Amazon ‘here in 60 days’

Amazon could launch across Australia within the next 60 days, according to Citi Australia.

Based on supplier feedback across many categories, Citi said a pre-Christmas Amazon launch date is likely.

“Launch timing remains uncertain and subject to website and logistics testing, but we would expect a formal launch to occur sometime in October 2017, ahead of Black Friday on 24 November,” Citi analysts said in a note.

“We expect Amazon to offer free delivery over a value threshold, with the Prime service to be offered later, potentially coinciding with Prime Day in July 2018.”

Citi said Amazon will be buying directly from leading suppliers, holding inventory and setting retail prices, adding that buying terms have been set and first orders have been placed with suppliers in recent weeks.

“This increases near term gross margin risks for retailers as price will be Amazon’s key lever.”

Contrary to initial press releases and market expectations, Citi said that Amazon Marketplace is a secondary focus, although several retailers and Ebay sellers have been targeted.

“In our view, lower pricing will likely be the result of Amazon’s lower margin and ROI expectations, particularly in the short term. A lower cost-to-serve could provide support for favourable buying terms relative to bricks and mortar retailers.”

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Citi suggested Amazon has targeted a full product range with key suppliers.

“Based on our estimates, the incremental 2Q18e sales impact could be ~$200 million or ~0.2 per cent of total Australian retail sales,” said Citi analysts.

Meanwhile, Amazon is searching for a location to build its second headquarters in North America that would cost more than $US5 billion ($A6.2 billion) and house up to 50,000 staff.

The e-commerce company, which is headquartered in Seattle, said on Thursday it was seeking proposals from local and state government leaders and would select the location next year.

Amazon’s workforce has exploded to more than 380,000 from under 25,000 since it moved to Seattle in 2010, as it rapidly expanded to become a global retailer – selling everything from groceries to appliances.

The company’s total revenue has grown to $US136 billion at the end of last year from $US34 billion in 2010. Amazon recently snatched up Whole Foods Market for $US13.7 billion.

Amazon said the new headquarters should ideally be located in a metropolitan area with more than one million people, potentially giving the company a shopping list of more than 50 cities to choose from.

The project would initially need more than 500,000 square feet and up to 8 million square feet beyond 2027, Amazon said.

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“We want to find a city that is excited to work with us and where our customers, employees, and the community can all benefit,” Amazon said.

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