Amazon has officially launched its highly anticipated “Supply Chain by Amazon” service, marking a pivotal shift in the way sellers handle logistics, inventory, and fulfillment. This comprehensive suite of services is designed to streamline the supply chain process from manufacturer to customer, allowing sellers to harness Amazon’s extensive logistics infrastructure and cutting-edge automation to scale their businesses efficiently.
Simplifying Logistics to Boost Sales
According to Dharmesh Mehta, Amazon’s Vice President of Worldwide Selling Partner Services, the launch of Supply Chain by Amazon is already having a profound impact. By optimizing inventory placement and expediting delivery speeds, sellers are reporting an average sales increase of 20%.
Mehta explained that Supply Chain by Amazon offers a seamless, end-to-end solution. Sellers can take advantage of Amazon’s logistics, warehousing, distribution, fulfillment, and transportation services to move products from factories to consumers faster than ever before. This means significant reductions in shipping times and operational costs for sellers.
“Hundreds of thousands of sellers are already leveraging these services,” said Mehta, “with adoption rates of multiple Supply Chain services tripling in the first half of 2024.”
Key Features of Supply Chain by Amazon
Among the standout features of Supply Chain by Amazon are:
- Cost-effective transportation: Sellers can access domestic logistics services in 19 countries, often at up to 25% lower cost compared to alternatives. U.S.-based sellers alone shipped 2 billion product units through Amazon’s fulfillment network over the past year.
- Expanded warehousing capacity: Amazon quadrupled its U.S. Amazon Warehouse and Distribution (AWD) capacity this year to accommodate the growing demand from sellers. This allows products to be stored in bulk and quickly replenished at fulfillment centers, ensuring faster delivery to customers.
- Multi-Channel Distribution (MCD): This newly introduced feature enables sellers to manage a unified inventory pool in AWD, serving all sales channels from a single stock. This consolidation reduces total stock needs by an average of 20%, streamlining the supply chain and boosting efficiency.
- Fully-Managed Supply Chain by Amazon: Available for U.S. sellers starting in October, with global availability by the end of the year, this feature allows sellers to either manage their supply chain themselves or opt for Amazon’s fully-automated solution. With this option, Amazon handles everything—from carrier pickup to strategic replenishment at fulfillment centers, using data-driven optimization based on demand, inventory levels, and costs.
A Game-Changer for Sellers
Rick Watson, CEO of RMW Commerce Consulting, highlighted how transformative this offering is for sellers, particularly smaller businesses using Fulfillment by Amazon (FBA). He noted that Amazon’s unparalleled reach and logistics expertise set it apart from competitors.
“Amazon has essentially cracked the code on supply chain automation. For smaller sellers, this is a game-changer,” Watson explained. “The service offers capabilities that no other provider—whether Shopify or Flexport—can match, particularly in terms of scale and cost.”
As Amazon continues to innovate and expand its offerings, Supply Chain by Amazon is poised to redefine logistics for sellers worldwide, providing them with an all-encompassing solution that frees them from supply chain complexities and empowers them to focus on growing their businesses.
Conclusion
Amazon’s latest move with Supply Chain by Amazon gives sellers access to an unmatched logistics ecosystem that not only cuts down on costs but also speeds up the entire process from production to customer delivery. With this rollout, Amazon has once again solidified its position as a leader in e-commerce logistics, setting new benchmarks for efficiency and innovation. For sellers, this launch could mean faster growth, reduced operational headaches, and more time to focus on what matters—delighting customers.
