Changes in Amazon Australia
At the start of this week Amazon Australia announced Fulfillment by Amazon (FBA) is officially launched.
(Quick side note: if you don’t know the difference, Amazon offers FBA or FBM and they are totally different for you as a seller and the customer. To be a top Amazon seller, you must use FBA)
FBM or Fulfillment by Merchant is where the sellers ship out their product via their own warehouse or 3rd party provider. (similar to eBay)
Fulfillment by Amazon (FBA) is where Amazon has stock in their warehouse and ships it out (an awesome business model for Amazon, sellers and customer)
FBA launched last week in Australia and it’s a game changer for e-commerce in Australia.
Why Amazon encourages using FBA
Amazon encourages sellers to use FBA as they have control over the supply chain and customer experience so know they can deliver a certain level of quality (and they also put FBA sellers way above FBM in the rankings)
FBA products are shipped out faster, tracked in real time and Amazon looks after the majority of customer service inquiries.
How FBA works for you:
- Prime Accounts – Spend over $49 and the customer gets free shipping (Prime customers also get their orders faster)
- Storing products on Amazon – if you wanted to dropship your products it’s only $7.80 if less than 3 kg (that is actually cheaper than sending it via Australia Post!!!)
Exiting News about CoachAMZ, Amazon FBA Expert
On April 19 I’m speaking at an Amazon Business conference in Sydney
If you would like to know more about the event, drop me a note at firstname.lastname@example.org.
OUTLINE OF THE EPISODE
[00:29] Changes in Amazon Australia
[04:40] Why Amazon encourages using FBA
[06:30] Using FBA
[10:50] Exiting News
CoachAMZ is an Amazon FBA expert. If you are expanding your business, want to launch on Amazon, just work with a trusted partner to sky rocket your Amazon sales, and wondering how to sell on Amazon Australia, then please contact us to see how we can help
Listen to Our Podcast and make your Amazon Sales Shine
****** Full Podcast Transcription below *******
Today, we are going to talk all things Amazon internationally and here in Australia, and for Amazon Australia this week to let you know How to Sell on Amazon Australia. One of the biggest changes occurred since Amazon launch Amazon FBA Fulfilled by Amazon released at the start of this week so in February. And it’s an absolute game changer.
I briefly touched on this on the last article but today I want to talk more about why Fulfillment by Amazon and why Amazon Seller Consulting Services is on top and is such a game changer not just for sale on Amazon but for e-commerce. And even people who don’t do e-commerce in terms of offline businesses the opportunities that are ahead now for those who don’t know with Amazon in Australia can do fulfillment by merchant which means you have a listing and the Amazon Product Listing Optimization up a website if someone buys it you get an order confirmation and you dispatch it from either your own warehouse or your own home or you drop ship it, that’s called fulfillment by merchant.
There’s also in America there’s vendor central where actually you sell your product to Amazon. They control the listing they send everything out you don’t touch it you just give them back. They just buy a few on a quarterly monthly basis. But the second one is welcome to Australia’s FBA Fulfillment by Amazon and meet the best Amazon FBA Expert.
Now this is what changed sales for e-commerce providers not just in the US but really around the world. It took the limitation of something like eBay is that you have your listing there but one limitation is no one simply stores it so the customer service delivers it there’s wide fluctuations so if you bought something on eBay. There’s no guarantee that it will be sent out that day. Maybe send out two days three days, four days, five days later no guarantee of tracking the delivery is not the same.
So, you go back seven or eight years, Amazon put in new price for fulfillment by Amazon where they are building these massive warehouses and this sudden the US said to the world if you’d like to store your product in our warehouse then would take care of the shipping. The Amazon Seller Consulting Services logistics all types of things and that really changed it because it meant people who were doing a small business on the side maybe selling 1 2 or 3 products could now really scale their business on a much larger scale.
