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Amazon announced on September 18, 2024 that it has launched a new fully managed supply chain service (Supply Chain by Amazon) for sellers. The new service will provide domestic pickup options to US sellers starting in October and will be expanded to global pickup by the end of the year. According to Amazon's blog post, sellers only need to provide product details and pickup locations, and Amazon will take care of all subsequent work, including carrier pickup, inventory integration, strategic replenishment, and placing the goods in the fulfillment center closest to the customer. In addition, Amazon will continue to optimize based on demand, inventory levels, and costs. “It’s as easy as clicking a button, and sellers can gain working capital benefits, increase sales, and significantly reduce administrative work,” said Dharmesh Mehta, vice president of Amazon’s global selling partner services. Sellers who use this fully managed service have seen an average sales increase of 20%.
Sellers can choose to use this fully managed supply chain service, or continue to select and manage the supply chain services they need. Amazon's supply chain service enables sellers to use the company's logistics, warehousing, distribution, fulfillment and transportation services to transport products from manufacturers to customers.
In addition to the fully managed option, Amazon is also launching a few other new features for supply chain services:- Multi-Channel Distribution (MCD): Allows sellers to replenish in bulk from AWD to any sales channel (including online stores and physical stores), supporting a single inventory pool across all channels.
- Free increase in MCF standard delivery time: from 5 working days to 3 working days at no extra charge.
- Display dynamic real-time delivery estimates on the online store.
Hundreds of thousands of sellers are already using at least one of these services, and the number of sellers using multiple services at the same time has tripled in the first half of 2024. Mehta emphasized that with Amazon's many years of supply chain expertise, fast delivery will significantly increase sellers' sales conversion rates. Further reading: Integration of Amazon’s fully managed supply chain services with existing FBA services Amazon's fully managed supply chain service (Supply Chain by Amazon) is closely integrated with the existing FBA (Fulfillment by Amazon) service to provide sellers with more efficient and simplified logistics solutions. The following are the key points of the two services working together: Automated inventory replenishment The newly launched fully managed supply chain service will use Amazon's advanced machine learning and supply chain optimization technology to automatically replenish inventory to the best Amazon fulfillment center. This means that sellers can not only enjoy the fast delivery service provided by FBA, but also achieve more efficient inventory management through the fully managed option to meet customer needs. This automated replenishment will increase the possibility of same-day and next-day delivery, thereby driving sales growth. Simplify the operation process The fully managed supply chain service also supports Multi-Channel Distribution (MCD), allowing sellers to replenish multiple sales channels (including online stores and physical stores) from a single inventory pool. This integration allows sellers to manage inventory more flexibly, avoid cost losses caused by excess or insufficient inventory, and thus improve overall sales efficiency. Multi-channel distribution support The fully managed supply chain service also supports Multi-Channel Distribution (MCD), allowing sellers to replenish multiple sales channels (including online stores and physical stores) from a single inventory pool. This integration allows sellers to manage inventory more flexibly, avoid cost losses caused by excess or insufficient inventory, and thus improve overall sales efficiency.
By using the fully managed option, sellers are able to enjoy lower storage fees and shipping costs. For example, Amazon offers up to 25% discount on storage fees and 15% reduction on shipping costs, which makes using fully managed supply chain services more economical than traditional FBA. The integration of Amazon's fully managed supply chain service with FBA not only improves logistics efficiency, but also provides sellers with more flexible and cost-effective solutions, enabling them to better meet customer needs in a highly competitive market. This may also be Amazon's response to the rise of several Chinese platforms such as Shein, Temu, and Aliexpress.
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