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EXCLUSIVE: Amazon Tipped To Enter OZ Market With ‘0’ Margin Strategy

On Monday giant US Company Amazon will kick off their assault on the Australian market with a summit for 500 suppliers and partners.

It is understood merchants will be told by the company’s Australian chief Rocco Braeuniger that Amazon will be operational in time for this Christmas season.

Amazon’s head of seller services for Australia, Fabio Bertola, will detail how the local Amazon platform will operate.

Right now, the US Company is desperate to secure stock in Country to sell, ChannelNews has been told that the giant online retailer will kick off their assault of the Australian market that is tipped for 22nd of November by offering product at zero margin.

According to insiders Amazon is looking to operate in the Australian market going forward based on a margin of 15%. The 0% strategy will most probably run into the New Year and will be used as a marketing exercise to generate interest in their offerings.

Currently Amazon is generating over one billion in revenue from the Australian market. According to sources they believe that they can double this “quickly” in 2018.

According to sources their analytic teams have identified that their current Australian customer base is paying an average of $27 in freight to ship goods from the USA, they believe that they can get this freight cost down significantly when they launch locally.

ChannelNews has been told that a large percentage of the stock that will go on sale initially is none consumer electronics or appliances. This week several US executives landed in Australia as part of the roll out of Amazon.

A key element of Amazon’s marketing is content in a SKU similar to what Webcollage is delivering for Australian retailers. (4Square Media is the Australian distributor of the Webcollage engine).

Content generated via the use of Webcollage content tools is also used in Amazon SKU’s.

Prateek Ranjan, Amazon’s Seattle-based head of head of marketing and international expansion is one of the executives who is now co-ordinating Australian marketing activities.

Mr Ranjan was previously the head of Amazon Fashion, and is now responsible for “expanding Amazon’s footprint in new countries across the globe”.

Another person who is now in country is Amazon’s global production manager Nickole Brown he is currently undertaking one of the biggest series of product shoots ever undertaken in Australia.

The team includes Amazon’s India-based production shoot manager Anisha Bhardwaj, who put out a request on LinkedIn for “E-commerce Product and On-body Photographers, Stylists and makeup artists based out of Melbourne” three weeks ago.

“I have never seen anything like this in Australia,” said a member of Amazon’s Australian operations.

“I have seen major shoots for the big department stores, but nothing to this scale. Three shoots per day is unheard of, let alone every day of the week.”

“With Amazon’s quick turnaround, they will be operational in the online fashion market in Australia by early December people have been told.

One market that is set to be shook up is the house brand market with Amazon set to launch the AmazonBasics, which sell mass market products covering everything from electronics to kitchenware.

The Amazon offering is set to hurt the likes of Aldi, Big W, K Mart, Target and Bunnings who still don’t have an online selling operation in Australia.

Another group set to be targeted are Mr Vitamins and Chemist warehouse with Amazon set to launch online sales of their Elements vitamins and supplements brand.

Other brands set to be launched include Happy Belly and Wickedly Prime, and the sweets and chocolate brand Surprise.

Mama Bear, Amazon’s range of baby products including nappies and infant food, has also been registered.

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