Amazon Australia – What we Know (and What we Don’t)

Amazon AU’s much anticipated launch is so close we can almost touch it, but much to the chagrin of merchants keen to get selling, Amazon head office has been a little light on the specifics.

With all signs pointing to the green light for the newest international Amazon marketplace being just days away, we’ve broken down what we know for sure, what we expect and we don’t know.

1. FBM Only (for the time being)

Savvy entrepreneurs who have built their own little ecommerce empires off the back of Amazon’s FBA program will be dissapointed to learn that Amazon’s initial roll-out will be without one of the cornerstones of their marketplace model that makes Amazon selling so appealing to those with limited resources and experience.

For those that don’t already know, FBA (Fulfilment by Amazon) provides the option to third party sellers to pass the buck to Amazon for all of their shipping and fulfilment duties. When a seller opts into FBA, they simply send their inventory into Amazon’s distribution warehouses (known as ‘fulfilment centres’) and list the product for sale on the marketplace. When a customer orders that sellers products Amazon picks it, packs it and ships it to the customer.

In countries where Amazon has launch its FBA program barriers to entry into the world of online selling have been smashed to pieces with FBA effectively removing the need for heavy investment in warehousing and logistics infrastructure.

In the absence of FBA, when Amazon AU launches all sales will be either Merchant Fulfilled (which means sellers ship products from their own warehousing and through their existing distribution channels) or 1st Party sales – products manufactured by or bought wholesale by Amazon.

When FBA does finally arrive some time down the line, expect Amazon AU to get a lot more competitive with an influx of ‘Private Label’ products and more sellers fighting for the ‘buy box’ on branded goods.

2. Melbourne Will Be The Heart of Distribution

Amazon recently opened their first major distribution centre in Melbourne. The 24,000 square metre hub looks like it will service the entire country for the launch period at least.

The southernmost of Australia’s three most populous cities, at over 800 km from Sydney and 16,000 km from Brisbane (let alone the even further cities on the North and West coast) it seems some draw cards like same-day shipping aren’t likely to be on the table on day one.

Considering Sydney’s relative equidistance from its two east coast rivals to the North and South, many would think it the more suitable choice but with the go ahead already given on Melbourne we’ve tipped a Brisbane fulfilment centre the likely next choice to spread the love more evenly.

We would expect any announcement on FBA’s arrival to coincide with the opening of additional fulfilment centres as the need to accommodate all that 3P inventory would surely exceed the capacity in Dandenong South.

3. We’ve Delayed The Shipping Revolution

Considering they have just one fulfilment centre (compared to over 100 fulfilment centres in the states and a dozen plus in the UK) servicing the world’s sixth largest country by landmass (with an average distance between capital cities in the thousands of kilometres) its safe to say that Prime Now – Amazon’s 1 hour same-day delivery service for Prime members – won’t be a part of the launch, at least not for most of the country.

We probably shouldn’t hold our breathe for same-day or even next day delivery either, not until they built more fulfilment centres across the country. This is a big shame for the millions of Australians who have watched the world pass them by with lightning fast, reliable delivery becoming standard fare in the States and across Europe, while we’ve had to settle for ‘your package should arrive next week if you’re lucky’.

It seems we will be getting some form of Amazon Prime – the membership based express delivery service for Amazon customers – but what sort of delivery time-frames we can expect is anybodies guess. It also looks like it won’t be part of the launch but will come some time in the new year. Amazon have identified delivery speed as one of the ways it’s going to blow the competition out of the water, but with just one fulfilment centre its lucky that the bar for speedy delivery has been set so low by Aussie retailers in the past.

4. Who Can Sell on Amazon AU

So far access to the Australian version of Seller Central has been invitation only. Amazon has reached out to a number of Aussie brands and retailers, and some small sellers have managed to sneak on as well. At Codisto we’ve already helped some of our merchants load up their product catalogues ready to go on day one.

For anyone without an invitation you can leave your details here and Codisto will submit them for consideration to Amazon. Ultimately though at this point its up to Amazon to pick and choose who gets to sell on their marketplace at launch. At some time in the new year we expect them to open it up to the public.

5. When is the Launch Date?

This is the question on everybody’s lips, and unfortunately even though we could be less than a week from launch we don’t have a firm answer yet.

With Black Friday and Cyber Monday at the end of November, a lot of analysts and media outlets are tipping launch to come before these strategic sales dates. It would certainly pave the way for Amazon to make a big splash and mark their territory before the December holiday peak kicks off.

That being said with each day that passes the task of launching a stabilising a major new ecommerce website that’s at low risk of weathering the influx of deal hungry shoppers gets harder and harder. It could be that they are delaying the launch right up to the 11th hour and going live as late as Friday the 24th of November – the high volume of customers would certainly make a good test-bed for the platform.

Alternatively it’s a possibility that they are holding off until early December for a quieter, under the radar launch to avoid the kinds of PR disasters that have dogged the organisers of Cyber Monday, a very real possibility of launching on the biggest online sales day of the year.

 

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