Amazon Australia, Threat or Opportunity?
Estimated reading time: 3 minutes 30 seconds.
Amazon launched online product sales in Australia in 2017 and has since established a strong presence in the online market.
Australia and New Zealand are relatively small markets on a global scale. However, Amazon’s arrival in the Australian market has been nothing short of transformative.
For businesses selling products in Australia or New Zealand - whether they’re manufacturers, start-ups, store retailers or online sellers - Amazon Australia can be seen as a threat, an opportunity, or both.
The Threat of Amazon Australia
It’s easy to see why local businesses would feel threatened by Amazon.
It’s difficult to compete with. Amazon’s platform is incredibly well established, both online and in the minds of consumers. They’re able to offer an unmatched selection at competitive prices, and their customer-centric focus means they maintain a consistently high level of service.
Amazon is just… really big. Their scale enables them to offer additional services, like free delivery and local pick-up points, without compromising their bottom line.
How could local businesses in Australia or New Zealand match this multinational ecommerce juggernaut?
The biggest risk would be to ignore Amazon’s presence
Taking a business-as-usual approach puts you at risk of losing customers to Amazon.
If your products are not available on Amazon, customers can choose to go there to purchase similar products to what you’re offering.
Simply keeping your products off Amazon may not be the best strategy. The best approach is to work with the platform. Plenty of Australian sellers have Amazon seller accounts where they sell and market their products.
The alternative is to consider whether you prefer your brand and products to be well-represented and well-priced on Amazon, or to be sold there by online traders completely outside of your control.
The Opportunity of Amazon Australia
At A2X, we prefer to see Amazon Australia as an opportunity for local businesses.
The launch of the Amazon Store Australia has opened doors for third parties to sell through Amazon.com.au.
This means that almost every local business with products in Amazon’s categories can have them represented on Amazon Australia’s marketplace, and sold through Amazon’s fine-tuned selling platform.
Amazon Australia to manufacturers and brand owners
The Amazon Australia marketplace is a great opportunity for your business and brand to be represented on a website with massive online reach.
Having a presence on Amazon increases your sales reach beyond your current distribution. Amazon Australia could be just what you need to serve your Australian customers better.
Amazon Australia to store retailers
One way to think about the future with Amazon operating down under: Your products are likely to find their way on to Amazon sooner or later.
Whether it’s stock bought from your clearance sales by retail traders, or your distributors selling to online discounters, Amazon’s pull is a strong one. Consider getting to the Amazon channel first, and represent your products to your advantage, rather than forfeiting those sales to others.
Whether you have one store, or a nationwide chain, selling on Amazon Australia is one way to better serve your customers. In addition to this, you and your customers will enjoy the benefits of Amazon’s order fulfilment infrastructure for Australia-wide delivery.
Amazon Australia to online retailers
If you’re already selling online through your own ecommerce store, eBay or TradeMe, you are likely well-equipped with product catalogue data suitable for the Amazon category uploads.
Why not open up an Amazon store as a new channel alongside your existing online sales?
The reality of Amazon Australia
Of course, opportunities always come with costs and risks.
Retailers looking to jump on Amazon’s Australian marketplace platform may face GST implications and will need to set up accounting for Amazon as an extra transaction feed.
It is difficult to accurately manage accounts manually for Amazon seller central Australia sales, fees and dozens of other Amazon transaction types.
The standard sales reports from Amazon’s Seller Central portal are complicated and often fail to match up to actual revenue earned in each accounting period. Fees and adjustments are difficult to understand, even for professional accountants.
Bring on A2X for Your Amazon Australia Accounting
Our A2X cloud software service is used in conjunction with your accounting software. It automatically maps Amazon marketplace transactions into usable accounting journals, and posts automatically to the accounting system.
This will save hours for you and your accountant, and top-level opportunities won’t go amiss when you’re not buried in accounts.
Also on the blog:
- An In-Depth Tax Series for Shopify & Amazon: Australia & NZ
- Amazon FBA Secret Recipe for Success
- Bookkeeping: No Longer the Bane of the Booming Amazon Business
- 5 Growth Opportunities for Amazon FBA Sellers
- Why More Sellers are Diversifying Away from Amazon
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