How to make sure your business thrives when Amazon gets to Australia
MYOB's CEO on handling the threat and opportunity of the online retail giant.
While there is no official date set for Amazon launching its Australian Marketplace, logic would point to sometime before Christmas. The online retail giant announced its Australian plans way back in April and has continuously released updates since. And as the proverbial clock continuously counts down to the unknown launch, the Australian business community keeps asking the same question. Amazon: good or bad?
Tim Reed, CEO of MYOB, said that Amazon is definitely going to have an impact on the Australian business landscape, but the impact on individual businesses is up to those businesses themselves.
"I think that there'll be some businesses that absolutely thrive on the back of Amazon being here. And I'm thinking in many ways the platform will enable more businesses to compete against big businesses in ways that they haven't been able to in the past," he said.
"So I don't think that businesses should think, 'Wow, that's change and it's going to be bad.' But I do think that most business owners should at least spend 5 or 10 minutes thinking about what's likely to be the impact on their business."
An MYOB survey released in March found that small business owners were split on Amazon's arrival, with 27% worried about Amazon entering the market and another 26% feeling positive about its arrival. The majority of small- to medium-sized enterprise (SME) owners surveyed (57%) felt Amazon's entry into the market would force them to innovate.
According to Reed, innovation will be key to SME's success.
"It comes down to specifically what the business is. But firstly, what we do know is that consumers are acting increasingly on digital platforms and using digital devices. And so for those businesses that haven't started on the journey of having a social media presence of looking at buying AdWords on Google, etc I do think that they should continually reassess whether the time is now to get started on that journey... You need to have an online presence to complement what you're doing in other places."
For business owners that aren't tech savvy, Reed has an innovative suggestion: a younger mentor.
"The concept of reverse mentoring is a really powerful one because if you get somebody in their 20s, it's highly likely that they understand that it's your social media platform. It's highly likely that they will have the skills to be able to get you and your business started."
"It can even be a quid pro quo, where there's mentoring happening in both directions. I think it can be a really powerful tool for a small business owner."
The main question businesses will have to ask themselves is whether or not to list in Amazon's Marketplace. While he stresses there is no hard and fast rule about whether or not businesses should sell on Amazon, he also says it comes down to their business strategy.
"Some businesses are very specific because they have very particular products that get sold just through a specific channel, and that's part of the success. For others, it's all about rural distribution and getting into as many channels as they possibly can."
However, he said for all businesses it was about finding out everything they can about how to make it on Amazon – and doing it now.
"Any business as big as Amazon or any change as big as what they're likely to bring should prompt business owners to think about how it's going to impact their business."