This article was originally published in 2019 and reflects conditions at the time of Amazon's initial Australian market entry.
Amazon's arrival did reshape Australian logistics significantly. If you're a business owner or seller navigating the new landscape, our guide to Amazon FBA and what it means for Australian logistics businesses covers what's changed and where the opportunities lie.
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Amazon searches for its first Australian warehouse
The giant retail firm Amazon is seeking to expand its operations across Australia, announcing plans to set up a fulfilment centre on the eastern coast. The proposed 93,000 square metre warehouse is to be located in either Melbourne, Sydney, or Brisbane. The warehouse will guarantee faster deliveries across the country. It’s a long-anticipated announcement for the company and Australia.
According to Business Insider, this will be Amazon's first Australian fulfilment centre. The company launched its web services in Australia in 2012, followed by the Kindle store in 2013. And as of now, it currently employs approximately 1,000 workers in Australia. A retail offering is now underway. The company’s next plan is bringing a retail chain offering in the country and those plans are underway.
Amazon jobs and investment
The proposed warehouse will generate hundreds of new jobs. Amazon said it is very excited to create new jobs in Australia, bring in investments worth millions of dollars and empower small businesses in the country through the Amazon Marketplace.
The company is optimistic that through focusing on aspects that are of most value to customers such as fast delivery, wide selection, and low prices, it will be able to attract Australian customers. The company expects to introduce services that made it dominate the retail Western Europe, UK and US markets, like delivery within an hour, to the Australian market soon.
Amazon’s threat to Australian retailers
Morgan Stanley analysts have painted Amazon as a “country killer” and warn its retail consumers that although the company might take some time to create and build momentum in Australia, it hangs like Damocles’ sword over corporate Australia. This warning was published prior to Thursday’s announcement in the Australian.
The analysts also stated the country now accounts for around $1 billion of the $300 billion annual retails sales in Australia. The company intends to start is launch with electronics, a move expected to take away some from profits from Harvey Norman and JB Hi-Fi that made annual revenues of $1.8 billion and $3.9 billion respectively during the 2015-2016 financial year.
A tax plan that is designed to assist brick and mortar retailers like Harvey Norman has already been criticised by Amazon, saying that the move to impose a tax on goods and services purchased online was poorly designed such that it might create a rather inherent disincentive for online retail businesses to comply.
The GST debate
Amazon has criticised a proposed tax plan designed to support brick-and-mortar retailers. They argued that imposing GST on goods purchased online is poorly designed.
In a submission to the parliamentary committee overseeing the legislation, Amazon warned that compliant sellers will charge GST while non-compliant overseas vendors will continue shipping parcels at lower prices with little risk of detection. Amazon said this will ultimately push consumers toward less reputable international sellers.
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Amazon's entry into Australia changed the warehousing and logistics landscape permanently. If you're a business looking for Sydney warehousing and distribution or exploring 3PL solutions to stay competitive, Holloway can help.
For the latest news and insights on Australian logistics and warehousing, visit the Holloway Removals and Storage blog.
