As Amazon continues to expand globally, we can probably expect every person on Earth to have access to the Amazon market. This is one of the reasons why selling on Amazon is such an attractive prospect; if you know how to sell on one market, it will be easier to adjust to the learning curve as you continue to expand. If you are just getting started, check out this beginner’s guide to opening your Amazon Australia account.
Amazon Australia (Amazon.com.au) is not the latest addition to the ever expanding list of Amazon markets, however, it is a particularly interesting one with it’s own set of circumstances that pose unique opportunities as well as unique challenges. First, let’s take a look at Australia as a country.
Australia is a large country geographically, but with only a few densely populated areas. This poses its own challenge when it comes to creating a logistics network that will be up to Amazon standards. We can see that being reflected in the unique way Amazon prime works on amazon.com.au at the moment. Amazon prime has launched in Australia as of June 2019, and Amazon has done it’s best to offer the Prime service on par with Prime services in other markets. However, there are some stipulations that account for Australia’s unique geographical population placement:
You can see that there is an “effective range” for the 2 day deliveries and the same day deliveries. Of course, same day deliveries are not available for all items at all times even in the US, so it’s not much of a difference. This also means that, effectively, most of the Australian population have access to 2 day shipping as part of the Prime subscription. So for all intents and purposes, Amazon is operating in Australia approximately as it is everywhere else. Amazon is working on adding new FBA fulfillment centers in the future, like their latest addition of the Perth center in December 2019. Which can only mean that it will get more streamlined as time goes on.
Australia and eCommerce
amazon.com.au was officially launched in December 2017 and has quickly proven to be the fastest new Amazon market, with a growth of 1500% in one year. This alone should be reason enough to seriously look into selling there. However, Amazon still has some way to go in order to become the leader in Australia’s e-commerce market, which is currently dominated by eBay and Gumtree.
As of now Amazon has a 3% market share of overall eCommerce in Australia, as opposed to the 22% that eBay has.
However, it is predicted that Amazon will reach 23 billion dollars in sales in Australia within the decade. A report done by R.J. Hottovy from Morningstar quotes:
“We believe Amazon’s playbook in the region will mirror other international geographies, with expedited shipping spurring Prime membership growth and Amazon’s content offerings then unlocking future member subscription/monetisation opportunities,”
If you are wondering if you should be selling now, keep in mind that as of this moment the average Australian receives 2.3 parcels a year. Additionally, it is predicted that the size of the total Australian eCommerce market will grow to be 35 billion dollars by the year 2021. These predictions were made pre-pandemic, so we might expect them to be even higher given a lot of people have started to get accustomed to shopping online to avoid unnecessary movement outside of their homes. These newly acquired habits might transfer into more permanent habits.
Even if the initial prediction is correct, that’s a 20% growth in comparison to 2019. Another interesting piece of information is that 8 in 10 Australians shop online, and 1 in 10 of all purchases made in Australia will be online by 2021.
Prices and spending in Australia
Australia’s national currency is the Australian dollar, which converts to approximately $0.65 USD. This creates an interesting dynamic when you translate prices from Amazon.com to amazon.com.au. Since you have to factor in the Australian GST tax as well as the conversion, you’ll find yourself able to put a larger number on the price tag while pricing items on amazon.com.au than you would in the US or European markets. This is due to the fact that the currency has less value as such so you can have more room to play around with the pricing and possibly increase your margins.
Australians have a lower per capita income than the US, but are still willing to pay more for the items they consider to be high quality. Speaking of Per Capita income , Australia is currently at the 14th spot, placing it in the top 10% of countries according to this metric.
The Advantages of Selling on amazon.com.au
Australia presents some unique advantages for expanding your Amazon marketplace business:
- 1. It’s an English speaking country
It’s obviously easier to sell on a marketplace where consumers speak the same language as you do – but you might not be thinking about what sort of additional benefits come from that.
If you are already selling on Amazon.com or Amazon.uk and you have a PPC structure in place that works well for your products there, odds are they will probably work at least decently well on Amazon.com.au. You will have to do some additional keyword research and set up your product targeting sub structure, but you would not be shooting in the dark as much as you probably did as you were launching your product on your initial market. Of course the same principle applies to your listing and any other aspects of your Amazon business that use communication or copy writing – such as your feedback email series or something like contacting seller central support.
2. The taxes are surprisingly uncomplicated
The way that GST (Goods and Services Tax) works in Australia is very straightforward if you are a foreigner. You have to register your business for GST if your revenue surpasses 75,000 Australian dollars and it’s 10% in pretty much all cases. Also, you might be able to entirely bypass the GST if you are selling online, which just so happens is exactly what you would be doing as an Amazon seller. This is something that you would have to specifically research for your own product and your own circumstances. However, it would seem that it’s not something you would have too much trouble with. It should go without saying that when working out tax and legal matters such as these that it’s best to consult a professional, preferably someone that specializes in Australian taxes specifically.
At face value, it would seem that you could pretty much enter the Australian market and sell there until you get A$75 000 turnover before having to register, if at all. This is plenty of time to figure out how to sell there, which products work and which ones don’t and see if you wish to fully commit. It does seem a lot simpler than selling in Europe or Canada, which are much more complicated. On top of that, you can register and pay online as a foreigner and if you have a PingPong global currency account you can make the payments in Australian dollars and keep your earnings in whichever currency you wish with minimal conversion fees.
3. Amazon is sweetening the deal
Right now, there is a special promotion for Amazon sellers, if you sign up as a new seller you will get a rebate on your monthly professional seller subscription after 3 months. In other words, if you register as a seller on Amazon.com.au by May 31st 2020, you will be charged the $99.95 per month which is the standard fee. At the end of those 3 months, if you are still an active seller, you will be refunded the full A$149.85 at the end of it. sell amazon Australia market
Also, PingPong is making this sweet deal even sweeter: they are offering ZERO fees for AUD withdrawals for 3 months (up to AUD 100,000 of payment volume) for all new PingPong customers that sign up from now until the end of May. Click here to register now!
The other fees you have to pay on Amazon, such as the fulfillment fees, referral fees and storage fees will still be charged normally, as well as any other services Amazon provides you, such as your cost of PPC or any other promotion, lightning deals, early receiver program, coupon promotions etc… This is a great opportunity to take advantage of if you were interested in selling on the Australian market. You can just register and take your time to set up your listings and get everything else in order without feeling like you are wasting money on your monthly seller subscription since you will get it all back in 3 months – plus, with a new PingPong account, remitting your revenues to your home bank account will also be free for 3 months.
Australia is a first world English speaking country with a high per-capita income, and is very much accustomed to shopping online. Their taxes don’t seem to be very complicated and their tax system seems to be at least somewhat lenient to online businesses. The only downside is that Amazon is going to have to work harder to be more of a relevant presence in the country considering that they’ve got some strong competition. That is something Amazon has to do as a company and a platform, and betting against Amazon isn’t usually a smart bet. So if Amazon grows, which it is already doing, you will grow along with it, if you get on board on time.