Exclusive: Aussie sellers prepare for Amazon launch
Among the over 500 sellers that have registered to sell through Amazon Marketplace in Australia are local online retailers Styletread and Costumes.com.au.
In exclusive interviews with Internet Retailing, Lee Munro, managing director of Styletread, and Nathan Huppatz, co-founder of Costumes.com.au, revealed why they decided to partner with Amazon and how close they are to being ready for launch.
They are some of the first Australian retailers to publicly confirm their involvement with Amazon, although others, including Ruslan Kogan (Kogan.com) and Mark Coulter (Temple & Webster) have previously said they are willing to sell through Amazon in future.
Others still have not confirmed but are reportedly gearing up to launch on Amazon in Australia, such as Beacon Lighting and PVH Brands Australia, the local licensee for Calvin Klein, Van Heusen and Tommy Hilfiger.
Amazon remains tight-lipped about the progress of its Marketplace offering in Australia, with even registered sellers kept in the dark about the exact launch date, and those with access to the seller portal, Seller Central, urged not to disclose which categories are live.
But sources told Internet Retailing three weeks ago that the platform was rife with broken links and missing information, including which shipping options would be supported. And Amazon key account manager, Brittany Rinker, said in early October that the company was aiming for a late 2017, early 2018 launch.
The million dollar question – whether Amazon Marketplace will launch in time for Christmas – remains unclear. However, Munro and Huppatz both said they are still in the process of creating product listings.
“We’re still in the early stages of registering on Seller Central. We’re in the process of creating product listings, but there’s still a way to go,” Munro said.
Styletread is using the marketplace integrator Commerce Connect from Fusion Factory to automate the process of loading its large inventory on Amazon, but Munro said they are still working on connecting the integrator with Styletread’s fulfillment systems.
This indicates the footwear retailer plans to self-fulfill its Amazon orders at launch, something that Huppatz and the other 500-plus sellers must also do, since Amazon has not said whether it’s signature warehousing and delivery service – Fulfillment by Amazon (FBA) – will be available in Australia.
“Yes, we will be self-fulfilling. Amazon hasn’t announced any launch date or other details for FBA in Australia, but when they do we will investigate the opportunity,” Huppatz said.
Costumes.com.au operates a 1,900sqm warehouse in Melbourne and uses Australia Post services for the majority of its outbound freight. But Huppatz is taking a “wait and see” approach to decide whether to use Amazon’s logistics, for which the e-commerce giant charges a fee. Depending on the product and category, it could be around 15 per cent of the sale.
“It really depends on the pricing and processes required to use it. Initially, Amazon will not have the traffic and scale as other platforms in Australia so we also have to be mindful of any development and integration cost relative to the revenue that might generate. So I think like many businesses we will take it one step at a time,” he said.
Huppatz said Costumes.com.au has only recently started to create product listings. Like Styletread, it is also using a third-party product that integrates with Amazon Australia.
“It is still an ongoing process as there are some aspects of Seller Central that are still being tweaked prior to Marketplace launch. I think that whenever the marketplace launches we will be ready to transact,” he said.
Just need a bit of time
M2E Pro is one of those third-party products that helps businesses using the Magento e-commerce platform automatically upload and manage inventory on marketplaces, including Ebay and Amazon.
Its software has been used by some 14,000 unique Amazon accounts around the world, and director Alex Podopryhora said it is currently helping more than 50 sellers list on Amazon in Australia.
“Some of them are very well known brands – not only in Australia – some of them are less. We’re excited to see some New Zealand-based retailers to take part in this project too,” he said, declining to name any specifically.
In addition, Podopryhora said hundreds of M2E Pro’s Ebay Australia users that have not yet been invited to sell through Marketplace, are updating their systems to become Amazon-ready.
Podopryhora confirmed that some sellers have encountered technical issues when loading their inventory on Amazon, but said they are now resolved.
“I can say that the business is as usual. We all just need a bit of time,” he said.
According to Podopryhora, the biggest challenge for new Amazon sellers in Australia is simply a lack of experience with the Amazon way.
“Setting up various description policies or pricing strategies requires some specific knowledge, not even mentioning algorithmic re-pricing for fast selling good,” he said.
That’s where sellers that have experience with Amazon in other markets have an advantage. Swanwick Sleep is one of these.
Started by brothers James and Tristan Swanwick in November 2015, Swanwick Sleep sells blue light blocking glasses primarily through Amazon Marketplace in the US, UK, Europe and Canada. And since Tristan is based in Brisbane, they didn’t hesitate to express their interest when Amazon started looking for sellers in Australia.
“They didn’t really say specifically what [made them approve us for Marketplace], but the impression I got was they were looking for experienced Amazon sellers,” Tristan said.
Huppatz also responded to Amazon’s open call-out in April.
“We were then contacted by Amazon directly who enquired about our business. For initial testing of their back end platform they were looking for a few established sellers with large SKU range who self fulfil,” he said.
For Munro, it was the opposite. He was still mulling over the decision to sell through Amazon when the e-commerce giant reached out to him.
“I think they did their market research and saw our product range is very good in our category, so they could kill a lot of birds with one stone. From there, we started the conversation with them,” Munro said.
Pros and cons
Both Munro and Huppatz said they made the decision to sell through Amazon with eyes wide open.
“We considered the pros and cons. The price on Marketplace was definitely a factor. The concern that we would be creating competition for ourselves was another factor. We weighed those up, but ultimately decided the extra customers and exposure we would get was worth it,” Munro said.
For Huppatz, who is also integrating his parcel label printing service, ReadyToShip, with Amazon, the calculus was similar.
“If they help grow e-commerce in general, this will be a good thing for e-commerce businesses that are good operators, but there is no doubt they will have a negative impact on others. We will do our best to adapt to changing retail conditions, as we always have. The only difference now is we have both a new marketplace and a new competitor,” he said.
Tristan is less ambivalent.
“I certainly think [Amazon] is a big opportunity for small and medium businesses in Australia. I think they should embrace Amazon. It’s also a great opportunity for people to start new businesses. With their FBA program, it removes a lot of the barriers to entry,” he said.
This tracks with a recent survey commissioned by CouriersPlease, which found that small and micro businesses have a much more positive attitude about Amazon than medium-sized and large businesses.
Of 193 online retailers who took part in the survey, 62 per cent of micro businesses said they see Amazon’s arrival as an opportunity to grow, while 56 per cent of small businesses, 53 per cent of medium-sized businesses, and 33 per cent of large businesses said the same.
“My take on it is, if you’re a small retailer and you’re doing a good job, your website is good and you’re providing the necessary quality of service, then you shouldn’t be afraid of Amazon,” said Mark McGinley, chief executive of CouriersPlease.
But he conceded it is hard to make accurate predictions about the impact Amazon will have in Australia.
“To be honest, nobody knows exactly what Amazon will look like. It won’t be like it is in the US, where 64 million consumers have Amazon Prime. They’re only putting a facility in Melbourne to start with. But one thing I would never underestimate is what they could do.”