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Print Posted by SMEA Admin Posted on 14/11/2017 in Education

Amazon Launch Event - Roger Dunn

Amazon Launch Event - Roger Dunn

Amazon just landed in Sydney, this is what they told us. Key takeouts & insights from the very first Amazon Seller Summit in Australia

Roger Dunn

Roger Dunn

Today we saw one of Amazon’s first public appearances in Australia, with the inaugural Seller Summit on local soil (well, technically water, on a wharf in Sydney Harbour).

The event focused on the Amazon Marketplace, the platform allowing third party sellers to leverage Amazon’s customers and services, such as FBA (Fulfillment by Amazon logistics) and customer service. Although hosted by the Australian Retailers Association & SME Association of Australia... the content was all from real, live Amazonians.

On stage were keynote speakers Rocco Braeuniger, the Australian Country Manager, and Fabio Bertola, Head of Amazon Marketplace in Australia. They opened the event to a packed hall at Doltone House at Jones Bay Wharf. Although a free event, it was a “sell out” with the 500 ticket allocation exhausted shortly after the announcement of the event. An extra hundred were allowed in, causing a short delay as additional seats were found to accommodate the packed room.

Both keynote presenters were keen to share their Australian credentials, with Rocco having had a working holiday in Australia years before, on a cattle farm and in Sydney just prior to the 2000 Olympics. He was now excited to get things started for Amazon in Australian and confirmed that Amazon will launch with both its retail offering & the Marketplace (i.e. buying directly from suppliers, in addition to enabling local business to sell to Amazon customers themselves) – but today was all about the Marketplace.

He also addressed the elephant in the room within the first few minutes - when will they launch?

The quote was “we’re getting really, really close” which supports the working theory that this will happen in the next few weeks, this confirmation coupled with the timing of this event would suggest a pre-Christmas go live, but we’ll only know fire sure when we see the full offering on www.amazon.com.au. Although Christmas offers a huge opportunity, I doubt they will push the button if it means launching without everything in place and a chance of letting customers down.

He briefly covered some of the better known elements of Amazon’s positioning, from being the everything store, to key elements of the business – retail, tech, logistics, publisher – and their healthy customer obsession. He brought to life this customer focus by providing some insight into their product development process. They work back from the consumer in a very practical way and create a press release for new products well before they are fully developed. They have five requirements for these, including who the customer is, what the new benefit is, what problem it solves, and finally what the customer experience looks like – only once these have been worked through for feasibility, does the product development progress. That said, they also like to move fast and will make a quick decision with 70% of the information, rather than wait (too long) for 100% surety.

He finished off by saying how important it was to earn the trust of Australian customers, both shoppers and vendors, and was committed to providing a huge range, millions of dollars in investment, and thousands of jobs down under.

Fabio Bertola, the Head of Amazon Marketplace was next. He had recently moved from the Winning Group, but had worked at Amazon previously, having launched the store in his home country of Italy. He confirmed that the 3rd party Marketplace would be live from launch, but that this was not necessarily a given – it hadn’t happened in Italy, coming a year later after the retail launch. Unlucky for some… Australia will be the 13th Marketplace to launch globally, following the recent launch in Brazil.

He went on to highlight the benefits of selling on Amazon, the standardised features, technology and processes which will allow Australian business to sell to 185 countries and 300 million customers worldwide. 100,000 sellers had already sold over $100,000 USD worth of goods in 2017 and the 1st half of 2017 was “breaking records again, as it does every quarter”. A short video on FBA promised a flat rate cost Australia-wide and the opportunity to deliver to one warehouse in Europe to access 27 countries and similar turn-key logistics into the States – it was showcased that adopting FBA could boost sales by up to +26%.

The next segment was a seller panel featuring business success stories such as KaolaSafe (technology to offer parental control over kids devices), HipCub (“The Hippest Baby Brand Ever Born”), VIDI (skin cream provider) and Gobe (an ethically positioned camera lens brand). They came hydrated with lashings of Amazon kool-aid, but spoke honestly & openly about their experiences to date, providing some practical advice on how to get started – FBA is key to scaling your business, with stock issues really hurting you, there should be a focus on managed growth, market by market to avoid extending too far. Sellers were advised to check the list of Amazon rules carefully and check which products are acceptable/banned for sale. Ratings & reviews were also key, with a watch-out for a big drop-off in sales when they dropped below 4 stars.

Next was Brittany Rinker, Key Accounts Manager for the Marketplace in Australia, who introduced more detailed info on the Marketplace and how to succeed. She explained the Marketplace was a combination of web platform and access to 300 million customers, providing merchants with a shopfront, customer traffic and growth levers like the sponsored products and featured deals.

She also confirmed the costs:

- $49.95 AUD monthly membership fee – allowing unlimited product listings

- 6-15% referral fee – a percentage of the sale to cover access to the Marketplace, payment processing and fraud protection (the fee depends on your category)

Management of listings, inventory, orders & reporting will depend on your scale… from manual updates, through bulk (spreadsheet) uploads, to full automation via API – they will support all levels of merchant sophistication. In terms of best practice, she suggested four key areas:

1. Selection: “First cast a wide net, then go deep sea fishing” by launching with a broad assortment and ensuring stock levels are maintained

2. Content: Product page content is crucial for discoverability and sales, merchants should use the published style guides (per category) that are available in seller central to deliver a consistent format, thus increasing traffic, delivering a better customer experience, improving conversion rates, and reducing returns.

3. Motivation: While Amazon provides the tools and growth levers, success is dependent on seller competitiveness and attitude. A compelling offer is the starting point, not necessarily the cheapest but the best value overall, and sellers should get up to speed with the levers to success within their seller central account. This is not about a one-time data upload of information, but ongoing management and optimisation, so make sure you have the right resource in place to manage this.

4. Product Detail Page & Buy Box: Unlike other marketplaces, Amazon has one product page per unique SKU or ASIN in their language (Amazon Standard Identification Number), with vendors competing to win the ‘Buy Box’. Competitiveness here depends on the offer (price + Shipping), convenience (i.e. FBA or equivalent speed in fulfillment) and the sellers’ history and experience.

Brittany closed by letting delegates know that attendees would be receiving a follow-up survey, and from there registration invitations, following the Summit.

Russell Zimmerman, Executive Director at the Australian Retailers Association rounded out the morning with a call to arms for SMEs and local retail to get on-board, to leverage the opportunity and disruption to their advantage.

We’re already working closely with clients to get prepared, so after all the talk and speculation, it was good to finally see the business arrive and begin engaging with a broad range of Australian businesses. Amazon’s arrival is now becoming real and it will be important to have a strategy in place, at least to mitigate the risk, but ideally to join the band wagon and take advantage of the huge opportunity the arrival represents.

It's time to prepare. It’s time to get Prime’d.

The SME Association of Australia provides a comprehensive platform for the collaboration of businesses, organisations, associations, schools, higher education bodies and government to ensure SMEs are equipped to connect, grow and prosper. Find out more at http://www.smea.org.au/. Join our SME Community, follow us on Twitter | Facebook | LinkedIn and subscribe to our podcast SME Radio

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