Amazon is turning up the heat on Australian retail with delivery services for local businesses

Peter Parks/AFP/Getty Images

  • Amazon Australia is rolling out Fulfilment by Amazon — its service that allows retailers to have products stored and shipped to local customers by Amazon.
  • It removes a pain point for retailers who don’t have the scale to specialise in logistics, allowing them to focus on core business, while also broadening Amazon’s product offering in Australia.
  • The service is part of Amazon’s continuing rollout of its retail product suite.

Amazon has launched a key front in its assault on the local retail sector, opening its logistics capabilities and customer service skills to Australian businesses.

Local businesses selling through Amazon Marketplace will now be able to have their goods stored and delivered by the giant US online retailer through the Fulfilment by Amazon (FBA) program.

With Fulfilment by Amazon (FBA), sellers just send the products they want to ship to Amazon’s warehouse and when a customer places an order, Amazon will pick, pack and ship.

This saves time and money because businesses no longer need to individually purchase shipping materials, pack orders, and make multiple trips to the post office.

Amazon also handles customer returns.

Still to come from Amazon Australia is Prime, an annual membership with free two-day shipping and other benefits. This is expected mid 2018. It costs $US99 a year in the US, where it has an estimated 90 million subscribers, and it is key to Amazon’s strategy for dominance in retailing.

Amazon in December launched its full retail offering, with hundreds of thousands of discounted goods and one-day delivery, on its Australian website.

Amazon picked up a wave of shoppers looking for Christmas presents. Amazon’s first Australian warehouse at Dandenong in Victoria is currently fulfilling orders

And last month Amazon launched digital voice assistant Alexa, ready to speak to the public in a native Australian accent.

“Size doesn’t matter in the digital economy and Amazon Marketplace helps to level the playing field when it comes to starting or growing a business,” says aid Amit Mahto, Head of FBA in Australia.

“We are focused on helping Australian businesses of all sizes succeed by inventing on their behalf and making our technology available to them and FBA is a fantastic example of this.

“Customers shopping on amazon.com.au will be able to access an ever growing and more unique range of products accompanied by the convenience of fast delivery and Amazon’s world-class customer service.”

FBA gives customers access to items sold by Marketplace sellers with the benefit of Amazon delivery. That means free delivery on eligible orders above $49.

Christian Gibson, co-founder of the Byron Bay environmentally active photography business Gobe, started selling on Amazon in 2015 and now uses fulfilment in several countries.

He say Amazon requires sellers to add their bar codes.

“You send stock in bulk to FBA warehouses and as orders role in they pick the orders and ship them out,” he told Business Insider.

“They will put a limit on how much you can send to them and then, as your account grows and you get a better sales history and you are moving a lot of stock, then the limit on how much they will warehouse for you increases.

“Amazon doesn’t want you sending 100,000 units if they just sit their and never sell. They have their algorithms working.”

Globally, about half Amazon’s total units sold come from Marketplace sellers.

In Australia, there is a flat fee based on the product type, dimension and weight. he normal fee for a 30 kg product would be $25.48.

A storage fee is also charged each month based on the daily average volume. The fee is $19.40 per cubic metre up to September.

Amazon is running an introductory promotion giving sellers access to free storage and removals until the end of August when enabled in March.

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