If you’re an Amazon seller and you haven’t considered the Australian market, you may want to give it a try. Using Amazon Australia will give you a head start in rankings and reputation before the market gets way more crowded.
Amazon’s Efforts to Conquer the Australian Ecommerce Market
Australia has its own functional requirements, regarding ecommerce and international shipping; therefore, in the past, Amazon couldn’t just setup the platform and let it grow organically.
However, a couple of years ago, Australia’s e-commerce market took an unexpected twist. So much so that in 2018, it was expected to rise to USD $12 billion in sales and USD $16 billion by 2022. Since then, Amazon has undertaken the task of overthrowing its main competitor in Australia: eBay. From 2017 to 2019, the tech giant had a staggering increase of 1500% in the oldest continent, with a revenue of $292.3 million!
Challenges Amazon’s Faced Along the Way
Not everything has been a wall in the sunshine for Amazon.
A research by Power Retail showed that while awareness of Amazon is high, only 6% of online shoppers in the country engage with Amazon actively.
Let’s take a look at a couple of factors that cause this situation:
- High costs. More than half of Australian shoppers don’t consider Amazon to be the cheapest option. And a third of the customers that visit Amazon’s Australian marketplace leave the site without doing any purchase.
This is in part due to the big presence eBay has in the Australian online market.
- Customer service. Amazon has been having issues in providing the same customer service it provides sellers and customers in other countries. Most of current Amazon Australia shoppers can’t find the product they’re looking for on their first search page.
Actually, last year, customer satisfaction was not great. People who had bought on Amazon Australia gave it a Net Promoter Score (NPS) of -7, while Amazon in the US has an NPS of 61.
Rising Up from the Ashes
Despite the difficulties, Amazon Australia is to be the company’s fastest growing marketplace. Amazon has been working hard to earn the buyers’ trust and to provide the care they need.
Here are just a couple of things that have contributed to Amazon’s success in Australia:
#1 – Amazon FBA
Fulfillment by Amazon (FBA) was introduced in late February 2019 in Australia to attract more sellers. They can have the option to ship their products to the company’s fulfillment center in Melbourne and pay Amazon to store, pick, pack, and deliver customers’ orders directly as well as handle returns.
This is a cost-effective option for retailers. You only pay for the orders Amazon fulfills. The cost of shipping is already included in your fees.
#2 – Amazon Prime
Prime already has been proven a huge success worldwide with more than 100 million Prime members globally.
The service includes:
- Exclusive discounts
- Free expedited shipping on millions of items
- Release-date delivery of pre-order items
- Unlimited video streaming
- Unlimited music streaming
As a seller with FBA, you don’t get an extra charge for Amazon Prime Free Two-Day Shipping and FREE Shipping on eligible orders.
What Can You Do as A Seller to Make Profits in The Australian Market?
Fees
The fees for sellers on the Amazon Australia Marketplace are:
• $49.95 fee to list products on Amazon.com.au
• 6-15% commission fee on top of sales. This fee is determined by the type of product you’re selling.
Shipping
As a seller, you organize the shipping yourself. Try to make sure your inventory is updated and respect shipping times. Remember you can always get FBA.
Marketing your products
Amazon considers different factors in product listings to use their market search engine to rank products. What is the best way to present your product’s features, price, and availability to have a better ranking?
Through:
- Social media
- Branding and optimizing your product listings
- PPC advertising
- Using A+ Content
Don’t forget to do your run a thorough market research to find out your audience’ needs and wants.
Getting paid
Selling overseas can be tricky, but there are different ways to do it.
–Foreign Bank Account: By opening a bank account in Australia, and then transferring the money. Keep in mind that this might be hard to do and you might not get the best exchange rate.
– Third-party money transfer. There are a couple of services out there offering seller accounts. That way you can receive payments in different currencies and get better exchange rates.
Taxes
Amazon automatically calculates, collects, and remits a 10% GST. So, you don’t have to worry much about it.
Is it worth it?
This is more of a personal decision. You should consider your product demand, target audience, and cost structure.
Consider the human factor
- A key factor in the success of any company is connecting with the community. The human factor can make or break a business. Getting to know the culture of the people you’ll be working with is the wisest way to connect with them. Amazon has used a couple of programs to strengthen its bond with Australian workers, sellers, and customers.
Amazon’s Additional Efforts in the Land Down Under
Amazon Web Services (AWS) Internship Program
The Next Generation Internship Program of Amazon Web Services (AWS) was launched in Sydney at the end of 2019. The goal is to provide an opportunity to gain exposure to the AWS business to people in the early stages of their career.
Amazon’s particular culture and way of doing business encourage interns to absorb all the knowledge they can to better understand how the company works.
Amazon Flex
Just launched in January of this year, this program was created with the aim of providing individuals in Sydney and Melbourne with opportunities to become their own boss and make some extra cash by delivering items. Delivery partners get to decide how much they work and their schedule.
The program is currently available in seven more countries. With this options, sellers will be able to supplement their existing delivery network and ramp it up, if necessary. Not to mention, customers will be a lot happier with faster deliveries.
Giving back to the community
Amazon.com.au and Amazon Web Services constantly work with organizations like Foodbank Australia, Australian Red Cross, The Smith Family, and the Starlight Children’s Foundation, and the government departments and local councils, either to source or donate essential products.
During the pandemic, Amazon has made sure to be of assistance and provides support to local organizations near their fulfillment centers in Melbourne, Sydney and Perth.
Final Thoughts
Amazon Australia definitely had a bumpy start two years ago, when it was introduced to the Australian market. Although the hype was there, once the platform was launched, the customer experience did not translate as smoothly as it should have.
However, Amazon Australia has risen to the task and implemented a series of strategies that now has positioned it as the fastest-growing marketplace within the company. Amazon is definitely well on its way to become a success on the other side of the world, as it has been in other countries.
As a retailer, it’s worth pondering how your products will do with an Australian audience, or you can be more creative a develop a specific campaign. With Amazon, you’re just a click away from an entire new set of leads. Knowing the strategies Amazon uses to beat its competition in other countries can help you tweak your marketing strategy to conquer the Australian ecommerce market.
