Why Amazon is up against it in Australia

Amazon will find it tough being all things to all people in Australia. That’s what they seem to be doing, based on the goods on offer.

A shopper logs on to the Amazon Australia site. Photo: Getty Images

Amazon are going to find it tough being all things to all people in Australia. That’s what they seem to be doing, based on the goods they have on offer.

Amazon Australia’s retail offering went online overnight and I lodged my first order after 6am on Tuesday.

Amazon offers you free delivery if you buy $49 or more worth of goods, and given this was in my mind, I felt under pressure to buy that much. It’s not like nicking across the road to buy a can of baked beans from the local general store, at least for household items.

This purchase was to test Amazon’s system, so I chose a series of goods I’ll need soon: two 1kg plastic containers of Finish dishwashing powder ($8.80 each), two 250ml bottles of Dettol liquid hand wash ($2.45 each), one box of Kleenex soft pack tissues (7x60 sheets — $7.70), two 160g tubes of Colgate original mint toothpaste ($3.69 each) and one 500ml container of Finish rinse aid ($7.85). The invoice included the GST payable.

If nothing else, I would be squeaky clean from this Amazon order.

I live in inner Sydney and I’ve been promised delivery from December 8 to 14. We shall see.

Amazon did, however, tell me that a bottle of Dettol Health Clean Kitchen antibacterial spray ($3.50) would take longer to provide.

I also bought a packet of 20 replacement brush heads for my Oral B Toothbrush ($9.99), but because this is offered by a merchant and not Amazon directly, it won’t arrive until December 20 at the earliest. It could arrive as late as January 10. There’s no inkling of a two-hour option here.

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Update: Amazon dispatched the first package at 4.16pm Tuesday afternoon, and a separate third-party order was dispatched at 12.39am Wednesday morning. The first package arrived here at The Australian Wednesday at 8:20am. I got the goods obtained through the Melbourne warehouse in just over 24 hours. That’s impressive given that free postage usually means a minimum of three days delivery. Well done Amazon. But Amazon had used a courier service, Fastway Couriers, for my delivery rather than Australia Post which says it is doing the bulk of Amazon deliveries. If this isn’t the typical delivery mode to the public at large in inner Sydney, it defeats part of the reason for this test order in the first place. If you have placed and received orders from Amazon, please let me know your delivery times.

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Despite Amazon hyping up the launch, saying that millions of items are available at launch, the offerings in many categories are sparse. Sure, it’s early days and we can hopefully expect the ranges to flesh out in the next months. But that in itself will still see me going elsewhere, for now.

Second, many items are not so cheap, although some are. Amazon bettered Woolworths on some of this basic household fare. I didn’t want to rip myself off so that’s why I chose those items.

Chris Griffith's order from Amazon today.

But when making comparisons with some electronics purchases, Amazon was not the cheapest. A Senheiser PXC-550 headset costs $389.87 from Amazon, Selby sells it for $378. A 128GB iPhone 7 costs $1085, that’s significantly more than buying it from Apple — $999. A 128GB Sandisk memory card costs $328 from Camera Warehouse. From Amazon it costs $399.95.

In some areas, Amazon won’t be a port of call at all, not even if the prices improve. For example, I never buy shoes online because I really need to try any pair that I buy. A large shoe market one kilometre from home does the job well.

I might be tempted to buy chairs online one day, but never a couch because I need to sit in a couch to see if I can bear it. I like them upright rather than layback and need to sit in them to check them out.

For computer parts, I head online to the likes of MSY (despite its dust-ups with the ACCC), IJK or physically turn up at Capitol Square near Chinatown here in Sydney. Between them they have everything I need at cheap prices — a huge variety in comparison to what Amazon offers.

For pharmaceuticals, I usually head to Chemist Warehouse by foot or go online. Again, the range there is much bigger.

For household goods, I usually visit Ikea which recently sold me six champagne glasses for $1, on special.

That’s where Amazon will find it tough being all things to all people.

One of Chris Griffith's items will take a little longer to be delivered.

We all have our haunts, so for Amazon to compete, they have to offer better value and a wider range in each and every one of these.

I’m not the only one who thinks this. CitiResearch has described Amazon’s range as “patchy across and within categories”.

“For example, over 40,000 toys and games are available from a large range of brands, while televisions are not yet available,” the CitiResearch report said.

“Third party sellers are providing the bulk of the range, as is the case in other markets.

“Due to lack of distribution infrastructure, these third party sellers are currently undertaking fulfilment which lengthens the delivery speed.

“Amazon has launched its private label range (Amazon Basics) with 234 SKUs across electronics, clothing, footwear, sports and outdoors. No food and beverage products are offered at launch, as expected.”

Delivery by January 10, 2018?

CitiResearch found that Amazon 1P was cheaper, on average, across the headphones and toys categories surveyed.

“For example, in headphones, Amazon’s 1P supplier Sennheiser is 10 per cent cheaper than peers, while third party pricing is typically in-line and in some cases above retailer prices at this stage.

“Marketplace pricing is dynamic however, and will respond to Amazon’s algorithms, which will evolve over time.”

Meanwhile, Australia Post confirmed it was the primary delivery partner for Amazon in Australia. But that equates to a quoted 3 days minimum delivery time for Amazon’s free delivery.

Amazon yesterday told The Australian it was using several partners for its delivery but wouldn’t say who.

“We’re proud to have been working with Amazon since 2014 and we share their vision of putting choice, convenience and a great customer experience at the centre of everything we do,” Australia Post Group Chief Operations Officer Bob Black said.

“We’ve already seen local retailers experience significant growth driven by online shopping festivals including Click Frenzy and Black Friday, and we expect this demand to continue right up until Christmas.”

Australia Post said it had hired 2000 additional workers in its parcel processing facilities and 100 extra staff in its call centres in Melbourne and Brisbane to help manage the busy Christmas period.