Infographic of supply chain concept.

Supply Chain by Amazon: A Potential Game-Changer for Ecommerce

Ryan Faist

Ryan Faist, Channel Key

September 18, 2023

Of all the breaking news from Amazon Accelerate 2023, Supply Chain by Amazon is making the most waves. Supply Chain by Amazon is an end-to-end, fully automated set of services to help brands move products directly from manufacturers to customers. The program is designed to simplify supply chain management for all sales channels, including DTC websites and brick-and-mortar stores.

“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,” said Dharmesh Mehta, Amazon’s Vice President of Worldwide Selling Partner Services. “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.”

According to the retail giant, Supply Chain by Amazon will offer the following benefits to brands:

  • Keep Products in Stock
    FBA and Multi-Channel Fulfillment products are considered in stock and buyable when they’re received by Amazon Warehousing and Distribution, making it easier to meet customer demand.
  • Ship Faster and More Reliably
    Amazon’s advanced logistics, transportation, and fulfillment capabilities move products faster and more reliably from manufacturers to customers.
  • Lower Costs
    Amazon’s end-to-end solution enables brands to tap into a set of fully automated services that reduce overall costs.
  • Automate Inventory Replenishment
    Auto-replenishment gets your products to the right Amazon fulfillment centers in the right quantities, increasing the potential for same-day and next-day delivery speeds.
  • Streamline Your Entire Supply Chain
    With a hassle-free solution, brands can streamline global shipping, distribution, storage, and fulfillment.
  • Track Inventory at Every Milestone
    Use Seller Central to track and manage shipments, storage, and inventory.

Key Features of Supply Chain by Amazon

Supply Chain by Amazon leverages Amazon’s advanced logistics capabilities to keep products in stock, ship faster, and lower costs. With this program, Amazon 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.

One of the most important features of Supply Chain by Amazon is the new Multi-Channel Distribution capability, which enables brands to move products in bulk from Amazon Warehousing and Distribution to any sales channel (including online stores and physical store locations). This simplifies supply chain management and helps brands save on costs by consolidating inbound shipping. Multi-Channel Distribution is currently a pilot program and is expected to become available to all brands later this year.

Supply Chain by Amazon also offers the following additional key features:

  • Automatic Cross-Border Discounts for Amazon Global Logistics
    Amazon’s new prices now reflect discounts up to 25% on all cross-border transportation that is bound for Amazon Warehousing and Distribution, further reducing costs for selling partners using Supply Chain by Amazon.
  • Streamlined Domestic Inbound Transportation to Amazon Warehousing and Distribution with Partnered Carrier Program
    In addition to Amazon Global Logistics for cross-border transportation, brands will soon be able to use the Partnered Carrier Program to streamline domestic transportation into Amazon Warehousing and Distribution centers. Brands can count on reliable and fast transit times with trusted carriers at up to 25% lower costs compared to alternatives.
  • An Expanded Amazon Warehousing and Distribution Offering with Reduced Prices
    Amazon Warehousing and Distribution is now open to all selling partners, giving brands the ability to store in bulk at discounts of up to 80% compared to FBA storage fees. With no peak pricing during Q4, brands can more efficiently manage inventory levels, even during the holiday season.
  • Automatic Inventory Replenishment with FBA
    Amazon will now use its advanced machine learning and supply chain optimization capabilities to automatically replenish inventory into the optimal Amazon fulfillment centers to support expected customer demand.

How Supply Chain by Amazon works

Supply Chain by Amazon is a single solution that combines four powerful programs: Amazon Global Logistics, the Partnered Carrier Program, Amazon Warehousing and Distribution, and FBA. According to Amazon, doing so will increase efficiency, reduce storage costs, and unlock significant discounts.

Supply Chain by Amazon is designed to streamline supply chain management into three simple steps:

  • Send Products to Amazon
    Use Amazon Global Logistics to ship inventory in bulk to Amazon Warehousing and Distribution.
  • Store and Distribute Inventory
    Your products are stored with Amazon Warehousing and Distribution and become buyable the moment they’re received by Amazon distribution centers. Store inventory in bulk for as long as you need, keeping your products in stock and Prime-eligible with fast delivery speeds.
  • Fulfill Customer Orders
    Amazon uses the bulk inventory stored in Amazon Warehousing and Distribution to automatically replenish your products in the Amazon fulfillment network. When a customer places an order in the Amazon store, Amazon will pick, pack, and deliver it through Fulfillment by Amazon. If a customer places an order on your own website through Buy with Prime, or if they make a purchase on another enabled sales channel, Amazon will deliver through Multi-Channel Fulfillment.

Infographic showing infrastructure of Supply Chain by Amazon.

Channel Key Takeaway

Amazon prioritizes two things above all else: customer service and company growth. Supply Chain by Amazon aligns with both values. It enables ecommerce brands to replenish all their sales and fulfillment channels from a single inventory pool. From a broader perspective, the launch of Supply Chain by Amazon is further evidence that Amazon is focused on providing services to brands that sell outside of the marketplace. Specifically, Amazon emphasized it will continue to invest heavily in transportation, storage, and distribution services, as well as invent new technologies to help brands track and manage inventory from end to end with less effort.

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