A new offering named “Supply Chain” has been introduced by Amazon for third-party sellers.
Amazon has unleashed a comprehensive supply chain service branded as Supply Chain, specifically designed for sellers. According to Amazon, this service promises to expedite and assure the delivery of products from manufacturers to customers. Meanwhile, giants in the e-commerce and retail sectors, such as Walmart, are likewise vying to provide sellers with distribution and fulfillment solutions. Wedbush analysts have posited that if Supply Chain achieves success akin to AWS, it could significantly boost Amazon’s revenue.
Amazon’s Supply Chain services aim to facilitate faster and more reliable product shipments for sellers by utilizing advanced machine learning and optimization techniques, building upon its existing logistics network and seller services.
In anticipation of its rollout to all sellers within the year, Amazon’s new Multi-Channel Distribution (MCD) service offers sellers the ability to transition products from Amazon Warehousing and Distribution (AWD) to any sales platform, from online stores to physical retail locations. Meanwhile, major competitors, including Walmart, strive to present third-party sellers with similar fulfillment and distribution options.
In the ever-competitive landscape of e-commerce, a staggering 22% increase in global online retail sales is predicted within the next two years, emphasizing the growing demand for efficient and speedy logistics solutions.
With a focus on cost advantages, Amazon has announced discounts for sellers opting for its services; these include up to a 25% reduction on all cross-border transportation heading to its AWD and the opportunity to store products in bulk at AWD with discounts reaching up to 80% when compared to Fulfillment by Amazon (FBA) storage charges.
The Financial Impact and Historical Context
Leveraging its pre-existing infrastructure, Amazon is not unfamiliar with the strategy of enhancing its business services. Their cloud computing service, initially crafted to bolster the e-commerce platform, has evolved into a pivotal profit source for the company. Reporting $22.1 billion in sales from AWS in the second quarter of 2023 signifies a 12% hike compared to the previous year.
Wedbush analysts noted that Amazon is emulating the AWS strategy by widening its fulfillment network’s reach. They described Supply Chain as representative of Amazon’s ongoing platform evolution, supporting the monetization of additional eCommerce and retail transactions through leveraging current infrastructures.