Amazon provides sellers with managed end-to-end supply chain services
Third-party Amazon sellers now have the option to let the e-tail giant move their products directly from the manufacturer to the end customer.
Amazon is fully launching Supply Chain by Amazon, an end-to-end automated set of supply chain services that provides third-party sellers on its marketplace with a complete solution to move products directly from their manufacturers to customers around the world.
First announced in September 2023, Supply Chain by Amazon enables all third-party marketplace sellers to leverage Amazon's advanced logistics, warehousing, distribution, fulfillment and transportation to move products from factories to customers.
[READ MORE: Amazon hosts automated supply chain services suite]
According to the e-tailer, hundreds of thousands of sellers have already been using at least one of these Supply Chain by Amazon services, with adoption of multiple services tripling in the first half of 2024.
Starting Wednesday, Sept. 18, 2024, sellers have a fully hosted supply chain option where Amazon provides forecasting and optimization and manages the flows between supply chain services.
In addition, 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, is being connected with more fulfillment centers and transportation lanes to accelerate U.S. product delivery.
By the end of 2024, Amazon will quadruple AWD capacity in the U.S. to support growth in seller demand.
Amazon has also introduced Multi-Channel Distribution (MCD), which 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 Amazon) from a single inventory pool as a new feature for AWD.
The e-tailer is also now offering MCD users the ability to perform custom labeling, enabling sellers to distribute products in bulk to disparate sales channels including other marketplace services, wholesalers, distributors and sellers’ own physical stores.
In addition, the company is introducing new features for its Amazon Multi-Channel Fulfillment (MCF) solution which enables sellers to leverage its fulfillment network to pick, pack, ship and deliver their orders from channels beyond Amazon.com, including their own website, other e-commerce marketplaces, and social media channels.
New features include a reduction in the standard delivery option from five business days to three business days at no extra cost to the seller. In addition, sellers can now display a dynamic, real-time delivery estimate on their own website. These MCF “fast badges” give shoppers visibility into when they will receive the product early in their purchase process,
MCF users will also be able to provide delivery estimates in Google Shopping ads and search results and TikTok ads later in September.
Supply Chain by Amazon will be available to all U.S. sellers for domestic pickups in October 2024 and global pickups by year-end. Sellers can continue to choose which supply chain services they want to use and manage decisions on product movement on their own, or they can have Amazon automate the movement of products through these supply chain services with the fully-managed option.
To utilize the fully-managed solution, sellers provide product details and pickup locations and Amazon oversees the rest, including carrier pickup, inventory consolidation, strategic replenishment and placement into fulfillment centers nearest to customers, and continuous analytically-driven optimization based on demand, inventory levels and costs.
When sellers use this service, they qualify for AWD integrated rates, including a 25% discount on AWD storage fees and a 15% reduction in AWD transportation and processing costs.
According to Amazon, by using the fully-managed option and having Amazon manage delivery, third-party sales are increasing by an average of 20%. 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.