If you’re doing 150 or 250 units a day you’d pretty much need a warehouse or a full-time staff member or members just to fulfill that many orders. But now with Amazon Seller Consulting Services you can scale your business as fast as you can so your product and get capital to fulfill it. So, what that means if you’re selling a 200 product a day Amazon is the one who use their little robots or people will go around and actually fulfill it and send it out, and they benefit from that as well.
My commission, in Australia it’s forecasted between six and 15-16 percent in the US it can go higher than that but that’s their commissioner saying look guys we’re holding your listing we’re fulfilling it for you. Here’s our commission plus they charged picking and pack fee which is normally a few bucks. And then on top of that there is a storage costs as long as you’re moving through quickly and you’re avoiding long storage cost it’s very economical.
So that’s why when it’s come to Australia it’s really changed the business model for people to small business. Maybe they’re running out of their garage or even a small warehouse and they were filling out orders maybe doing 10,20,30 a day. You can sort of manage that in a one-man band. But if you really want to scale to a much larger one you have to have larger premises or a different way for filling. And that’s why Amazon is changing this.
In Australia there’s not a lot performer on, came of third party dropped shippers so if you actually want to have e-commerce site and have a centralized warehouse to send it. There are a few players but there weren’t very economical and, if you compared that to Amazon, they are amazingly good value for storing your product and selling it with great Amazon Seller Consulting Services even to the extent where we work with customers in US. And we’ve actually taken their warehouse where they store their products and moved it on to Amazon.
If you think about if you’re paying Amazon yes you pay them a fee small fee for storage and selling it but that means you remove your rent your employee overheads the potential errors with things going wrong the customer service with tracking orders you can remove all that. We actually work with businesses in the US where we’ve moved their fulfillment and storage off their own warehouse and into Amazon.
So that’s one of the actual benefits of Amazon FBA Expert because it lets you scale but also the other benefit is Amazon really encourages Fulfillment by Amazon. The reason I encourage it is Amazon has a view that they want to own the customer experience and want to know it’s a great comes experience end to end and put the customer first.
They had a process where they know the product is in their warehouse. They can ship out that next day they can track it they can provide updates to the customer. That’s a much better experience with Amazon Seller Consulting Services than depending on other seller to maybe have their garage maybe send out two days later not have that support and tracking.
So Amazon said well this will give us a really good customer service we’ll see benefits we’ll get a commission on it but at the same time if you’re Amazon FBA Expert you’ll go much higher in the listings. I don’t think I’ve ever seen best seller. Amazon’s choice whose fulfillment by merchant. It makes sense because Amazon saying if we push all the best products to customers and put them in the top of the best real state on the page well we want to make sure that’s fulfilled by Amazon so we will make sure there’s plenty of stock.
We want to make sure we end the supply chain. We want to make sure that we own the logistics the customer service they want to be able to control that. So, if you want to be on Amazon and sell a product if you’re serious about it you have to move to FBA. When it was on launch in Australia late last year there was no FBA except for Amazon basics which are the products they own.
You’ve set up a product it would be fulfilled by merchant which was okay but it doesn’t really let you sell your business you still sell the same model having a warehouse a garage we sell your products. Now at this time in February Amazon has expanded to all the ranges. I saw the list the other day in terms of the category so still early it’s daylight pets and vitamins have been launched but there’s still the opportunity now moving to FBA.
So, I will just run you through some steps with FBA in terms of how will benefit being on FBA and according to our Amazon FBA Expert the first thing is the prime account. So, if you send your product into FBA, if someone orders product in Amazon on the totals over forty-nine dollars they’ll get free shipping. So that already encourages people to byname as Amazon as you spin 49 bucks. When your products in there it’s free shipping. So, the customer will love it. And also, if you’re a Prime member then you actually get next day delivery.
It’s even faster it’s almost like Express Post and free if it’s over forty-nine dollars so that’s pretty cool. The monthly fee they charge you 50 bucks a month to have the Amazon account and the commissions are going to be between five and six and about 15 to 16 percent in terms of the commissions. Amazon will take Parcel on FBA and the other one is if you want to store your product on Amazon and actually fulfill it so maybe get a sale through eBay channel or something like that.
