IRCE – Amazon in Australia, Aaron Chidley – Account Director

article_img_post_Irce-Retailer-conferenceI was lucky enough to be on holiday (or vacation if you’re from the states) in America for the 3 weeks leading up to IRCE 2017. Throughout that time I spotted loads of people walking around with their Amazon Prime boxes and noticed a bunch of Amazon parcels left at front door steps. While chatting to the countless Americans in bars and at the IRCE conference, all but a few could believe that “Australia doesn’t have Amazon?”

If you didn’t know that Amazon was soon to land in Australia, you must have had your head in the sand. Balance Internet’s retailers have been talking to us about what it means for them and so I took it upon myself to learn “all things Amazon” on day one of IRCE.

It’s going to be exciting, interesting and for some of us daunting to see how Amazon rolls into Australia, we’re all keen to see how much of what they’re doing in the USA will come over to us.

The “Amazon + Me track” on day one of IRCE consisted of 11 sessions covering all aspects of the Amazon marketplace.

The Amazon track covered:

  • Amazon & Me Workshop
  • Foundation: Amazon’s Catalog – Get Your Listings in Gear
  • Selling on Amazon a Third Party or First Party – or Both?
  • Fulfillment By Amazon: The How. The When – and The If
  • Analyzing Your Amazon Data for Brands
  • Marketing on Amazon for Brands and Retailers
  • Mining Amazon for Sourcing and New Product Ideas
  • Amazon 2017 and Beyond
  • What makes Amazon’s B2B Site So Good
  • Amazon Snapshot: Where It’s Heading and What You Need to Know
  • Advertising on Amazon: How to implement a Large-Scale Ad Strategy on the Amazon Marketplace
  • With so much content, it’s hard to pick what to focus on.

Here are some impressive highlights….

The stats:

  • There’s over 300 million amazon.com users
  • Last year (2016) Amazon was a $220B  retailer
  • Last year 53% of ALL sales made online were done via Amazon while all other retailers equated to 47%
  • 55% of US shoppers will start a product search online at Amazon, 28% go to search engines, 16% with a retailer website
  • eCommerce sales grow at 15% – Amazon grew at 25% YOY last year
  • 25% of Americans can get same day delivery
  • A new fulfillment centre is announced each month

When we consider how Australian retailers will take advantage of the Amazon channel, it’s obvious that there will need to be some decisions made on how they will sell to Amazon or how they will sell to Amazon’s customers.

I sat in on sessions targeted at 1P & 3P retailers:

  • 1P retailer: Sell first-party, wholesale, directly to Amazon Retail, using the Vendor Central interface.
  • 3P retailer: Sell third-party to consumers through the Amazon marketplace, using the Seller Central interface (whether the brand sets up its own 3P seller account, or works with partner 3P sellers focused on the brand).

Understanding the wholesale/fulfillment model is one thing, getting your products into Amazon correctly is another.

Any retailer who thinks they can dump their existing eCommerce product catalog into Amazon and be done with it (like some do with eBay) will miss out on leading the Amazon channel. If you’re a retailer who’s competing with others on Amazon you will need to pay attention on how to “win the buy box”.

For example if there are five retailers all selling the same fridge, Amazon will list one fridge and one retailer will be selected as the one who “owns the buy box”. Put simply, it’s the retailer that Amazon thinks will give the best experience to its customers. Things like price, customer ratings, shipping times and how your product data is displayed all have an impact on winning the buy box.

While important aspects like ensuring your product  bullet points are well tuned, using images to your advantage took a back seat to the most mentioned thing to aim for. “Make sure you’re an Amazon Prime retailer“. If Amazon comes to Aus with Prime, I’m in!

Pricing is a whole different game with automated tools providing the solution for those who compete, with the term “The vicious cycle” being mentioned by numerous speakers. The cycle where each retailer takes the price down until Amazon negotiates its own wholesale agreement and can afford to take the price all the way to the bottom thus reducing profits and competition for everyone… except Amazon!

With so much content my key takeaway is that the Amazon marketplace is most definitely dominated by specialists. After 11 sessions I know considerably more but by no means am I an expert..

Recommendation:

It is recommended to use listing/integration agents….

Channeladvisor are the ninjas at this, as they’re Amazon’s biggest partner globally. They have the runs on the board to prove they are the big players in this game! Let’s hope their Australian team can keep up with their US counterparts.

Want to learn about marketplaces globally? Talk to us at Balance Internet

By: Aaron Chidley
Account Director – Balance Internet

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