Thinking of starting an Amazon FBA business in Australia? Then you’ve come to the right place. This guide will help you get up to speed on Amazon AU FBA selling basics, including why to sell in Australia, how to sign up for the marketplace, what to look for when evaluating a product for listing, where to find a reliable and cheap supplier, and much more.
Before we get into the thick of things, let’s start with the basics.
Amazon FBA is a fulfilment program by Amazon for sellers. It allows you to send your inventory to Amazon warehouses, where the Amazon staff then picks, packs and ships it to your customers in exchange for a small fee. Even the returns and refunds are handled by Amazon under the FBA program, which essentially automates a large part of your business. It’s the most convenient way to run a private label or wholesale store on Amazon.
The other—and far less popular—selling method on Amazon is referred to as Fulfilment by Merchant (FBM). Here, you are responsible for taking care of logistics, including storing the products, delivering them to your customers, and processing any refunds on time. This method is mostly preferred by sellers engaged in dropshipping or those dealing with bulkier items.
Amazon has been offering its FBA services in Australia since 2018. Back then, it had only one fulfilment centre located in Dandenong South, Melbourne. Today, it operates six centres to support its rapidly growing FBA operations throughout the country.
The e-commerce industry has grown tremendously during the last few years in Australia. More than 60,000 businesses now sell online and contribute over $32bn annually to the national economy. But just how popular is Amazon in Australia?
Amazon generates 3% of the total online sales in Australia. That's quite an achievement considering how the company embarked upon its Oceanic journey just three years ago. Investment bank UBS expects Amazon Australia to hit $4bn in sales by 2023.
Right now is the perfect time to join and be a part of the budding Amazon AU seller community. All indicators seem to point in the right direction. They have already intensified their expansion plans, especially under the FBA program, to make Amazon the country’s leading online marketplace. Setting up a digital storefront today will boost your chances of becoming a major seller tomorrow.
Other benefits of selling on Amazon FBA in Australia include:
Compared to other Amazon markets, the Australian market is still in its primitive years. You won’t find many sellers competing for the top spots within a particular niche. It’s far easier to build your brand with lesser competition around.
Since competition is low, you don’t need to have a large budget to launch a product in Australia. You can start with a relatively small investment—a luxury for sellers in the US, Japan, UK, or other established Amazon marketplaces.
While it can take you a good 2–3 years to get your investment back if you’re selling on Amazon US or UK, the ROI is much higher in the case of Amazon AU. You may recover your initial investment in just 6–7 months with a well-executed launch and ranking strategy.
Amazon recognizes that it needs to attract more sellers if it wants to become the largest online marketplace in Australia. Therefore, it has adopted a more lenient approach with sellers insofar as to not necessarily suspend your account or penalize the listing even if you violate some of its policies.
Of course, this doesn’t mean you can or should transgress set boundaries. All it means is that Amazon isn’t as strict as it would be in the US or UK markets.
In the US and UK markets there are numerous product categories with Amazon itself as the top seller. This makes it almost impossible to compete with Amazon on price. Thankfully, Amazon Australia is free of such challenges at least for the foreseeable future which brings us to an important question.
If you launch a product in a low price range, you can start an Amazon FBA business in Australia with anything between 10,450 AUD and 13,150 AUD. This is assuming your company registration cost is 420 AUD, trademark application fee is 330 AUD, product landing cost is less than 8 AUD (for an inventory of 3 months), product photography cost is 400 AUD, and the average daily ad and marketing spend is 45 AUD for the first 30 days.
With high ROI and a possible profit margin of above 30%, Amazon FBA Australia is definitely worth it. Bear in mind, however, it won’t replace your full-time job straight away. Like any business, you’ll need to invest both time and resources before you consider making Amazon your primary source of income.
The selling cost on Amazon includes:
i) Subscription fee, which is $49.95 per month for professional sellers,
ii) Fulfilment fee, which starts from $1.78 for standard-sized items and $6.65 for oversized items,
iii) Storage fee, which costs an average $21.175 per cubic metre/mo,
iv) Referral fee, which is charged as a percentage of the selling price, and
v) Disposal fee, which starts from $0.15 per item. These are exclusive of GST.
Amazon also charges you a 10% GST on each sale if your business has an annual revenue of 75,000 AUD or more. Eligible sellers, in turn, can collect GST from their customers when selling on Amazon Australia.
The referral fee on Amazon varies from product to product and from one category to another. This can sometimes make the calculation a bit confusing. To prevent sellers from making costly mistakes, Amazon provides a specialized tool called the FBA calculator. You can access it here.
Amazon FBA Australia calculator is easy to use:
To sell on Amazon FBA in Australia, you must first create a seller account on Amazon. You can do that by going to the Amazon Seller Central homepage.
You need the following documents to sign up for Amazon:
No, you don’t need a business name to sell on Amazon. You can register as an individual seller too. However, there are several benefits of using a business name. These include convenient branding and higher tax savings.
Should you decide to sell as a business on Amazon, you’ll need an Australian Business Number (ABN). You can get an ABN for free if you apply directly on Australian Business Register (ABR). Alternatively, you can hire a consultant for the job. Most service providers charge $50 for submitting an ABN application in Australia.
