Updated: Jan 7, 2020
In September, the crowds went wild as Amazon launched its highly-anticipated Israel shipping operations. The online retail giant quickly took Israel by a storm, just in time for High Holiday shopping.
Free Shipping, No Taxes, and Lower Exchange Rates
Israel is a relatively small market with limited opportunities for consumers. Access to the largest online marketplace is a dream come true for Israelis. Amazon sells the same products found in Israel for cheaper and sells a seemingly infinite number of items.
If that isn't enough to encourage a mass shopping-spree, Amazon added free shipping to the deal for purchases over $49. Furthermore, Israel agreed to wave taxes for shipments under $72, a considerable money-saver, as retail taxes in Israel are a whopping 17%.
It's no wonder that the volume of orders from the company grew tenfold since last year.
What Are We Buying?
Israeli's - whether native-born or immigrants- are always on the hunt for a good deal. For a western country, Israel has low wages and costs are high, and everyone can find something they want on Amazon.
Native-born Israelis are likely to use the internet to buy similar things they can find in Israel, but for better prices. Used to shopping on Chinese sites like Aliexpress, Israelis are glad to buy higher quality products at prices well below what they can buy locally. Shoes and electronics are expensive in Israel and are now being purchased en masse on Amazon.
Expats from the United States, Canada, and other Anglo countries miss their favorite brands and luxury items that are unavailable in the Holy Land. Scented toilet paper, ziplock bags, tennis balls, brand-name shampoo, and more are their go-to Amazon splurges. Groups like Amazon Israel Best Deals are flooding the local Facebook scene to assist Olim in trying to find their favorite products at great prices.
Amazon's bestselling categories in Israel on Black Friday and Cyber Monday included toys, kitchen utensils, cosmetics, clothing, and personal care products. People also went crazy for Corelle dishes, iPhone holders, Contigo bottles, and name-brand toiletries.
Sounds Amazing! What Could Go Wrong?
Many were quick to point out the downsides of the Amazon takeover. For one, the massive volume of orders has the postal service stressed beyond capacity. As part of their deal, Israel agreed to prioritize Amazon packages, leading all other mail to get delayed. Packages were lost, and the fantastic service promised couldn't be upheld all the time.
A farther-reaching concern is the potential negative economic implications. Amazon operates somewhat like a bully. Local businesses, both e-commerce and not, are likely to see their sales go down unless they play nice and sell on Amazon. Although moving to Amazon offers them more exposure, there are losses involved. They miss out on vital customer data they would have access to if they were selling on their platform. There are extra fees businesses must pay for checkout visibility and other services. Overall, Amazon makes a lot of money off the companies, who serve as additional customers for the giant.
It's not all peaches and cream for consumers either. In Israel, packages don't always arrive at one's door, so Israelis sometimes must pick up their items at the post office or local courier. This adds a layer of inconvenience that is absent in other countries using the website. Besides, the free shipping likely won't last, and many believe that it is a way for them to do market research to figure out how to best manage and stock the local Amazon warehouse once it opens in Israel. Also, returns are complicated and expensive. Items for return often must be delivered to inconvenient places, like the airport, and can't always be returned to the local courier station.
In the meantime, the downsides are overlooked, especially by consumers. A recent deal with Bank Hapoalim aims at making cooperation even more attractive for small-to-medium-sized businesses as well as the bank's clients. Israel is a significant market for e-commerce, despite its relatively small population, and Amazon isn't stopping anytime soon. You don't need us to tell you to take advantage of the free shipping while it's still around. We know you will!