It’s On, Amazon Cut Deals With Distributors, As Harvey Norman & JB HI Fi Look To Build Out Online Marketplaces
The battle between Australian retailers and Amazon, is set to get intense, with several distributors telling ChannelNews that they have already been approached by Amazon to supply stock.
At the same time both Harvey Norman and JB Hi Fi are talking to distributors with a view to opening online marketplace stores like the ones that Amazon operate globally, these will go live before Amazon officially launch their Australian operation.
One major distributor told ChannelNews that Harvey Norman has asked them to “dropship” goods within two hours or “even earlier” when an order being placed. Another retailer said that he has recently rejected two takeover offers for his business.
ChannelNews has also confirmed that apart from using Australia Post Amazon has cut a deal with Uber whereby, Uber drivers who in some cases are already carrying a passenger, can pick up a product from a distributors warehouse and delivery it near to where their fare is going.
This allows Uber drivers to earn additional money while keeping the cost of delivery down for Amazon.
We have also been told that Amazon is also talking to distributors about “sponsored search” on the Amazon marketplace web site.
Sponsored products uses targeted ads to give distributors more control over product merchandising on Amazon.com by boosting the visibility of their products when shoppers search for keywords.
Distributors and vendors operating their own Amazon marketplace, only pay a fee for this service when an Amazon shopper clicks the Amazon content to go to the detail page where a product offer is listed.
One distributor who does not want to be named said “This is a win win situation for distributors. In the future, we will be able to sell in the Amazon marketplace, a retailer’s marketplace and in store.
Australian retailers are going to have to match the Amazon margins if they want to attract consumers to their marketplace stores”.
Credit Suisse believes that, depending on Amazon’s impact, Harvey Norman’s earnings could fall between 3 and 9 per cent, at the same time Citigroup claims the retailer’s profits could fall 19 per cent.
During the past 18 months Amazon, has registered more than 250 trademark applications across a wide range of retail categories.
They have also leased five floors in the 47-storey Citigroup Tower in Sydney’s Park Street.
They are also recruiting for hundreds of jobs in Australia, including roles in HR, legal and marketing, while at the same time working with property Companies to lock in distribution centre deals.
“If they’re not up and running by September 30 it will be delayed until the following year – they don’t like to disrupt the holiday season,” one fund manager told the Australian Financial Review recently. “Once they advertise for warehouse roles it’s going ahead full force.”