Amazon is ready for Australia.
On Monday, 500 merchants will gather in Sydney to hear from the company’s Australia manager, Rocco Braeuniger, and head of seller services for Australia, Fabio Bertola, on how the whole platform will work.
Separately, we have heard from a reliable source that the Amazon Australia platform is ready to deploy.
The timing of the merchant event and the news that the Amazon system is ready in Australia all points to what has been widely expected: that the retail giant will be operational in Australia in time for Christmas.
While Amazon.com.au website has operated for years, it has been only an online shopfront that the US parent company sells books through. However, as we confirmed in March, Amazon has been setting up a full-scale operation in Australia.
A month ago, Amazon already claimed 500 Australian businesses had signed up to sell through its third-party marketplace. This week the first of those businesses, shoes retailer Style Tread and Costumes.com.au, publicly declared they were registered and preparing to sell through the US giant’s local arm.
Amazon will host hundreds of Australian merchants at a sell-out Marketplace Summit in Sydney on Monday where the senior leadership will outline the operation to sellers.
Of particular interest will be the commission, or “clip”, that Amazon will take from Australian merchants who sell their products through the platform. While it may mean some sellers’ margins are reduced on individual products, the ability to reach the vast Amazon customer base presents a compelling proposition.
Queensland tech startup KoalaSafe was already selling on Amazon in the US, and its co-founder Adam Mills will share his experience with other Australian businesses at the Sydney summit next week.
“For those who are selling physical products, Amazon provides a great opportunity to get these products in front of customers and we encourage businesses to take full advantage,” Mills said when the summit was announced.
KoalaSafe, which produces internet child protection devices, first saw success in the US through online sales, then that turned into a physical sales deal with retail chain Target this year.
Amazon’s first fulfilment centre in Australia is now also humming with activity, as the first pictures of the Melbourne complex last week showed local staff welcomed with the “It’s still day one” motivational slogan in the car park.
There is plenty of motivation for Amazon to get cracking on its Australian operations, as it would want to grab market share during the busy Christmas season and promote the annual Black Friday internet sales event (November 24 this year), which is a giant event each year in US retail and increasingly in the consciousness of Australian consumers who see annual reports of huge discounts and trade volumes across the Pacific.
Citi analysts reckon all these signs point to Amazon Australia opening to the general public before the end of this month.
“Amazon is likely to launch in Australia by mid-November, subject to logistics and website testing. This is likely to disrupt retailer pricing architecture and force investment in supply chain, online and delivery,” said Citi retail analyst Craig Woolford told Fairfax Media last week.
An Amazon spokesperson told Business Insider last week that Dandenong South, in Melbourne’s south-eastern suburbs, was selected as the location for the first fulfilment centre without any government funding or tax rebates.
“The site is an excellent fit for Amazon’s requirements – great location, good infrastructure, excellent source of talent – we are excited to be opening our first Australian fulfilment centre in this location,” said the spokesperson.
In its latest quarterly results, Amazon beat market expectations to post $US43.7 billion in revenue. The company is forecasting between $US56 billion and $US60.5 billion for the lucrative Christmas quarter, which would be 28% to 38% growth from the same time last year.
Amazon floated on the NASDAQ in May 1997 with a first day closing share price of $US1.96, adjusted for splits. Today the stock price is at $US1,105, which is a mind-blowing 563-fold increase – making founder Jeff Bezos the wealthiest person in the world briefly in July, then again two weeks ago with $US117 billion to his name.