Amazon announces first Australian fulfilment centre in Melbourne

A few months after confirming its plans to set up shop in Australia, Amazon has today announced the opening of its first Australian fulfilment centre in Melbourne’s Dandenong South.

The 24,000 square metre warehouse is located in the Pellicano’s M2 Industry Park, close to the South Gippsland Highway, Monash Highway, and Eastlink.

Robert Bruce, the company’s director of operations for Australia, said in a statement, “This new fulfilment centre will stock hundreds of thousands of products which will be available for delivery to customers across Australia when we launch our retail offering. We will be focusing on offering our Australian customers low prices on a great selection of products and can’t wait to get started.”

Beyond the retail opportunity, Bruce said Amazon is “thrilled” to be creating new jobs in Melbourne.

“This is just the start. Over time, we will bring thousands of new jobs to Australia and millions of dollars of investment as well as opening up the opportunity for thousands of Australian businesses to sell at home and abroad through Amazon Marketplace,” he said.

Amazon announced its Australian intentions in April, with the company stating its belief that by focusing on the things it believes customers value most – “low prices, vast selection, and fast delivery” – it will over time earn the business of Australian customers.

That exact prospect has been sending local retailers into in a spin.

Credit Suisse predicted in March that retailers such as Myer, Harvey Norman, and JB Hi-Fi will face a “broad-reaching” impact, with the effects on their business models and pricing to be felt within five years of Amazon’s arrival.

A scenario analysis from Credit Suisse also found that if Amazon were to enter the domestic market this year, Myer could lose up to 55 percent of its potential earnings before interest and tax by 2022 compared to a situation where Amazon doesn’t enter; Harvey Norman’s shares took a hit of eight percent upon the release of the report.

Data from Nielsen released in February found that Amazon’s US site converts 49 percent of Australian visitors into sales, coming in fourth behind only eBay with 78 percent, The Book Depository at 74 percent, and The Iconic with 53 percent converting.

Seventy-five percent of respondents surveyed aged 18 or above also stated they are interested in Amazon Australia, with 56 percent saying they are likely to purchase from its Australian site and 45 percent saying they would pay to become an Amazon Prime member.

Image: Amazon’s Jeff Bezos. Source: geekwire.