Amazon clearly states in its policies that all Amazon Professional sellers must have liability insurance of up to $1,000,000 to sell on the platform. This applies to all markets, including Amazon Australia. That being said, Amazon seldom asks for the documents. So this is pretty much a case of whether you would like to have liability insurance for your FBA business (and if you can afford it).
Yes, the bank account must be registered on your name for Amazon to accept it as a valid deposit method. However, if you are operating as a business, the bank account should be registered on the name of your business.
No, you don’t need a trademark to sell on Amazon. However, it’s a recommended practice to do so. It helps protect your brand. Otherwise, any seller can attach themselves to your listing and start selling their products under your brand (or business) name.
You should register your trademark in Australia and the country where you plan to source your product from. However, you can do without the latter too.
You can apply for a text or image-based mark depending on your needs. Amazon accepts both types for brand registry.
Amazon Australia is home to millions of products listed across 25+ categories. These range from Home & Garden to Automotive & Powersports. You can find the complete list here.
While you can sell a product in any category, some categories require official approval from Amazon. These are known as gated (or restricted) categories. As a beginner, you should steer clear of products that fall under gated categories.
Furthermore, there are a few products that Amazon prohibits for FBA. These include gift cards and gift certificates, alcoholic beverages, hazmat products, vehicle tires, firearms, items made from feathers, fur, or anything obtained from threatened or endangered species. These should be avoided too. Check out this helpful post from Amazon to learn more about FBA prohibited products.
With that in mind, let’s take a look at the product hunting criteria for Amazon AU.
Choose a product:
Pro Tip: When hunting products for Amazon Australia, make sure that the Ship from Australia box is checked. This will filter out any international sellers. Manually verify the reviews on each listing to validate further. Use our Niche Finder tool to speed up your product research process.
Based on the current data from Search Terms Report [February 2021 edition], these are the 5 most in-demand products on Amazon Australia:
Private label sellers on Amazon typically source their products from China. We’d recommend that you do the same. China is a manufacturing giant. It supplies all types of products at the lowest possible rates. Sure, there’s plenty of variation when it comes to quality, but all it takes is a little research to zone in on a reliable supplier/manufacturer at reasonable rates.
Fortunately for ZonGuru users, sourcing isn’t an issue. When using our tool, insert a keyword in the Easy Source feature to automatically vet suppliers based on your business needs. Finding the ideal manufacturer is literally a click away.
Alibaba is the best platform to find Chinese suppliers for your Amazon FBA product. You can find thousands of manufacturers here. With Alibaba’s Trade Assurance program, your investment remains protected too.
1688.com is another great option to source products from China. It offers even cheaper rates as compared to Alibaba. The only downside here is a lack of English content. Since most suppliers here are from the inner/local markets, English isn’t exactly their forte. So you may need to hire a translator if you want to use 1688.com to fulfil your product sourcing needs.
If you’re just starting your Amazon AU journey, we’d recommend sticking to Alibaba.
You can hire a freight forwarder or ask your supplier to ship your products to Amazon in Australia (if they offer the service). It’s advisable that you select DDP (Delivery Duty Paid) for shipment, where your freight forwarder or manufacturer will handle the complete shipment process, including packaging, loading, port delivery, export duty clearance, delivery to destination, unloading at destination, and import duty, taxes, and customs clearance.
Pro Tip #1: When requesting shipping quotes, you can use the Amazon Australia FBA warehouse address for Melbourne to get an initial estimate. The address is 1-29 National Dr, Dandenong South VIC 3175.
Pro Tip #2: The Love-Hate feature lets you scan your competitors’ products to find the common features that customers love or hate. This information can then be relayed to your supplier to ensure your product possesses all the qualities potential customers ‘love’ and none of the features that they have come to dislike.
To sell any product on Amazon, you must first list it through your AU seller central account. Before we discuss the steps of how you can do that, let’s take a look at the prerequisites of creating a listing on Amazon.
Once you have sorted these things out, you can then start to list your product on Amazon Australia.
The Selling price can make or break a listing. Set it too high, and you can chase away your customers. Set it too low, and you can struggle to take any money home after deducting all of the expenses. If you don’t price your product right, it can de-rank your listing. The best strategy is to follow what your competitors are doing, and if possible, try to keep your price point slightly lower than the average market rates.
Besides ranking your product organically on Amazon, you can also take advantage of paid promotions to promote your product. Use different ad-types like Sponsored Product ads, Video ads, and Display ads to bring in more traffic to your listing. You can also ask your customers to drop reviews, which could further help on the marketing front. However, avoid asking for positive reviews. Otherwise, Amazon may suspend your account.
Amazon Australia is one of the fastest growing eCommerce marketplaces in the region. The company is adopting a seller-centric approach which makes all the more sense to set up an FBA business today. The biggest hurdle? A lack of seller tool functionality in the Australian marketplace from major FBA tool providers!
As official partners of Amazon, ZonGuru is one of the first companies to provide exclusive access to North America, Europe, and Australian Amazon marketplaces. Sign-up for a 7-Day free trial to any of our plans and gain the insights needed to become the next big seller!
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