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E-commerce

Amazon Marketplace hits 10,000 sellers in Australia

Four months after launching in Australia, Amazon Marketplace has reached 10,000 sellers on the platform, up from 5,000 at the start of this year.

That is according to a new report from Marketplace Pulse, a US-based e-commerce intelligence firm. The report reveals that 70 new sellers join in Australia every day, making it the fastest growing marketplace relative to its size.

Marketplace Pulse expects Amazon Australia to exceed 50,000 sellers by the end of the year.

Until recently, sellers had to be approved before joining the marketplace, but Amazon has recently made the approval process as simple as it is in other countries, accelerating the growth of sellers considerably.

This is a key part of Amazon’s growth strategy, which it refers to as a ‘flywheel’. More sellers create a broader range of products, attracting more customers, which in turn attracts more sellers.

Besides making it easier for sellers to join the marketplace, Amazon has also made its proposition more attractive, with the launch of Fulfillment by Amazon (FBA) in Australia in February.

The service allows sellers to outsource their entire warehousing and fulfilment process to Amazon for a fee. Many sellers say the fees are less expensive than if they were to do it themselves, thanks to economies of scale.

Sellers that use FBA are also eligible for Prime, Amazon’s free shipping service, which is linked to higher visibility and sales. While Prime is not yet available in Australia – it is expected to launch later this year – customers can currently get free delivery on orders of $49 or more, as long as the item is from a seller using FBA or Amazon itself.

According to the Marketplace Pulse report, more than a thousand sellers are already storing some of their inventory at Amazon’s warehouses, less than a month after FBA launched. Half of those have the majority of their products stored in FBA.

FBA and Prime are key for Amazon’s future success. As the report notes, before FBA launched, many shoppers were not getting their products on time, or at all. As a result 12 per cent of seller reviews on the marketplace were negative, higher than on any other marketplace.

That figure has now decreased to 6 per cent, in line with Amazon’s other marketplaces.

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