Amazon Australia’s prices are generally undercutting local rivals, but watch the delivery costs

Taylor Swift’s new album Reputation on Amazon Australia. (Source: screenshot)

Amazon Australia opened as a general store this morning, amid predictions from experts that it would initially undercut and absorb losses to establish market share.

Industry research firm IBISWorld even put a number to it, last month saying the US retailer would undercut Australian rivals to the tune of 30%, while an Amazon staffer reportedly said the company was out to “destroy” the local retail scene.

So does the hype match reality? Business Insider compared some items and saw mixed results.

For example, the new Taylor Swift album Reputation is on sale on Amazon Australia for $15.98. That CD alone doesn’t reach the $49 total required for free delivery, so at the very least $5.99 has to be added for postage.

Compare that to JB Hi-Fi selling Reputation for $21.99, which makes Amazon more than 27% cheaper. But JB only charges $1.69 for its cheapest delivery option, making the total cost $21.97 for Amazon and $23.68 for the local retailer for a final difference of just 7%.

Over in the kitchen section, a Sunbeam digital slow cooker is selling at Amazon Australia for $54.97, which qualifies for free shipping.

Sunbeam slow cooker selling at Harvey Norman. (Source: screenshot)

Australian retail chain Harvey Norman has the same cooker at $74, meaning Amazon has undercut them by nearly 26%. Add the $7.95 delivery cost, and Harvey Norman is beaten by 33% — a definite win to the newcomer.

For electronics, we saw a portable hard drive from WD on sale for $89 on Amazon, which again meets the $49 free delivery threshold.

Over at OfficeWorks, the same 1TB hard drive is selling for the same price. And the retailer also offers free delivery for orders over $55, so it’s draw.

So despite predictions of rock-bottom prices, shoppers should still be wary of the total cost for Amazon Australia products after delivery fees are added on.

Amazon Australia’s free postage for orders $49 and over is a great deal, but some Australian retailers, such as OfficeWorks, may have a similar deal, so it’s worth shopping around.