There is concern about Amazon's decision to move into Melbourne.

Amazon has purchased a 24,000-square-metre distribution centre in Melbourne, where it will open its first Australian warehouse.

The move should create hundreds of jobs in the suburb of Dandenong, but the Australian Retailers Association said it is bad news.

Harvey Norman founder Gerry Harvey agrees, saying Amazon's arrival in Australia could be disastrous for local retailers.

Mr Harvey predicted clothing, accessories and sport retailers will suffer.

“In our business, in refrigerators and washing machines, Amazon have got in the United States of America a 3 per cent share,” he said.

“They are not that big in our category [but] they are very big in other categories and they will send a lot of other businesses to the wall.

“Their policy is send everyone broke, we'll take over the business, we'll never pay any tax and then we'll put up the price and we'll own everything.”

Mr Harvey sees Amazon as an unstoppable force.

“And that's a great pity because then you'll end up with one big giant who owns everything and pays no tax,” he said.

“Amazon are going to put a lot of people out of business who pay taxes, employ people, and the great majority of their jobs that they talk about, it's like 90 per cent unskilled, probably higher.”

Amazon will not say when its Australian warehouse will open.

“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,” Australian operations director Robert Bruce said in a statement.

“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.”