It's Here! Amazon Australia's First Factory Has Officially Opened

Image: Getty

They have arrived.

Melbourne's Dandenong South is a whole lot busier now that online retail behemoth Amazon has opened its first Australian fulfillment centre.

We knew it was coming and now it's here. Amazon is currently welcoming its troop of Amazonians to the 24,000 square metre Melbourne fulfillment centre - the first in Australia - to prepare for their imminent launch. Workers have begun to filter in to the nondescript red, white and blue shed that you'd hardly know is owned by Amazon but for the small A-frame in the parking lot greeting them upon arrival.

No word yet on when exactly Amazon is going to start fulfilling orders from the centre but with some huge sales coming up over the Christmas period it can't be too far off. Black Friday, one of the biggest sales of the year, is only three weeks away.

It wouldn't surprise me at all to see the Melbourne fulfilment centre officially opened in the next two weeks. As it stands, here's everything we know so far.

Image: Getty

Local retailers are likely to be feeling a little anxious seeing these images filter through. It's clear that Amazon will disrupt the local retail market, but to what extent we can only wait and see. It's a good time to be a consumer, but a retailer such as JB Hi-Fi, Harvey Norman, Myer... it's time to throw up some prayers, I think.

Here's some further reading for anyone who needs to be brought up for speed:

Amazon's Australian Launch: Everything We Know So Far

Image: iStock

Amazon is finally launching a shopping service in Australia - which means you will soon be able to buy everything from food to electronics without paying those exorbitant international shipping fees. Here's everything we know about Amazon's arrival Down Under so far.

Six Things We Need To Know About Amazon Shopping In Australia

It is now certain that Amazon will be setting up operations in Australia. Yesterday, the shopping giant announced plans to open a 24,000 square metre fulfilment centre in Melbourne. By this time next year, Amazon expects to be fully operational. But there's still much we don't know. Here are six burning questions that Amazon needs to answer.

Amazon Is About To Kick Traditional Retail’s Butt

Image: iStock

We are at the dawn of a new era - and like the dinosaurs who just thought they were having an off day - many Aussie retailers aren’t going to know what’s hit them. In the coming months Amazon will start opening its online doors in Australia. And already locals are seeing an impact.

How Amazon Australia Will Affect Existing Supply Chains

Image: Getty Images

Amazon’s entry into the Australian retail next year is already hitting retailers hard. But it’s not just bricks and mortar stores that will be hurt. All those goods Amazon will be shipping, either from their own warehouses or from resellers who take advantage of Amazon’s market place will need to get to customers like you and me. That means warehouses, planes and trucks will be needed - and it will put entire supply chains and logistics providers under new pressure.


Comments

    It's a good time to be a consumer, but a retailer such as JB Hi-Fi, Harvey Norman, Myer... it's time to throw up some prayers, I think.

    Don't know about JB but others like Harvey Norman and Myer have had plenty of time to adapt and chose not to.

    Seriously, even simple things like click-and-collect (shop online but then go to the store to collect at one's own convenience) make a big difference.

      The HV website is a dogs breakfast! the UI is horrible and I always love to see Gerry Harvey squirm lol

      I think JB will be fine, their online presence is pretty good and they have built customer loyalty over a long time. Myer, likewise, will probably be fine at least in the short term, as their main drawcard is clothing and people tend to prefer to be able to walk into a physical store to try clothes on before they buy them. Any clothing stores will probably be safe for now really, at least until Amazon launch more physical stores.

      Others like Harvey Norman, EB Games, Good Guys, Bing Lee, Jaycar etc as well as many smaller ones might find themselves in a bit of hot water though.

        This is the thing, even something as simple as "Click and Collect" make a huge difference.

        I've been using that of late with JB Hi-Fi so I can get the goods I pay for at my own leisure. And while I'm there, I might browse anyway and maybe even buy yet more stock so it's win-win for the store.

        But there are still some, like Harvey Norman, that still think everything should be on their terms. Including availability of stock.

