Australians will now be able to join the 100 million Amazon paid members around the world. On Tuesday the ecommerce giant launched its local paid membership program, Amazon Prime, offering customers free two day delivery on eligible products for an annual fee of $59.
And as with Amazon’s cautious approach to its launch in Australia, it will take some time to build up to the service levels experienced by US consumers, so no, free, same day deliveries just yet.
The announcement comes just weeks after Amazon announced it will no longer allow Australians to make purchases from Amazon.com or its other international sites after July 1, effectively pushing Australian customers to the local site.
Prime should make that more appealing and the new membership program also includes free international shipping on eligible Amazon US products over $49.
According to Amazon, “Prime members in Australia will have access to the widest selection of Prime benefits at launch for any country ever—free delivery on millions of local and international items.”
In the US, Amazon Prime members pay considerably more per year – $119.
The free two-day shipping for Amazon Australia products would initially extend to members in capital and regional cities, covering 90 per cent of Australian customers, with more areas to be “added over time”. Prime members in remote or rural areas will receive expedited shipping in as fast as four to five days.
Prime members will also gain access to Amazon’s media streaming service, Prime video, and ebook service, Prime reading.
Trouble for retailers
The Prime launch is made possible by the uptake of Fulfilment By Amazon (FBA) which launched four months ago, allowing Amazon marketplace sellers to have Amazon store and deliver their products on their behalf, according to Juozas Kaziukėnas, founder of Marketplace Pulse, which tracks the performance of ecommerce marketplaces.
“Those 4 months were used to kickstart the catalog available on Prime on day one,” Kaziukėnas told Which-50.
“And it worked – of the 17,500 total sellers, more than 2,500 have sent the majority of the catalog to FBA for storage, with 1,500 more sending at least one product to FBA. Thus when Amazon enabled Prime, it on day one was available for a large catalog of items, both from Amazon and from sellers, instead of launching with a limited catalog.”
The launch of Prime “puts Australia on par with other Amazon marketplaces” and hides the difference of buying directly from Amazon versus from a marketplace seller, Kaziukėnas says, ultimately creating a more consistent shopping experience for customers.
That consistency, the benefits of Amazon’s logistics and the value of Prime to consumers, spells trouble for retailers, Kaziukėnas said.
“Once consumers commit to the Prime membership, they are less likely to shop elsewhere. Amazon and sellers will benefit, others will start to struggle.”