Amazon has officially landed in Australia. While initially there may be some trepidation for local businesses, it is possible that Amazon Australia will provide significant growth opportunities for all Australian small and large businesses. There are several options available for local businesses to take advantage of the perks of using Amazon for selling consumer goods worldwide.
While Amazon is new to Australia, it is a company with both longevity and proven results. Founded in 1994 by Jeff Bezos, the company started out selling books, however in the years to come the business exploded and now sells everything from books to clothing, furniture and groceries. Consumers can browse several sellers and categories of shopping with the click of a button, filling their cart and checking out in a matter of minutes.
Using Amazon Australia as a selling option for your goods allows you one more lucrative way to reach consumers. One of the most important things to remember is that Amazon does not have to replace your store location or your ability to sell products on your own website. All businesses can always retain the option of using their personally designed website for selling the bulk of their goods to the buyer. However, the use of Amazon’s two selling plans can create a new way to increase sales and reach more consumers quickly and efficiently.
Before deciding if you want to participate as an Amazon seller it is important to know the basic workings of having an account with Amazon Marketplace;
- There is a fee for an Amazon Marketplace account. Be sure to review the monthly fee and determine if the fee is worth the amount of goods you will be selling.
- Keep in mind that pricing is a very competitive event on Amazon. Consider ways to make your pricing more attractive than other buyers by offering incentives for purchases.
- Unique products can be more attractive and sell quickly and in greater quantity. Therefore, consider what makes your product unique and market to that particular feature.
- Be sure to link all of your eCommerce options together so that your product can be found in a variety of ways.
Treat you online customers with the same attentiveness and courtesy that you treat your in-store customers. Have a way for online customers to contact you directly, be available to answer questions by phone or by email, and be as fair and generous with returns and exchanges as you would for your local consumers.
The first option for selling in the Amazon Marketplace is for the retailer to use Amazon to advertise their product but to maintain control over filling and shipping the orders. As such, the seller remains the overseer of the product selection, tracking, delivery and returns. All costs associated with these business steps remain with the seller and can be passed on to the buyer as the seller chooses.
The second option for selling on Amazon Marketplace is called FBA – Filled by Amazon. In this case the merchant will supply an Amazon warehouse with the goods that they sell and the orders will go directly to the warehouse to be filled and shipped. There are additional costs associated with this method, so the use must be thoroughly investigated by the business owner. However, there are some perks with this option;
- Amazon is responsible for the order being filled and shipped. It is also responsible for any returns.
- Using this method allows for shoppers to use their Amazon Prime membership to redeem their shipping benefits which allows for products to be shipped quicker and with no shipping charges to the buyer.
- All customer service issues remain with Amazon.
Finally, there is one change that all Australian business owners should be aware of when selling on Amazon. It is now recommended that all business secure a GST for selling goods via Amazon. In the past this was not necessary. However, as of late, Amazon has announced that Australian sellers without a GST will pay 10% GST if they are not already registered for a GST.
To comply, you will need to take the following steps:
- Provide your ABN (Australian Business Number) to Amazon
- Register with the Australian Tax Office for GST
By taking these two steps Australian sellers will avoid paying an additional 10% fee over and above the 15% fee already charged to all Amazon merchants. For more information, it is important that you contact your local tax agencies for updates and changes to these regulations.
Selling in the Amazon Marketplace might initially seem overwhelming, however after careful consideration of all of the possible advantages, business owners might find the new opportunity both lucrative and exciting for their business growth.
In the event that you find yourself in need of assistance with becoming part of the Amazon Marketplace, please contact the Sydney business lawyers of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.