How Amazon sees the small business opportunity in Australia
Small businesses are one of Amazon's greatest assets.
Not many companies demonstrate their own success through the success of others. However, Amazon is not like many other companies. Taking stage at Amazon Innovation Day, where the sheer size of the crowd hoping to soak up some of Amazon's success was almost overwhelming, the company's executives discussed not only their own strategies for innovation but also how the success of small businesses on the Amazon platform bolstered their own.
"The Amazon Marketplace is where we open up the fulfilment centres and logistics capabilities to third-parties to sell their products. In some ways, we’ve opened ourselves up to competition from the third parties," said Chief architect at Amazon Glenn Gore.
"Why would you do that? Because it is true customer obsession. We are serious about giving our customers the best choice, the best price possible. Even if that means we don’t make the sale ourselves."
Some of the most innovative aspects of Amazon's platform are designed around its marketplace sellers. For example, Fulfilment by Amazon (FBA), which became available in Australia at the end of February 2018, can help sellers scale by letting them utilise Amazon's shipping and logistics services.
Russ Grandinetti, senior vice president of international customer at Amazon said part of the company's job is to help free up entrepreneurs to do what they do best.
"FBA allows sellers to actually take their inventory and put it inside an Amazon warehouse... that allows them to focus on what they do best, which is building great products. This is a program we have successfully grown to great scale around the world," Grandinetti said.
He gives the example of Amazon seller Hip Cub – "If it wasn't for Amazon they would have needed 30 times the capital to get the business to the scale it is at now... They actually send their inventory to fulfilment centres all over the world without actually having employees in any of those countries."
But it is still early days in Australia. Amazon Marketplace only launched in early December 2017 and there was a teething gap before FBA became available in February. Some of Amazon's most popular services, such as Prime, are also still not available for customers. But as a global business Amazon is confident.
"If you look at some of the stats in America, some of the research shows that there is actually 600,000 jobs created in that third-party ecosystem by smaller companies being able to sell their products and being able to focus on their product and their market without having to worry about the logistics of shipping the product, of dealing with returns, etc," said Gore.
"As this comes to Australia it’s going to be really exciting to see what this means for Australia. We do have a really healthy small business economy."