How Amazon will fulfil its Australian ambitions

Angus Kidman 12 January 2017

AmazonFBA

Shipping stuff for other retailers is big business.

Speculation continues about Amazon's plans to enter into the Australian market with a full online shopping site, rather than the ebooks and limited video streaming it offers currently. One aspect of those plans that's often forgotten: Amazon doesn't just make money by selling goods directly. It also turns over a pretty penny by letting other stores use its warehouses and shipping services.

Last year, the Fulfillment by Amazon (FBA) platform was responsible for shipping some 2 billion items. Yep, billion. Seller numbers globally rose by 70% (and outside North America, which is still Amazon's biggest market, they grew by 80%). Amazon says more than 6 million new items were added through the FBA program in 2016, and that there are sellers in 130 countries making use of the service.

For shoppers, the benefit is being able to order from other retailers without having to set up an additional account. If they're signed up to Amazon Prime, they can also take advantage of free shipping (though whether Amazon will be able to sustainably offer free shipping in the Australian market is a very open question).

For Amazon, it's an easy way to make better use of its warehouse resources, and a handy source of additional income through seller fees. It also means there's a much wider range of goods listed on its site. So this will definitely be a key part of its strategy down under.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

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