Amazon, the world’s largest online shopping company, has finally launched its Australian retail site. While the initial response was underwhelming, with visitors to the site complaining that there was a lack of stock selection and the discounts were not significant, it has been estimated that Amazon will undercut Australian retailers by 30 percent. Moreover, the company will continue to add to its store, which covers 23 categories, from books to electronics to baby products, making it simple for consumers to buy from the one place.
Despite many stores worrying about the increased competition, there are certainly upsides to the new site. Thousands of Australian businesses will be able to sell their products on Amazon, whose strong reputation will put consumers at ease when purchasing. Startups are optimistic that Amazon will provide them with an established global platform in which to sell their products. In addition, corporate offices have been opened in major Australian cities, creating over 1,000 jobs.
Companies who sell their products on the new site will be able to take advantage of Amazon’s logistical capabilities, one of their main competitive edges. Shipping cost and service is a defining factor in whether a customer buys from Amazon or a local retailer. Companies who adapt their business to compete on this level, by using order management systems like Shippit for instance, will remain competitive.
Businesses who welcome innovation and change will be the ones who can stay competitive in an increasingly global marketplace. The launch of Amazon will push many retailers to develop innovative solutions to help them compete with the corporate giant. Retail tech such as inventory and warehouse management software we be in high demand. Local brands that design, make and sell their own unique products while also providing an enjoyable customer experience are poised to compete well with Amazon.
Systems engineering manager of Freelancer, Aman Bazayev, says that it helps, “Just being open-minded to technology and new things that are coming, as opposed to having this friction internally.”
Silicon Valley investor Jeremy Liew wants companies to remember that Amazon is not invincible and it is not true that retailers cannot compete with them. He mentions that Amazon has been operating in Europe and the US for years and there have been many competing e-commerce companies who have been publicly listed or acquired for billions of dollars.
Innovative Australian companies are also eligible to receive the federal R&D Tax Incentive, where companies with a turnover of under $20 million can receive a tax offset of 43.5% for eligible expenditure (38.5% for companies with a turnover over $20 million). Swanson Reed R&D Tax Consultants help companies to claim this incentive and ensure that they receive the maximum amount they are eligible for.