'See ya Woolies': Retailer raking in $8k a day on Amazon
A PERTH mum who makes nearly $8000 a day selling hot sauce on Amazon has welcomed the Australian launch of the e-commerce giant.
Renae Bunster, creator of Sh*t the Bed Hot Sauce, said the cult favourite had this week finally hit number one on Amazon's top-selling hot sauces ahead of Sriracha and Tabasco, after first being listed six months ago.
"We entered the top 10 about 10 days ago and have slowly been stalking our way to the top," the 39-year-old said. "Sales have been going up and up, we're selling hundreds of bottles a day now, as opposed to 10 or 20 when we first listed - $US4000 to $US6000 a day."
Sh*t the Bed Hot Sauce (there is no asterix in the title), at the "luxury" price of $US18, is six times more expensive than Sriracha. "They were selling six times more than us to hold that spot, but now we've overtaken them in dollars," she said.
Ms Bunster said with a 50-50 split between Australian distributors and American sales, the business would turn over $1 million this year - and no thanks to Coles or Woolworths, she says which refuse to stock the product due to its name.
"The money we're making through Amazon is the exact same we'd make through Woolworths, [if we were] selling the minimum amount just to stay on the shelf," she said. "So we're like, f*** you, Woolworths."
Ms Bunster said even though she didn't have a choice, she wanted to "stay away from the duopoly".
"If you lose a contract with them you've lost half of your stores, but if you're with the independents and you lose two stores, it doesn't affect your bottom line," she said.
While she was "absolutely" planning to list on Amazon Australia, Ms Bunster said supermarket sales were "where our bread is going to be buttered". "We're picking up more and more distributors," she said.
"Absolutely we will list ourselves on Amazon [Australia] and expect to be number one instantly. But the Australian e-commerce market isn't as sophisticated, Americans have been buying online for so long, they expect things instantly.
"We're already in lots of stores here and people are just used to going to the shops rather than shopping online - but we'll be there."
Jessie Goh, founder of boutique kids, babies and women's store Summer Lane, has already signed up as an Amazon Marketplace seller. She said she was excited at being able to access Amazon's huge reach.
"It just presents a lot more opportunities for independents like myself," the 36-year-old said. "Amazon have the technology, the know-how for fulfilment, marketing and the database."
Ms Goh, who started the business around eight years ago with her partner, said she had only started doing online seriously about five years ago.
"Since then we've been doubling our sales online every year, to the point that this year it's actually taken over our store sales [to the] 60-40 mark," she said.
Amazon Marketplace sellers pay about $50 per month and the site takes between 10-15 per cent of sales as a fee, depending on the category, which Ms Goh said was "pretty comparable to eBay".
"We are looking at using Amazon to expand our brand, because we do have a lot of boutique brands that are not mainstream," she said.
"A lot of the products we have are generally not available at the major department stores, very small boutique designers that either sell directly to their own customers or to independent stores."
According to a survey of more than 2000 consumers by comparison website Finder.com.au, 47 per cent said they were excited about the online retailer coming to Australia, with most looking forward to lower prices, a bigger range of products and fast delivery.
Fifty-three per cent, however, were not too keen, preferring to shop at bricks-and-mortar stores.
Nine per cent said they were worried about Amazon's impact on local businesses, while 14 per cent said they could already buy everything they want online.
"Amazon Marketplace is an opportunity for consumers and businesses alike," Finder.com.au editor-in-chief Angus Kidman said. "For businesses, it's an chance to reach a larger audience and potentially grow. My advice to consumers though is to still shop around even when Amazon's launched. They won't always be the cheapest."
In a note on Thursday, investment bank UBS said the launch of Amazon would accelerate the uptake of online shopping in Australia, with a survey of more than 1000 consumers finding 42 per cent expecting to spend more as a result.
"By category, electronics, apparel/shoes and cosmetics were the products Australians were most interested in purchasing from Amazon with baby, auto and fresh of least interest," UBS analysts wrote. "Price, free delivery and range were highlighted as the three key drivers of using a local Amazon site."
Figures released this week by online measurement firm Nielsen revealed 4.6 million Australians accessed the Amazon US site in October, ranking it second behind Woolworths, which was visited by 6.7 million people.
Coles came in third place with 3.7 million, followed by Kmart on 3.3 million and Kogan on 2.8 million.
On Thursday, Woolworths chairman Gordon Cairns issued a thinly veiled threat to local manufacturers considering joining Amazon Marketplace, warning their products could be replaced with private label alternatives.
At the same time, rival online marketplace eBay warned that retailers risked having their sales metrics analysed and products ripped off by Amazon for its own private label range if they joined the platform.
Prominent Australian businessman Dick Smith meanwhile has predicted Amazon could cause job losses and even an obesity epidemic, with the "extreme capitalism" it preaches set to have a devastating effect on the country.
Amazon, which was widely expected to launch its full Australian site to coincide with the Black Friday sales, caused confusion among internet users with a "soft-launch" on Thursday to a limited number of customers.