretty half-baked
  • Google had launched Google Home
  • Amazon wanted a foot-hold for Amazon Alexa
  • Opened with 7 million products and invite only of 500 x 3rd party sellers on the platform
  • Europe and America had 500-600 million products
  • Felt like scant offerings as No Prime and no FBA to start
  • All fulfilled by merchant
  • Amazon was fulfilling some from it’s Melbourne warehouse like pseudo-Prime

Negative Sentiment

  • International Arbitragers came in and duplicated listings, jacked prices up a lot
  • Australians are not stupid
  • Amazon got called out for gauging and took a lot of negative sentiment because Australian buyers did not realise it was 3rd party sellers behind the gauging
  • Negative sentiment upto Christmas and beyond

Taxation

  • Around July 1st (beginning of Australia’s financial year) a change occurred
  • The Australian Gov insisted that Amazon collect GST (Goods and ServicesTax) on their behalf
  • Amazon reacted and stopped Australian’s being able to buy things from overseas marketplaces but they could browse
  • Amazon had a big public relations row with the Australian Gov
  • Australian Gov won the argument by claiming another multi-national was not prepared to pay taxes in the country
  • GST is included in the price the consumer pays

Competition

  • eBay has a strong presence in Australia and is quite mature as a selling platform
  • Australians love eBay mainly because they have been established since the late 1990s in Australia
  • There are lots of 3rd Party sellers on eBay Australia which means  sellers are not confused by the platform
  • Anyone that uses Amazon’s warehouses to fulfil eBay orders is not allowed
  • eBay launched eBay plus – effectively Amazon Prime for eBay customers

Cut-Down Seller Central

  • It’s a Seller Central cut-down interface that’s available in Australia
  • A big omission is PPC and sponsored ads just discount codes
  • You can do exclusive discount codes for promotional selling on Amazon Australia though
  • Marketing is pretty weak, no early review programme and no EBC
  • The algorithm works the same across Amazon marketplaces
  • You can do giveaways and Facebook Ads to rank on Amazon in Australia
  • As there isn’t much volume you don’t need that many giveaways to get you motoring

No Niches…yet

  • The riches are in the niches which is not true in Australia
  • The sales are in the top of the categories which means it is still early days with more to come
  • They’ve just launched Pet and Pantry categories that tells us it is all new and there is more to come

Tools for Australia FBA

  • One of the key tools for Amazon selling is eGrow.io which is basically a JungleScout clone
  • Keeper is a good one
  • Feedback5 is the automatic customer followup

Contact

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