'It doesn't meet the hype:' Amazon's sub prime delivery
First published in The Age Newspaper, 20 June 2018.
Beauty business owner Briony Kennedy is underwhelmed by Amazon Prime' launch and will not be using the platform to sell her products.
"I think what most people don't realise is that Amazon is really another Google, it is a search engine," says Ms Kennedy who is the owner of Melbourne-based beauty business Adorn Cosmetics which sells its products predominantly online.
"It doesn't meet the hype at all. Whilst it has its place, I don't think people need to be as fearful of it as they are."
Ms Kennedy started Adorn in 2009 and employs 10 staff with a turnover of more than $1 million a year.
She doesn't believe Amazon Prime, which offers two-day delivery to Australia's major cities for a monthly subscription of $6.99 or $59 a year, will impact her business.
"A lot of online retailers already offer free delivery over a certain spend which we do," she says. "It's just a different customer base, Amazon is for those customers who are really price-driven. Even then their products are not really that cheap, do you want to pay more for free shipping? I think they are compensating for products being more expensive than they are at Amazon.com before it gets blocked."
She says she investigated selling on Amazon before it launched in Australia but the logistics of listing products on the online retail giant are quite difficult.
"It wasn't something I was tempted into," she says.
Kennedy says some Australian retailers already offer same-day delivery, a service Amazon Prime is not providing.
"Amazon is going to have to deal with the postal system here and the couriers," she says. "I've found Australia Post has picked up its game, it has had to."
Ms Kennedy believes retailers like Adorn can differentiate themselves from Amazon.
"People will still look for customer service and they will still want bespoke products that you don't get from something big like that," she says.
"Independent retailers like Adorn are more targeted and more specific around their marketing strategy and the customer they are attracting. I just don't think it is the sort of place our customer would go.
" However, Hianyang Chan, senior research analyst at Euromonitor International, says Amazon Prime could offer advantages for small businesses that decide to sell through Amazon by pre-shipping their items to Amazon fulfilment centres, and letting the company handle packaging, shipping and customer services.
"Despite the fees charged for storage and shipping, the potential benefits outweigh the cost," he says.
"Amazon provides these small businesses the opportunity to add another channel to sell through by allowing them access to world-class logistics capability to equal the playing field and better compete next to the biggest household brands."
Chan says the quality of the product offered by the small businesses is still more important than anything else.
"Services such as Fulfilment by Amazon and Amazon Prime offered by Amazon will only help these small businesses to simplify issues related with shipment and fulfillment and reaching out to a wider consumer base by offering a reliable fast and flexible delivery service."
Cara is Fairfax media's small business editor based in Melbourne