Amazon Australia Launch – One Week On

We’re a week on from Amazon’s big Aussie debut and as expected, the media pundits and retail ‘experts’ have had plenty to say about it.

Just as in the lead up, the reaction to the launch has been decidedly mixed. With so much contradictory commentary coming out, we thought we’d cut through the noise and weigh up what we know with what’s been cherry picked from Twitter to deliver our verdict on Amazon’s newest and Southernmost marketplace.

Was it a success?

Amazon have announced their Australian launch as their biggest ever international opening, with first day orders higher than in any other country in the company’s 23 year history.

Considering the Australian market by population is one of the smallest they operate in, this is no small feat and definitely flies in the face of predictions that Australia’s low online shopping participation rate and similarities to Canada would offer some protection for retail stalwarts like JB Hifi and Harvey Norman.

If the stock market’s reaction to Amazon’s launch is anything to go by, a bounce back in shares for some of Australia’s blue chip retailers might be an indication of a lacklustre launch, and much of the press coverage has supported this conclusion with some customers finding selected products were cheaper elsewhere.

Of course, it’s pretty easy to string together a few cleverly worded negative tweets and declare the launch a ‘failure’, and there’s plenty of Gerry Harvey’s out there happy to provide the media with negative commentary to support it, but outside of this there’s little actual evidence to support the conclusion that Amazon’s launch was anything other than a success.

The only concrete source we’ve come across is Amazon’s official announcement that their Australian launch was their biggest ever international opening, with first day orders higher than in any other country in the company’s 23 year history.

Considering the Australian market by population is one of the smallest they operate in, this is no small feat and definitely flies in the face of predictions that Australia’s low online shopping participation rate and similiraties to Canada would offer some protection for retail stalwarts like JB Hifi and Harvey Norman.

But hey, apparently a few people on Twitter found Lego sets that were more expensive on Amazon than in Myer.

I guess someone should let Mr Bezos know it’s time to throw the towel in.

Are the prices cheaper?

This one’s a little tricky – and it comes down to your understanding of how Amazon works as a marketplace.

The perception amongst Australian consumers – and the research averse media – is that Amazon sets static sales prices for all its product catalogue just like the traditional retailers.

This is not the case.

Most journalists covering the topic still don’t seem to get that a large share of the products on Amazon are not sold by Amazon themselves, but by third-party sellers.

With the number of merchants growing daily despite still being in invitation only launch round, the price competition on Amazon between sellers is only going to heat up, especially when FBA launches.

Amazon Australia only launched a week ago and already 1,000s of products are priced lower than anywhere else. For 3rd party products, sellers set the prices and they’ll be feeling the downward pressure on price point if customers are buying elsewhere, even those that are enjoying a brief window of having ‘free reign’ selling their products on the platform before more sellers flock to Amazon (and drive prices down further).

Another factor worth considering is that Amazon are yet to open up their full lineup of distribution centres. Add that to the customer service minefield that is online retail in December and a distribution infrastructure still in its infancy, it makes perfect sense that Amazon wouldn’t be pushing for maximum sales volume from day one. Low prices increase demand, and despite the launch Amazon’s logistics network isn’t yet at full capacity, and there’s every chance their pricing strategy reflects that.

Don’t be surprised if you start seeing prices for stock held by Amazon (as opposed to 3p sellers) drop dramatically as we move out of the Christmas peak and start hearing announcements relating to new fulfilment centres.

How is it for sellers?

Whilst it seems the listicle loving online hipster crowd have thumbed their noses at the launch, the sellers we’ve talked to have all had the same overwhelming reaction:

Woooohooo!

In the last week I’ve heard countless stories from sellers lucky enough to have been part of the launch that have made me question why I haven’t dropped everything to become a full-time Amazon seller.

“I sold my first product in under a minute of listing it”

“I can’t list products as quickly as I can sell them”

That’s the gist of what we’ve been hearing since last Tuesday. The only sellers that aren’t happy are those that haven’t been able to get through the invitation only round, a list which gets shorter every day as Amazon start opening up to more and more merchants.

If you’re looking to sell on Amazon Australia and haven’t expressed interest yet, submit yourself for consideration here and we’ll pass your name on to Amazon to be considered in their next round of invitations. 

The verdict

In summation, just like they jumped the gun on announcing the launch date it seems the media have been a little early to brand Amazon Australia a failure.

Everything we’re seeing behind the scenes points towards plenty of happy sellers and happy customers, and with the online marketplace barely half way through the first act, it would be foolish to write it off just yet.

Have you experienced Amazon Australia’s launch first hand as a seller or a customer? Share your experience over at our Amazon & Online Selling Facebook Mastermind Group – Codisto Super Sellers.

 

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