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Amazon in Australia doesn't spell doom for SMEs
It’s the announcement that’s had Australian retail businesses on the edge of their seats ever since April this year: Amazon is here.
The company’s much-hyped launch in Australia has long caused concern among large-format retailers, who argue that local jobs and bricks-and-mortar stores are on the line. But there’s potential for exciting times ahead when it comes to small and medium enterprises (SME’s), who make up 97.5 percent of the country’s actively trading businesses.
How will Amazon in Australia work with small business?
Amazon Marketplace, the company’s third-party e-commerce platform, allows retailers to list and sell their own products alongside Amazon’s brands. The platform means small businesses can take advantage of the company’s systems, technology and profile in return for a percentage of sale prices. Given Amazon’s international power, which comes down to both size and their attention to detail when it comes to shopper experience, there are understandably many businesses here desperate to jump on board.
Jessie Goh owns Summer Lane, a gifts and homewares business based out of Marrickville in Sydney’s Inner West. Goh operates both physical and online stores, but expects to see the bulk of her sales growth across online platforms in the next few years. A big part of this plan hinges on Amazon, where Summer Lane has been selected as one of the first wave of Amazon Marketplace sellers to go live with the launch. She says independent businesses will be missing out if they don’t embrace Amazon’s arrival, and sees huge growth opportunities for those who are able to harness the sales platform’s power.
Goh says “Amazon will always be 10 or 20 steps ahead of everyone else because they basically own e-commerce around the world.
“To have the sort of knowledge, technology and data Amazon gets access to presents us with great benefits.”
The Marketplace platform currently accounts for more than half of Amazon’s output around the world, so it’s a revenue stream the company continues to nurture and improve for both sellers and shoppers.
In future, Australian sellers will have the option of using Amazon to receive and hold stock, and fulfil orders via their distribution centres. Currently, the only operational warehouse is in Melbourne, although it’s been reported the company has also bought or signed leases for several properties in Western Sydney.
Gina El Mohamad runs Mumdy, an online party hire and kids’ products store, and plans on using Amazon’s distribution services to kick off a new arm of her business.
She says, “I’ll be importing large quantities of a popular kids product and using the Amazon fulfilment centre to manage all the sales, handling and distribution”. She says if she had to import, warehouse and sell the items herself, the volume she could sell direct from her website wouldn’t justify the large investment in products. Leveraging Amazon’s physical facilities will be a huge boon and she hopes her business will create jobs in the fulfilment centre.
Amazon Australia partners with local business
El Mohamad says, “I see Amazon almost like a silent business partner, one who’s giving the marketing side of your business a boost.”
She hopes selling with the company will mean they take care of the advertising and marketing side of things so she can focus on sourcing and managing her product range.
Nicoleta Stephens Vasilache is the owner of Keepsakes by Nicoleta, where she designs and creates custom-made products from sentimental clothing or artefacts. She is planning to partner with the platform to promote a complementary range of boutique ready-made products in the form of keepsake gift hampers.
She says, “My target market for these is different to my other products and I need to market them so they can be promoted to the right customers, who Amazon will give me access to.
“It’s going to be very interesting to see how the Australian market will react to Amazon, and it will certainly make things more competitive.”
Amazon Australia jobs growth predicted
Samia El-Dorgham is the owner of Bub Hut, a fledgeling business offering affordable boutique clothing for babies and children. Her business model hinges on being able to get products to customers quickly. She believes using Amazon to sell means she’ll be contributing to jobs growth even if she doesn’t have the capacity to directly employ someone.
She says, “I absolutely think Amazon will benefit retail recruitment which wasn’t there before, and I hope to use their distribution facilities and staff.”
Goh says jobs will be created around Australia as small businesses expand their reach and grow through the platform. She currently employs one permanent staff member and will be looking to add to her workforce as orders increase through Amazon.
She says, “I’m just waiting for Amazon to flip the switch, and I’m ready to go on growth and staffing.”
El Mohamad, who’s modelling a whole new product range around Amazon’s future Australian fulfilment centres, hopes to remain a one-woman business while contributing to Amazon’s overall employment of local workers.
She says, “It’s the best of both worlds really, I get to be around more for my kids but I also get to grow and indirectly employ people.”
Better delivery options, happier customers, bigger business
Amazon will shake up distribution and logistics channels in Australia, and not before time.
Goh has long been frustrated that products shipped around Australia can take weeks to arrive at their destinations when products coming from overseas reach customers sometimes in a few days.
She says, “I really hope they will clean up the logistics and courier services industries in Australia.”
The sentiment is echoed by El-Dorgham, whose biggest issue is slow delivery times.
She says, “If my delivery times are slow that impacts on how happy my customers are, and they won’t come back.
“I want to build a business on repeat customers, and their priority is fast shipping, so I hope Amazon will be able to help me overcome that challenge.
“Maybe I can compete with bigger, faster companies if I can utilise that huge network Amazon wants to offer.”
If you’d like to understand more about SME growth and the e-commerce landscape in Australia, contact one of our recruitment specialists today.