‘Let’s make history!’: Amazon tells Australian sellers to get ready for Thursday test launch
AMAZON has vowed to “make history”, announcing that it will test launch its Australian site on Thursday — just in time for Black Friday sales.
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IT’S finally here.
After months of speculation, it appears Amazon’s full Australian offering will go live just in time for this week’s Black Friday sales, a move widely tipped by retail experts.
In an internal email on Tuesday, obtained by tech website Lifehacker, the e-commerce giant told all Amazon Marketplace sellers to have their pricing, stock and details ready for an “internal testing phase” kicking off tomorrow.
“Dear Seller, to prepare for the launch of the Amazon Marketplace in Australia we will start an internal testing phase with a small number of customers on Thursday 23 November 2017, 2pm AEST,” the email said.
“Once you have passed Seller Identity Verification you will be part of this testing phase and you should be prepared to receive orders from this point onward ... We are very excited to have you on board during this testing phase. Let’s Make History!”
It’s not clear how many customers will participate in the test. Five hundred Australian suppliers will be trading through the Marketplace from day one, but the company has been tight-lipped about exactly what products will be offered.
In recent weeks, a number of items have popped up on the Australian site including H.P. laptops the AmazonBasics private label range including electronic cables, linen, dumbbells, batteries and alarm clocks, Business Insider reported.
Queensland University of Technology retail expert Dr Gary Mortimer earlier this week predicted that electronics, clothing and sporting goods would be on offer immediately.
“It’s hard to tell [what will be sold] but I suspect what they will have on offer will be very similar to eBay today with categories and tabs like sporting goods, automotive, definitely clothing for ladies, children and men, electronics, sporting goods, footwear and accessories, homewares and furniture possibly, dry goods and bespoke ingredients and foods,” he said.
“Amazon will open Marketplace which is a very similar platform to eBay ... eBay today has changed a lot from when it launched, it started selling second-hand products from home, and now 80 per cent of products sold are new products from small to medium businesses.”
In a note on Tuesday, Euromonitor International analyst Hianyang Chan said Amazon’s launch “might be the moment when shopping behaviour in Australia swings decisively towards e-commerce”.
“Internet retailing might only currently account for a small percentage of total retail sales,” Mr Chan said. “However, the entry of Amazon will very possibly spark off a much needed increased in competition that will bring both opportunities and threat for existing retailers.
“The online retailing giant is expected to not only offer competitive pricing across a wide range of products but also enhance customer’s online shopping experience.
“This disruption will likely force current retailers to better leverage their relationship with their customers, strive to offer a more exclusive range and further innovate to improve their services and product offerings to better entice consumers.
“It will be vital for retailers to embrace the changing dynamics, step out of their comfort zone and chart their own way forward or risk being left behind.”
IBISWorld analyst Kim Do said Amazon intended to offer items for 30 per cent cheaper than local retailers.
“This is expected to appeal to price-conscious Australian consumers, and is likely to affect local retailers that have found it difficult to adjust to a shift in consumer spending behaviour over the past five years,” Ms Do said in a note on Wednesday.
Amazon is likely prepared to make initial losses to quickly gain market share. “The company is expected to focus on providing consumers with low prices, a diverse product range and fast delivery,” Ms Do said.
“However, to be successful in Australia, Amazon’s current business model will need to be adapted to the Australian market.
“For example, Australia’s large geographical size and dispersed population will lead to higher distribution costs compared with Amazon’s home market in the US. This is likely to limit the company’s ability to offer Amazon Prime Shipping services in the short to medium term.”
Earlier this year, Amazon officially confirmed it was setting up shop down under with its first fulfilment centre in Melbourne’s Dandenong South.
At the time, Morgan Stanley warned that the “Amazon Effect” would wipe $800 million from the earnings of listed chains including JB Hi-Fi and Harvey Norman, but said the biggest hit would be to Wesfarmers, which could lose more than $428 million in earnings by 2026.
In September, analysts at Citi estimated the impact of Amazon’s arrival in the second quarter of FY18 could be $200 million, or 0.2 per cent of total retail sales. Citi said the retailer was expected to maintain its strategy of matching or offering the lowest price in the market.
“This could spark a response from incumbent retailers who are intent on not being beaten by Amazon on price during the key pre-Christmas sales event,” it said. “In our view, lower pricing will likely be the result of Amazon’s lower margin and [return on investment] expectations, particularly in the short term.”
According to industry website Channel News, Amazon is planning to kick off its Australian assault by offering product at zero per cent margin as a marketing exercise, most likely until the New Year, with a target margin of 15 per cent going forward.
The news comes as the US site faces questions about a number of dubious and possibly even illegal health products being offered by Marketplace sellers — including literal “snake oil” — which have been criticised for “dangerously misleading” claims.
Amazon did not respond to requests for comment.
Originally published as ‘Let’s make history!’: Amazon tells Australian sellers to get ready for Thursday test launch