Amazon is expanding the hosted supply chain solutions it offers sellers.
Amazon is offering its third-party sellers an end-to-end solution designed to move products directly from their manufacturers to their customers.
Called Supply Chain by Amazon, the fully automated set of supply chain services includes Amazon’s logistics, fulfillment, and transportation capabilities. The e-tailer will pick up inventory from manufacturing facilities around the world, ship it across borders, handle customs clearance and ground transportation, store inventory in bulk, manage replenishment across Amazon and other sales channels, and deliver directly to customers.
Key features of Supply Chain by Amazon
Automatic cross-border discounts for Amazon Global Logistics (AGL): Amazon’s new prices reflect discounts up to 25% on all cross-border transportation that is bound for Amazon Warehousing and Distribution (AWD), Amazon’s storage service that provides sellers the ability to store their inventory in Amazon distribution centers and distribute products in bulk.
Streamlined domestic inbound transportation to AWD with Partnered Carrier Program (PCP): In addition to AGL for cross-border transportation, later in 2023 sellers will be able to use PCP to streamline domestic transportation into AWD centers.
An expanded AWD offering with reduced prices: AWD is now open to all selling partners, offering bulk storage at discounts of up to 80% compared to storage fees for the Fulfillment by Amazon (FBA) hosted fulfillment service. There is no peak pricing during the fourth quarter, even during the holiday season. Coming soon, sellers will be able to reserve low-cost, long-term bulk storage months in advance at even deeper discounts.
A new Multi-Channel Distribution (MCD) capability: MCD moves sellers’ products in bulk from AWD to any sales channel (including online stores and physical store locations), allowing selling partners to replenish across all their sales and fulfillment channels, not just on Amazon, from a single inventory pool. MCD is currently in pilot with an initial set of sellers Amazon expects to make it available to all sellers later this year.
Automatic inventory replenishment with FBA: In addition to the cost savings through AWD, Amazon will now use its machine learning and supply chain optimization capabilities to automatically replenish inventory into the optimal Amazon fulfillment centers to support expected customer demand, allowing sellers to deliver customer orders for off-Amazon channels through Multi-Channel Fulfillment (MCF). According to Amazon, placing sellers’ products in the right quantities and the right locations to meet customer demand increases the potential for same-day and next-day delivery speeds, which in turn drives an average 15% increase in unit sales.
Amazon actively assists third-party retailers to sell on its e-commerce platform with at least 150 tools and services, and regularly adds new offerings. These include the recent introduction of a revamped version of its Account Health Rating, designed to help its 2 million third-party sellers adhere to Amazon’s policies and maintain positive account activities.
“Our vision has always been to make it as easy as possible for sellers to serve customers around the world, and providing our selling partners with a simple, fast, cost-effective solution to a challenge that has become increasingly unpredictable and complex is an important investment in sellers’ success,” said Dharmesh Mehta, Amazon VP of worldwide selling partner services, in a corporate blog post.
“With Supply Chain by Amazon, Amazon will pick up sellers’ inventory directly from their factory and manage the supply chain logistics through delivery to customers’ doorsteps." Mehta said in the post. "Sellers will be able to offload even more of the complexity of their supply chain logistics to Amazon, both for the products they sell in Amazon’s store and through other sales channels including online and physical store locations. We are excited to help sellers, both on and off Amazon, save more money, drive more business growth, and have more time to continue inventing amazing products for customers.”