How Amazon is Shouldering Supply Chains for Sellers

Supply Chain by Amazon, an end-to-end, fully-automated set of supply-chain services, is set to provide sellers with a complete solution to quickly and reliably move products directly from manufacturers to customers. 

Amazon has worked to deliver this idea to revolutionise the supply chain landscape.

Now, it has been confirmed that the fully-managed, end-to-end Supply Chain by Amazon service is available to sellers.

Saving sellers time, effort and money

Supply Chain by Amazon is radically simplifying operations and optimising inventory placement, unlocking faster delivery speeds that are increasing sales by an average of 20%.

Sellers can leverage Amazon's advanced logistics, warehousing, distribution, fulfilment and transportation to move products from factories to customers faster than ever before, reducing shipping times and saving sellers time, effort and money.

Hundreds of thousands of sellers already use at least one of these Supply Chain by Amazon services, with adoption of multiple services tripling in the first half of 2024. Now, sellers have a fully managed option where Amazon provides forecasting, optimisation and manages the flows between these supply chain services.

Using Supply Chain by Amazon has been transformative for Amazon seller Steve Neufer, Co-Founder of Juvo+, which creates a range of quality products.

Steve says: "Having Amazon partner with us on our end-to-end supply chain has been a game changer that's great for our business.

"The speed and reliability of its logistics services have enabled us to keep our products in stock with less working capital while delighting customers with lightning-fast deliveries. Customers react strongly to being able to get a product same day or next day and we see our sales conversion roughly double."

Amazon: Taking on supply chain duties

Amazon's Fully-Managed Supply Chain solution, available to all US sellers for domestic pickups in October and global pickups by year-end, offers a comprehensive, turnkey approach to supply chain management.

Sellers can either choose specific services or opt for full automation, where Amazon handles everything from carrier pickup to inventory consolidation and strategic placement in fulfilment centres. 

This 'push-button' solution not only simplifies operations but also provides financial benefits, including discounted AWD rates and reduced processing costs. 

Leveraging Amazon's expertise, the service optimises product availability and delivery speeds, resulting in an average 20% increase in sales for sellers using the fully-managed option.

This improvement is primarily driven by faster delivery times, which significantly boost sales conversion rates.

Enabling sellers to delight customers

Supply Chain by Amazon will provide sellers with a fast and reliable solution that drives their business growth while being simple and freeing sellers from supply chain complexities, allowing them to save more time and money – all of which enable sellers to spend more time inventing amazing products and delighting customers.

"Becoming an expert in supply chain is not how sellers win," adds Steve.

"We win by making better products and delivering for the customer. Amazon is an expert in supply chain. Instead of shouldering every aspect of inventory, logistics and customs, Amazon is a great partner for businesses of all sizes because they help take that on for us.

"This frees up time and energy to focus on elevating brands, understanding customer needs and building great products; that's how sellers really win."

Maximising inventory efficiency

Amazon is rapidly scaling global logistics, enabling worldwide product movement from manufacturing hubs, across borders, through customs and arriving in destination countries.

Amazon moved more than 20,000 containers globally in August. In terms of domestic logistics, Amazon allows sellers to book transportation at up to 25% lower cost, compared to alternatives.

Domestic logistics services are now available in 19 countries and, in the US, sellers have used its domestic logistics services to send two billion product units into its fulfilment network since this time last year.

Amazon Warehousing and Distribution (AWD) is also speeding up the process from warehouse to fulfilment centres and transportations lanes, accelerating product delivery. In 2024, Amazon is quadrupling AWD capacity in the US to support explosive growth in seller demand.

Multi-Channel Distribution (MCD) is another new feature of Amazon Warehousing and Distribution (AWD) that streamlines the supply chain process for sellers. It allows them to maintain a single, unified inventory pool in AWD that can serve all their sales channels, rather than requiring them to allocate inventory to each channel in advance.

This approach offers greater flexibility and efficiency, reducing the risks associated with both overstocking (which can be costly) and understocking (which can lead to missed sales). By enabling sellers to distribute products in bulk across multiple sales channels from a centralised inventory, MCD significantly simplifies inventory management and optimises stock levels.

Sellers are finding that consolidating into a single pool in AWD reduces total stock needs by 20% on average  – a significant capital saving – and prevents stockouts, which means sellers also drive more sales.

MCD also launched the ability to do custom labelling, enabling sellers to distribute products in bulk to numerous different sales channels, including other marketplace services, wholesalers, distributors and sellers' own physical stores.

Check out the latest edition of Supply Chain Magazine and sign up to our global conference series – Procurement and Supply Chain LIVE 2024. 

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