Amazon has announced it will ramp up its presence in Australia with the launch of a second warehouse – or ‘fulfilment centre’ – in Sydney later this year.
The announcement comes just five months after Amazon opened its first Australian warehouse in Melbourne. The new warehouse will prepare Amazon for the roll-out of Prime.
Amazon Prime is a subscription service that gives paying Amazon customers access to free two-day delivery and streaming video and music, and is due for launch later this year.
The new 43,000-square-metre facility will become Amazon’s first warehouse based in Australia’s largest city, in the western suburb of Moorebank.
Until this expansion takes place in the second half of 2018, Amazon Australia will continue to be limited by its sole fulfilment centre currently only shipping orders from Melbourne’s south-east in Dandenong.
Amazon sellers are left with the other option to ship directly from their own sites at various locations around Australia to save shipping time, but not all sellers have the resources to manage their own storage facilities.
So the more Amazon expands its local warehouses, the more likely it will attract a greater number of sellers to the platform, which consequently sets itself up well to launch Prime.
E-commerce analyst Juozas Kaziukenas of Marketplace Pulse said this was all a build up to Prime in the future.
“Amazon will need multiple warehouses to both fit all products and also provide reliable service,” he said.
“Eventually Amazon will have multiple warehouses around Sydney, Melbourne and other cities, as well as different types of sites as it grows to support groceries and other special products.
“When Australia gets Prime, sellers will win because they don’t have to do their own deliveries – and customers win because they don’t have to hope that a seller is not shipping the product from the other side of the planet.”
Amazon claimed the addition of a Sydney fulfilment hub would meet the “growing consumer demand” for orders within Australia.
It is expected to speed up deliveries across the country and expand the range of products available to local customers.
Amazon Australia operations director Robert Bruce said the new centre would benefit Amazon customers, boost the local economy by creating new jobs and allow sellers on the platform to access “millions of customers”.
“Sydney represents another important development for our growth strategy in Australia, following a steady and progressive increase in customer demand,” Mr Bruce said.
“This new facility builds on the capabilities of our first centre in Dandenong South, allowing us to continue to fulfil our commitment to fast and reliable deliveries for Australian customers.
“This investment will benefit both customers and the local economy by generating new jobs and providing small and medium-sized Australian businesses who sell on amazon.com.au and use our Fulfilment by Amazon program, with an opportunity to more easily access millions of customers across the country.”
Amazon Australia launched in December with a range of electronics, books, sporting goods and fashion products, and announced its first local fulfilment service in February.
Amazon.com.au’s web traffic has from the getgo outshone an array of leading local retailers including Myer, Kmart and Coles and shows no signs of slowing down. However, it is still a long way behind its main competitor eBay.
The Sydney-based facility will be located in the Goodman Centenary Distribution Centre with easy access to the M5 and M7 motorways.
Amazon is recruiting for a range of roles including operations, support and technical specialists. The company currently has about 1200 Australian employees.