Why Brexit doesn’t worry Amazon
Amazon doesn’t seem to be the slightest worried about Britain exiting the EU or any possible ramifications it could have for ecommerce in our Islands.
Shortly after the result of the referendum was in Amazon said “We are committed to supporting U.K. businesses selling in the U.K., in Europe and worldwide, and to helping businesses worldwide sell in the U.K. and in Europe, now and in the future”. Since then their actions match their words with the announcement of a new 13th fulfilment centre in Tilbury, Essex and 500 more jobs to come in Doncaster.
The new capacity will take Amazon’s UK workforce up to some 15,500 by the end of the year and there are no signs that that number will stop growing.
The thing is, as far as Amazon are concerned, BREXIT isn’t something to worry about, it’s simply something that technology can solve and with their Amazon Web Services (AWS) platform Amazon have more computing power than they’ll ever need. We already operate in Sterling rather than the Euro (which when selling into the EU gives them another margin opportunity on the exchange rate!) and we speak a different language.
Other barriers to cross border trade are regulation and customs. Amazon are big enough to handle any regulation and it’s highly likely that whatever the shape of BREXIT that the UK will mimic many if not most EU regulations. Customs and tariffs may impact profits, but pricing strategy will easily protect Amazon from the major impact passing the costs on to consumers.
Amazon already have a pan EU distribution network and rent out their warehouses to their third party retilers under their Fulfilment by Amazon (FBA) program. It may become slightly more complex to put your stock in an FBA centre in Germany or France but Amazon will almost certainly smooth the way by putting transport facilities in place.
Have I missed anything? Is there anything else Amazon should be worried about? I’m thinking that Amazon’s biggest worry is nothing to do with regulations, customs, tarrifs or barriers to trade and that their one and only concern will be how much money we Brits have in our pockets to spend and how much of that they can extract.
Mind you, even the amount of cash we Brits have in our pockets may not be that big of a concern for Amazon. As my colleague Dan just wrote, UK retail growth is strong despite BREXIT.