      Well.. I don't know.
      On the surface, aussie retailers are over charging, over exposed and about to be pushed off a cliff. But, behind the scenes who knows? We've known amazon are coming for a decade, and certain of it for about 3 years, so they've probably known a little longer. If they haven't been preparing, well they have only themselves to blame, but I suspect they have.

      The thing is, even if they have been preparing, why would that be visable to us before amazon get here? Expensive shipping costs, premium retailer prices, etc make them a lot of money in the competative reatil space - no need to change any of that before amazon have opened their doors.

      That said I've seen some things - EB Games, one of the most over exposed has in the last few weeks totally diversified. They're facing blows from several directions with physical game sales switching to digital, and amazon threatening to significantly lower the cost of games, they've been hurridly switching out their stores to about 50% gaming, 50% merchandise - sort of a nerdy gift shop.

      As for JB, I don't know. On the one hand very expensive, on the other good customer service and no direct competition. Their online sales will likely dry up pretty fast, and pickup in store will take a hit once amazon prime arives, but we've seen in other countries that Amazon have gone to that usually 1 JB-like store survives.

      It's really the department stores at greatest risk. Harvey Norman can do one, they fought to make us pay GST on all imports so I don't care if they die, but Myer and David Jones... I'd like them to stick around. Although, UK department stores Debehams and John Lewis are entering the Aussie market at the same time, presumably because they have nearly 20 years of experience of fighting amazon in the UK and think Myer and DJ aren't ready for the fight, so there's an opening for them.

      Based on other countries, it's going to be a huge shake up, but not Armageddon. I expect to see the cost of shipping collapse, prices go down, and lots of retail chains shut down or merge, though most will survive. That said, we'll see a big push from the quite customer-focused retail that we have now to no-frills price wars I expect. It's probably going to suck a lot more to work in retail in 5-6 years

      JB, Harvey Norman and Myer all offer a click-and-collect service.

        OK, didn't know about Harvey Norman and Myer. I haven't been in either for years because the price is just unacceptable.

    I have mixed feelings about this. I like the idea of Amazon and can't wait to see what they've got online here and check there pricing, but I also worry that local dealers will be unable to keep up and fall by the wayside. Sure companies like Hardly Normal et al, need to pull their respective socks up, but the smaller more esoteric dealers are going to be doing it tough.

    Amazon can afford to come in and lose shed-loads of money to build up consumer base without needing to turn a profit for years. The existing retailers have had so long to up their online game it's almost a crime. If I was a shareholder in any large chain with a piss-poor online experience I'd be asking difficult questions.
    Having lived in a country with Amazon, I look forward to it coming. Let's take a recent small purchase of mine; a tube of shaving cream from a national chain. Not only did I have to pay for delivery (really? they still charge more than the purchase price for delivery?) I had to wait over 2 weeks for it to arrive, from the other side of the country. I'm kind of used to next, maybe two, day delivery.
    Amazon can't come quickly enough.

      phil - you actually expected to pay less for a single tube of shaving cream delivered individually by a petrol-burning motor vehicle to your private residential premises in one day - and pay NOTHING more?
      You're being ironic ...yes?

        And there's the issue. Amazon UK do 3-5 day delivery for free. If Amazon come to Oz with anything close to that, they'll rightly clean up.
        By absorbing the existing merchant's massively overly-inflated delivery "cost" into their margins Amazon'll shake up the market. It's a different mindset.
        Sadly it seems there's too many Australian's stuck in the old mindset of delivery meaning higher prices.

          This is a big country mate, I mean literally, compared to Brittain, you can't expect a company to deliver in that time frame and fuel ain't cheap either. Amazon will be working on the premise that they are willing to lose money until the competition dries up. There has to be a bit of protection built in for competition.

            Why not? A stocked warehouse in each capital city is achievable. And removes fuel issues (although quite how an Amazon truck loaded with items uses more fuel than another truck transporting the same goods isn't something I see).
            I agree there should be something to stop them becoming a complete monopoly. But the likes of HN, JB etc have had YEARS to nail online shopping and seem to have made very little effort.

              You realise that the distance between a capital city to even another city in the same state can be larger than the entire British Isles, right?

