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Thread: Amazon Australia Launched
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15th December 2017, 01:34 PM #31
While i agree with supporting boutique sellers, the benefits of an Online Marketplace (Amazon, eBay etc) is it gives these stores an opportunity to broaden their customer base for a minimal outlay. It also gives independent stores starting out a distinct edge over established, larger retailers.
Because they don't need a "Shopfront" they have significantly reduced overheads. You can basically run your business from your garage, and if you use Amazon, you can even get them to store and distribute your stock too so you don't even need that. If you sell a quality product, for a reasonable price, you move up the list in Amazon's product searches because its based on the purchasers reviews.
Its a distrupter, and there will always be those that want to fight it and lose out (think when shopping malls first started springing up and the affect that had on the old strip malls). You need to adapt your business model to suit the current market demands. And like it or not we're in a world now where most people don't have much time to spare travelling around cities to small stores on opposite sides of town, or search 42 websites to find what they need. The bulk of business will move online sooner or later, and if you don't adapt, you'll be shutting out 90% of your potential market.
I'm not saying that this is a good thing, i'm just saying that it is what it is... and if you want to run a successful business, you need a solid online presence. Amazon, eBay etc gives you an opportunity to do that without having to invest heavily in development because its already done.Coming Up With Complex Solutions to Non-Existent Problems Since 1985
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15th December 2017 01:34 PM # ADSGoogle Adsense Advertisement
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15th December 2017, 02:05 PM #32Woodworking mechanic
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I have a small shop near me that sells all times of threaded fasteners and he has a very wide range. His problem is he thinks he has the market captured and asks high, and in some cases stupid, prices for his goods.
A classic example was a large metric nut with a very fine thread that we needed a few of, but not in a hurry. He has them in stock send gives us a unit price. We rang Blackwoods and got a box of 10 for the same price as his one. If you were desperate and were passing the cost on, maybe, but if your not in a hurry why would you buy from him?
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15th December 2017, 02:33 PM #33
I'm not so sure that you can call the cost of being involved with Amazon as minor. I don't remember the exact numbers but I think they take something in the order of 25% of the order value. Compare that to Etsy which is 3.5%. Admittedly as a maker you need to have a valid wholesale price that can make you a sustainable income. Generally that will be around 50% of retail. If you can't make money at that level then you need to look at your pricing, product and process.
There is a place in the marketplace for the likes of Amazon. I'm just not so sure that there is a place for niche makers in that environment.There ain't no devil, it's just god when he's drunk!!
Tom Waits
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15th December 2017, 02:40 PM #34
That's my point in a nutshell. He has his perceived market cornered. His market could stretch a lot further with a more dominant online presence. Small & Medium Businesses are increasingly ordering from the likes of ebay and amazon. They don't have the clout to be able to get solid deals direct from the manufacturer, but get a better price than retail shopping through them.
I wasn't saying Amazon is a catch all. Etsy, eBay even gumtree are better for your smaller niche/boutique businesses. Amazon is better for a business with significant turnover. I'm pretty sure the 25% Amazon fee is if you use their warehouse and distribution services. So you have even less overheads that still makes the 25% fee an attractive proposition. Your only outlay is manufacturing and/or importing. You don't need to worry about shipping, or maintaining a warehouse or storage facility. You don't need to worry about packaging up the items for post... There's an online solution for all and despite the reluctance if people are willing to explore it, i believe there is potentially a massive upside in smaller Mum & Dad businesses if they are able to adapt to that way of operating..
Now, that isn't to say that Mum & Dad shops won't have a place in the future, I just think there wont be room for all of them...Coming Up With Complex Solutions to Non-Existent Problems Since 1985
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15th December 2017, 04:16 PM #35Member
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Dibbers,
I'm a bit less optimistic than you are. The Amazon market place disaggregates the products sold by one of these small businesses, which is fine if you are selling niche products (Vesper tools for example don't have lots of competition in their market, if you want to spend a couple of hundred on a particularly gorgeous square they come to mind pretty quickly) but there is little to no ability to build a business based on commodity items plus service or to construct sales of some niche item plus commodity items because the structure of the Amazon market disconnects the various sales. I'd imagine that Carbatec would not do so well selling Kreg gear or similarly commodity items on the US site because today there are 1179 items found for a search on Kreg on the site and the competition is undoubtedly pretty stiff. When I go to the Carbatec website I look for whatever specific thing I am after (possibly a sale item) and then browse around for other interesting stuff (which might have higher margins), I do the same on Amazon or Abebooks, but without really worrying about who the seller really is. Thats a loss of marketing control and most likely, a loss of margin.
The Amazon fees are more like 10-15% of the sale value if you don't use their logistics, and a rather higher percentage if you do, I've seen references to 30% and higher but don't have good data on that. I have no idea what, to take a random example, Vesper's margin is, but 15% is probably a big bite out of it
This is not a good environment for a small retailer, commodity items come from an area of intense price competition, specialist items are sold by their makers. A business based on service has to have some significant margins to support that service, so it can't sell commodity items. Thats a small market place.
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17th December 2017, 09:40 AM #36SENIOR MEMBER
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Funnily enough we were loading up the new library shelves from the boxes in the shed and I came across a "Do It Yourselfer Australia" magazine from September 1978 that was my FILs, The Editors Note below is especially poignant in light of our current discussion...if only he knew how wrong he turned out to be...
FYI the big news was the Power Revolution that was a new Skil Hammer Drill with REVERSE..
Do It Yourselfer.jpg
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17th December 2017, 01:17 PM #37Member
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The reversible hammer drill was the real sign of things to come - the vendors discovered that they could substitute gadgetry for knowledge.
Can someone explain why a reversible hammer drill is useful? I seem to have been suffering from some kind of imagination failure in that area for the last few decades, but its not a tool I use more than once a year.
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17th December 2017, 11:27 PM #38Senior Member
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18th December 2017, 09:46 AM #39
You use one when you drill the hole in the wrong place, it fills the hole back in
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18th December 2017, 10:14 AM #40
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18th December 2017, 07:43 PM #41Member
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Can I get a reversible chisel?
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18th December 2017, 08:33 PM #42
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24th December 2017, 03:03 AM #43GOLD MEMBER
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Had a test of Amazon Oz, and got the goods shipped reasonably fast from the vendor, not Amazon. I deliberately looked for local suppliers and was annoyed to find that one of the vendors was just a front for a Hong Kong shop, which was not obvious on the Amazon page and only really showed up on the parcel tracking site.
I have found Amazon US and to a lesser extent UK to be very slow on actually getting my goods into the postal system, often they stuff around for a week or two for books listed as 'in stock, ship in 24 hours', and then I get to pay for shipping on top of that. These days I only buy DVD's that are not being released locally from Amazon, otherwise I buy movies & TV locally and woodworking videos direct from the publisher.
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24th December 2017, 07:01 AM #44Senior Member
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I agree that customer service is what most want not just a cheap price.I know that if the staff treat me like dirt I don't go back no matter what I just like good service over price.
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24th December 2017, 10:51 AM #45GOLD MEMBER
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