Exporter luck in Amazon’s Australia move
Amazon’s arrival in Australia is a huge opportunity for exporters, says an expert who has helped dozens of New Zealand firms sell through the online marketplace.
The United States retail giant is expected to open its first fulfillment centre in Australia any day, and so far most debate in New Zealand has concerned the possible hit on domestic retailers.
But consultant Hamish Conway said Amazon’s arrival in Australia could help Kiwi firms wanting to sell their products through Amazon Marketplace – a service Amazon provides that lets businesses sell items via its website without losing control of their pricing and marketing.
Conway’s company, Sell Global, helps about 50 New Zealand companies sell products through Amazon Marketplace, but he estimates there are hundreds of Kiwi companies doing that in total.
Amazon states on its website that more than 40 per cent of its sales, by volume, are through Marketplace partners, rather than of stock it owns itself.
The company provides two basic Marketplace options.
Businesses could simply use its website to list their products, for which they could expect to pay a ‘‘referral fee’’ of about 15 per cent, Conway said.
Alternatively, they could send their stock to an Amazon fulfillment centre, such as the one it is opening in South Melbourne, so Amazon.com would ship their products to customers itself.
Conway said companies could expect to pay an extra 10 per cent to 20 per cent of sales proceeds to Amazon for that service, called Fulfillment By Amazon (FBA).
‘‘Amazon will ‘pick it, pack it and ship it’ and handle any customer service, which is great as it removes a big headache.’’
Conway said companies could expect to sell twice as much through Amazon if they used FBA, rather than managing distribution themselves.
That was because FBA meant sales were covered by Amazon Prime’s free two-day shopping option, which was popular with shoppers.
He said Amazon regarded Australia and New Zealand as ‘‘one market’’ and his own belief was that it would set up additional fulfillment centres in Australia soon – and in New Zealand within five years, if not much sooner.
‘‘I think New Zealanders will adopt Amazon faster than Australians because we don’t have many good alternatives whereas the e-commerce options in Australia are much broader.’’
The fees associated with FBA were a bargain, he said. ‘‘It is a cost-effective way to reach an audience in the US, UK or Australia.’’