              Comparing delivery times in Britain to Australia isn't even comparing apples to oranges...it's like comparing apples to elephants. You need to compare it to somewhere like the USA, which has a very similar land area to Australia to be in the same kind of ballpark.

                Amazon US shipping is 4-5 days if that helps drum the point home :-)

                  Yes, it's longer in the USA on average than in Britain, thanks for proving my point.

                  And that's taking into account that Amazon USA has warehouses everywhere. Amazon Australia currently has one, and even if they had one in the capital city of every state and territory, would still only have 8. In the USA they have at least 70. SEVENTY. And the delivery time average is still 4-5 days.

                  Amazon have deep enough pockets to take the hit with free delivery in this country until they are entrenched if they choose to do so, but most companies don't have pockets as deep as Amazon, hence why you need to often (but not always) pay for delivery here.

                  And to add to that, US has large distances to cover, but they also have a large customer base. For a country not much smaller than mainland USA, we have a population that's 10% of what the US has. It's unlikely they'll have warehouses in each capital city (England has 3x our population and has two warehouses from what I can see).

                  I'm not saying that delivery will be longer, but the reason so many companies have longer times is the reliance on Australia post and the expense of long distance couriers. The US will have flights going between states regularly at affordable prices, whereas most in Australia have to rely on trucks to ship interstate adding to the expense.

      that's the thing I love about Amazon when I have shopped thru the UK and Canadian sites I have always had perfect customer service and generous return policies customer service seems to be 1st for Amazon than profit

        They don't turn much profit actually, it all goes back into the business. Then people that don't understand taxes chant about them not paying taxes.

    I bet we won't end up with half the variety of the US website. I wonder how Amazon will deal with the sloppiness of Australia Post, Amazon seems to pride themselves on delivery.

    Last edited 02/11/17 7:38 pm

      It will be interesting to see how they handle consumer electronics...because a lot of that stuff isn't available to buy here normally due to licensing and a host of other red tape...will Amazon Australia be able to sell these devices to us where other retailers can't?

      Amazon had contract with Toll, they must be using multiple logistics companies to deliver for different types of shipping.

    Yeah look, I went to buy a geeky keychain yesterday at an Australian online retailer (ebgames actually) and they wanted $10 shipping for it - standard post, not express. For a keychain that could fit in a $2 prepaid envelope.

    I added a lanyard to see if it was a flat rate thing, but no the shipping jumped to $13. So for under $20 dollars worth of items that could fit in an envelope, $13 shipping.

    WELCOME TO AUSTRALIA AMAZON.

    The other location is at Eastern Creek in Western Sydney, NSW. The first pickups for ShipIt (Fastway couriers) is 27th of December. I get a feeling they are going live for boxing day.

      Yes, I too have a sneaking suspicion that Amazon will by-pass anything Christmas and focus on Boxing Day sales too. It is all too obvious what they are going to do. Boxing Day sales are way bigger for retailers than Christmas sales and Amazon would have done their research well enough to understand this.
      It will be their little surprise to the AU marketplace and I bet they advertise the crap out of it on Christmas Day TV and Youtube adds too!!
      However, one thing that I think that everybody is missing here, at least for the first few years of Amazon AU, is that they will be fully reliant on resellers stocking their website. The issue here is the resellers into the AU market will be cautious and will purchase small and will not get the deals that they usually get for US pricing, as we just don't have the population to warrant massive bulk purchasing power. As a result, we will not see the crazy prices we see on Amazon US or Prime because the resellers will still want their usual margins which will be about 35-40% from Amazon after their Amazon fees.
      Further to this, Amazon using Fastway, Startrack and Australia Post?? Yeh right....as if we are going to see cheaper freight costs on their AU site as a result of this. Until Amazon AU puts through some volume there is no way that these freight companies will budge on their pricing.

    Oh I'm sure that the other retailers will follow suit. I mean at the moment they are making a killing. With the advent of Amazon coming to Australia, it just means lower prices and lower profits for the big wigs (but somehow I believe they will still make tons of cash)

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