Amazon FBA Launches in Australia, “World Class” Logistics For Marketplace Sellers

Amazon Australia has pushed into second gear, by announcing the launch of its Fulfilment by Amazon (FBA) services for companies selling on its Australian e-commerce website.

Fulfilment by Amazon allows local third-party businesses to utilise Amazon’s “world class” logistics services – including warehouse and distribution network, plus customer service provisions – for a ‘small’ fee.

From Tuesday, sellers can store inventory at Amazon’s 24,000 square meter Dandenong South warehouse, and have orders packed and shipped by Amazon personnel. Its customer service team can also handle order returns.

As an “introductory promotion”, Amazon is giving local sellers free storage and removals when enabled in March, all the way through to the 31st of August 2018 [volume limits and other conditions apply]. Sellers can obtain more information here.

Head of FBA in Australia, Amit Mahto, affirms Amazon’s FBA service provides small to medium sized businesses with logistics functions normally only reserved for larger organisations:

“Size doesn’t matter in the digital economy and Amazon Marketplace helps to level the playing field when it comes to starting or growing a business”

“We are focused on helping Australian businesses of all sizes succeed by inventing on their behalf and making our technology available to them and FBA is a fantastic example of this”

“Customers shopping on amazon.com.au will be able to access an ever growing and more unique range of products accompanied by the convenience of fast delivery and Amazon’s world-class customer service”.

Fulfilment by Amazon will cost local sellers from $1.76 to fulfil orders which can fit in a small envelope, $7.76 for items up to 3kg, and up to $25.48 for orders up to 30kg,

As a matter of comparison, for orders up to 3kg Australia Post charges a $8.50 shipping fee.

For storage, sellers will be charged $19.40 per cubic meter, however, this rate will jump to $26.50 per square meter during the peak period of October – December.

In addition to such costs, local sellers incur a $49.95 monthly fee to sell on Amazon’s e-commerce website, and also pass back between 6% – 15% of sales [based on category] to Amazon.

Amazon states there is no minimum number of units a business needs to reach, in order to participate in FBA.

For Australian consumers, FBA will give customers free shipping for orders over $49, and other shipping options including Amazon’s one-day delivery service.

Kevin Lippy, Founder of Sydney-based baby brand Hip Cub claims Amazon’s FBA service has enabled his business to concentrate on their strengths, and leave logistics to Amazon:

“Fulfilment by Amazon really changed the game for us, and we’re thrilled it is now launching in Australia. FBA has allowed us to concentrate on the things we’re good at such as digital marketing and product development, leaving the logistics such as packing and delivery to Amazon”.

Amazon states that in 2017, over 140,000 SMEs notched over $100,000 in sales on its e-commerce website. The e-commerce giant claims 50% of its total units comes from Amazon Marketplace sellers.

Amazon previously announced it intends to launch its premium subscription based service, Amazon Prime, by the middle of this year – providing consumers with a suite of additional privileges, including expedited delivery.