If the products under 3 kilos It’s around seven dollars eighty to send it that’s cheaper than express post and most couriers and that’s throughout Australia. So, I can already see the impact this is going to have to logistics in courier companies’ products of that size around Australia I don’t know any courier company that can match that outside of local metro area.
If you’d like just local metro Sydney can matches prices but outside of sort of capital city that’s a bargain of a price. So, Amazon has definitely stepped up by moving to FBA as by the Amazon Seller Consulting Services and I was really surprised to happen this soon. When I was speaking on Amazon late last year seemed like it’s going to be mid to late this year for that to even happen.
So, it really shows you how quickly Amazon is moving and to do this they need to expand their warehouses they need warehouses they’ve got one Dandenong but most like big spenders one somewhere in Sydney maybe potential up in Queensland just to cover the geographic areas. So, by Amazon opening up FBA it is really going to be a game change in terms of sales and Amazon sales in Australian Amazon that will be a good deal in order to know How to Sell on Amazon Australia.
So, if you’ve been looking at How to Sell on Amazon Australia it’s probably now starting to have a look at it. If I was advising where to start I still say go to United States first. It’s a much bigger market but if you’ve really got established product here definitely say transition’s and these products to FBA and you’ll start seeing the results and it also an awesome opportunity you are getting now before the competitors come in.
Also, proved to be the best trick by Amazon FBA Expert I know that customers in the UK and US are already looking at Australian now it’s opening up and they will just be transitioned their products in over time. So having it on their earnings like in some reviews that’s really powerful because Amazon reviews and they love high converting sites. And I was just testing this recently with a new launch in terms of a product.
So one of the things that definitely helps convert with customers is obviously the images but also the number of reviews so even if you’re the top of Amazon and this is a bit off topic but it was just an interesting insight even if you are the top of Amazon and so the products $28 here are similar product and is $1 or $2 cheaper but the computer has 500 reviews and you’ve only got 15 then it’s very rare that some will go to you to save one or two bucks because your views are lower.
But if you substantially drop your price maybe down to 20 dollars and it’s very similar you’ve got maybe 50 reviews they’ll very quickly spike your sales and your opportunity to get your reviews up and then once your reviews are higher things start increasing your price to match your competition. Now the reason I say that is because if you’re Amazon Australian now there’s not that competition so there’s not these other reviews that makes it hard to compete.
So, it’s a really good time to start looking at Amazon Australia with the Amazon Seller Consulting Services. Now the FBA has opened up if your categories are already open fantastic get on there. If you’re just starting out on Amazon I’d still recommend look at the US market. It’s so much bigger. The sales are not comparable to other marketplaces even if you compare the U.K. or Canada the US is the marketplace just because there’s so much volume and sales. So, guys it’s really exciting news at Amazon FBA has opened in Australia.
It will be a game changer and the sales for now up to lead up to Christmas will be significantly higher than Amazon and it is also an awesome opportunity to look at an option in terms of your freight and logistics even if you’re a larger company or start considering that you need some help with that. Amazon FBA Expert can do the analysis to show that the cost benefit analysis to whether you stay or move it or whether you want a trial and also some exciting news on a separate note that in April I’ll be speaking at a business conference in Sydney about Amazon Australia.
I won’t release the names of that yet but it’s pretty exciting if he gets a free ticket to it then drop me a note at email@example.com if you listen to this later the year that’s April 2018. So it’s pretty exciting it’s all about helping businesses in Australia on Amazon and really excited be able to help the business community and entrepreneurs in general.
So, guys hope you can got some value about this is a pretty important week in Amazon Australia with Amazon FBA coming. If you got some value from this article. We’d love you go across iTunes leave us a five-star review. If it was great. It really helps spread our word and help businesses.
At CoachAMZ were a help about businesses exceeding on Amazon with Amazon Seller Consulting Services helping individuals launch businesses and become entrepreneurs. And if we can help you in that space then we’d love to help you.
Good luck! Remember to take action and have fun along the way.