Fulfilment by Amazon ‘unlikely’ for initial launch

Almost one month after Amazon confirmed the location of its first fulfilment centre in Australia, the e-commerce giant remains tight-lipped about the date and scope of its launch of Marketplace Down Under.

But sources within the retail sector have told that a late-September, early-October launch is very likely. They have also said Fulfilment by Amazon (FBA) will not be part of the initial launch.

“It will more than likely not be a full-service that will be launching. They might not have all their categories. They might not have all the FBA service,” said Ray Ridgeway, managing director of World First, a company that helps sellers on Amazon, Ebay and other global marketplaces transfer funds overseas.

FBA allows sellers to outsource their entire logistics process – warehousing, fulfilment, returns and customer service – to Amazon for a fee. While the exact fee depends on the weight of the item, among other factors, sellers using FBA can expect to pay somewhere between 25-30 per cent of the sale to Amazon. This includes the 15 per cent fee Amazon charges to sell on Marketplace.

Most people in the industry agree that FBA is the key to Amazon’s success, underpinning its delivery offering and differentiating it from competitors like Ebay. (The alternative is FBM, or Fulfilment by Merchant.)

Qing Yuan Zhou, venture partner at Goat Consulting, a US-based Amazon consulting firm, previously told that her company almost always recommends FBA to sellers, since they are more likely to get a favourable page ranking and a shortcut for customers to add their products to cart. As a result, Zhou said, sellers may see sales go up by at least 20 per cent.

But according to sources who have been given access to a beta version of ‘Seller Central’, Amazon’s seller portal, FBA is not currently supported in Australia. This is unsurprising given the fact that Amazon has only recently secured its first local warehouse and the general consensus that Marketplace will launch in time for Christmas trading.