The Prime advantage on Amazon Australia

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Amazon Australia launched to great fanfare towards the end of 2017. Its launch had been long anticipated, and although landed after Black Friday, it represented an important new horizon for Jeff Bezos’s retailer and marketplace and was the first brand new national dedicated site to launch for some time.

But the first year of operation has been anything but smooth. There have been reports that sales have been lack lustre and there has been the thorny issue of the GST (goods and services tax) to contend with. In the case of Amazon, they’ve opted to put blocks to stop Australians shopping from merchants located overseas.

It is clearly too early, and unwise, to write Amazon Australia off. Not least because Amazon isn’t in the business of launching a national site in order for it to flop. And in an analysis of the Australian site, Morgan Stanley give some of the reasons why the distinctiveness of that marketplace will actually enhance Amazon’s prospects down under. You can read the full article here.

And it’s Amazon Prime that could be the crucial weapon in Amazon’s arsenal. Not only is it being promoted aggressively on Amazon Australia but at $59AUD per year it’s much cheaper than in any other country.

Several points made are of particular interest:

The concentrated population is good for Prime

Australia might be a huge island nation but its population is predominantly concentrated in a relatively small area. The combined population of Australia’s three largest cities — Sydney, Melbourne and Brisbane — constitutes for around 39% of the total Australian population. That is a greater density than the likes of the UK and USA.

‘Geo-blocking’ is good for local sales

Amazon has taken the decision to avoid the complexities if the GST by presenting Aussie shoppers from purchasing goods from international merchants. So Amazon Australia has established a ‘Global Store’ that funnels customers to its local Prime sales. As an overseas merchant you can only sell to Australia by using FBA

A sophisticated and competitive courier industry

Despite its size, Australia has a competitive and sophisticated shipping and courier offering. That’s helpful to Amazon because it gives them multiple options for shipping partner and cutting good deals.

From a merchant perspective this examination of Amazon does offer some useful insights if you are considering selling in Australia but are based overseas. Firstly, don’t side with the doom and gloom merchants who have already and consider that Amazon Australia is not worth the effort.

And if you are interested in experimenting with it Amazon Australia, it’s absolutely worth plugging into Prime via FBA. You can send a single consignment of your stock to an Amazon Fulfilment centre just as you would in the UK and EU and Amazon will fulfil on your behalf.

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