Amazon: “We are going to destroy the retail environment in Australia”

Livewire Equities

Amazon is coming to Australia in 2017 and Watermark Funds’ Justin Braitling thinks it will be bad for local retailers. "They will be dropping distribution centres and performance centres in every state next year. They will be doing general merchandise and they will be doing fresh as well. They will also be putting physical stores on the ground which I don't think anyone knows about. These will mainly be in regional areas because fulfilment is a lot harder in regional areas than in the cities.” Local retailers don’t have long to prepare themselves either. “It has been deferred for six months - they were originally launching in the first quarter of next year. They have decided they want to do fresh at the same time as the general merchandising offer so that has put them back six months.” Read the full story on the AFR: (VIEW LINK) (subscription required)


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Linc Costin

If they said the above comment, what fools would ever buy a product from a company with that attitude to Australia. Not me.

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John Kimber

Amazon needs to solve its own unreported problems which are ignored by commentators who would prefer to create fear than magnify the probable derailing of the Amazon model. First, Amazon is focused on its customers not its suppliers. It is loaded with counterfeit products which Amazon will refund if discovered but will not do anything when a supplier complains about its products being ripped off. Just ask Birkenstock which was forced to remove its brand from Amazon as result of counterfeiting that Amazon will not control.Birkenstock is not the only supplier to have confronted the Amazon model and decided not to list on Amazon. Secondly, any supplier to Amazon will discover that they will lose control of their brand, their pricing and their good will. Amazon has complete control and is well known for capriciously removing or moving products in its website. I recommend anyone contemplating supplying to or buying from Amazon take a look at its complaints pages. Thirdly, the anonymous Amazon employee who is planning on decimating the Australian retail industry needs to first explain how much Amazon will charge suppliers for the privilege of listing in Amazon ( its about 40 per cent to Amazon) which is likely to be far more than the margin available at local retailers where you will Not be forced to compete with counterfeit products. Fourthly, Amazon competes actively with its own suppliers. They know exactly how much is being sold and have no hesitation in creating a product that copies an existing successful brand which is then produced for Amazon in China. Australian companies need to protect and promote Australian brands. Many have looked at using Amazon and in spite of its obvious size and presence have decided not to use Amazon. Australian suppliers are far better off promoting their own websites and logistics where they can retain their goodwill and avoid the costs uncertainty and complexity of Amazon. Good luck to once only Australian consumers who may or may not get what they want from Amazon. Suppliers need to become very sceptical.

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James Marlay

Interesting feedback, thanks for taking the time to comment.

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