Amazon Looking For Local CEO, 2017 Launch Tipped
Amazon.com is looking for an Australian CEO according to several sources with one insider claiming that a key requirement is “an understanding” of the Australian freight industry.
The big US online group is tipped to be setting to launch in Australia next year.
According, to both recruitment and vendor sources, Amazon is currently talking to several potential candidates who have “local expertise”.
Initially it was feared that size of population and Australia’s high shipping costs would deter the US online retailer.
In the US and the UK Amazon offer free home delivery, they are also developing a new “Express” delivery service which in Australia could be delivered by Uber drivers.
What is not known is whether Amazon will launch their $99 annual Prime fee service in Australia a move that could help the come overcome high shipping costs for Prime members.
Currently Amazon is spending heavily to roll out services such as Prime Now, Amazon’s one-to-two-hour delivery offering, which is now in 40 cities world-wide versus 17 a year ago, and could favour last-minute holiday shopping. The service will offer deliveries until midnight Christmas Eve, something the company dubs “procrastinator’s delight.”
Fast, so-called last-mile deliveries for services such as Prime Now are often the most expensive, according to industry experts, as it eliminates the option of filling up a truck with packages and running them along a more efficient route. Instead, drivers with a handful of deliveries drive point-to-point, which adds miles and time.
Amazon advertises on its site that drivers from its Flex program, which relies on citizen couriers to make Prime Now deliveries, can earn up to $25 an hour.
It still charges for some deliveries, as well as collecting the fee for its Prime membership, so shipping revenues for that segment will also increase and help recoup some of those costs.
According to analysts one of the biggest overheads for Amazon in Australia is freight. In the US, the Company spent $3.9 billion on freight in the third quarter, this was up 43% on the prior quarter.
Currently Amazon is trying to drive down those costs and better manage its volume through using its own logistics network and the U.S. Postal Service for more deliveries, he said.
In Australia, it’s not known at this stage as to who Amazon will partner with to deliver freight. ChannelNews understands that the Company has had lengthy discussions with Australia Post who are tipped to be a key partner when Amazon launch in Australia.
“Amazon is a wild card” in its delivery needs, said Ivan Hofmann, a former FedEx executive and transportation-industry consultant. Its volume can fluctuate wildly and can be hard to forecast.