Supply Chain by Amazon was announced at the Amazon Accelerate 2023 conference. This program is an extension of the already existing fulfillment options available to Amazon sellers. This suite of fulfillment services allows sellers to integrate their supply chain end-to-end from factories and suppliers to distribution centers to delivery options to the end customer. Supply Chain by Amazon will help you keep products in stock, ship faster and more reliably to the end customer, and lower costs relative to alternative methods. Amazon customers expect in-stock and fast delivery, this program enables sellers to meet those demands. Enrolling in Supply Chain services allows you as the seller to focus on your strengths like product development, while outsourcing logistics, shipping and fulfillment to Amazon, which is their strength. This post will cover the different components of the supply chain including freight & logistics, storage & distribution, replenishment & fulfillment, and customer delivery.
Freight and Logistics
A common issue we see many sellers face when it comes to logistics is how to send products from your supplier and import them into the US. Logistics is an industry filled with a lot of jargon and acronyms (bill of lading, FTL, FOB) that can make international and local fulfillment time-consuming to understand and manage. On top of that, it can seem like a black hole when you place an order and hopefully, your products arrive undamaged but with no clear understanding of where the products are or when they will arrive. With Amazon’s new offer of Amazon Global Logistics to third-party sellers, you are able to ship ocean cargo from China directly to Amazon fulfillment centers and into the Amazon network. Amazon takes on the complicated steps and streamlines the process of picking your product up from your international manufacturer, handling export and customs clearance, shipping through freight, the process of import customs clearance, and delivery to Amazon fulfillment centers. This entire process is managed, booked, paid, and tracked directly in Seller Central so you do not have to manage multiple platforms to keep the process simple and manageable. With Amazon being one of the largest shipping providers in the world, you can take advantage of reduced landed costs and competitive rates offered which reduces costs and increases your profits.
Storage and Distribution
The next step in the supply chain, once inventory is sent from overseas manufacturers through Amazon Global Logistics is to send products to bulk storage and prepare for Multi-Channel distribution.
Amazon Warehousing and Distribution (AWD)
Amazon Warehousing and Distribution (AWD) is the upstream bulk inventory storage solution for third-party sellers. This is more cost-effective than holding all inventory as active inventory available at Amazon Fulfillment Centers. Costs are subject to change, but currently, AWD storage saves sellers 51% during non-holiday months and 82% savings during the holiday season. Currently, AWD only holds and ships your inventory to Fulfillment by Amazon Fulfillment Centers. This process can be done automatically with automated rule-based action to ensure your FBA inventory is always in stock for your customers.
Multi-Channel Distribution (MCD)
The program is not currently available, but soon Amazon will be launching Multi-Channel Distribution (MCD). MCD will allow sellers to send inventory from AWD long-term storage to either their own seller warehouse or allow order fulfillment for other sales channels. Multi-Channel distribution will be a great solution for Amazon sellers that do business outside of Amazon including wholesalers, suppliers, other storage providers, and even fulfilling other vendors.
Replenishment and Fulfillment by Amazon (FBA)
Fulfillment by Amazon (FBA) has been the hallmark order fulfillment option for sellers on Amazon that offers Prime eligibility and fast reliable shipping to customers. AWD inventory gets automatically sent to the FBA distribution network to have coverage for order fulfillment to meet those fast shipping times for customers. With this program, sellers can still manage their own shipments for sending inventory to Amazon FBA. When inventory is at Fulfillment Centers and orders come through, the pick, pack, and delivery process is all handled by Amazon and charged to you as an FBA Fee.
Customer Receiving Order
The final step is the end customer actually receiving the order. Customers who shop on Amazon can receive their orders directly from the FBA offer. If your customer is shopping on a different platform, you can ship directly to the customer and they can receive the order through Multi-Channel fulfillment. So no matter where your customer shops, the Supply Chain by Amazon service can be your one-stop solution for customers receiving orders.
FAQ - Frequently Asked Questions about Supply Chain by Amazon
What is Supply Chain by Amazon?
Supply Chain by Amazon is the name of the program where 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.
What are the benefits of Supply Chain by Amazon?
Benefits to sellers for Supply Chain by Amazon include a unified view of inventory at each level of the supply chain, faster shipping to the end customer, and lower shipping costs.
How can I ship my products from my Chinese manufacturer to US FBA?
You can ship your products from your Chinese manufacturer to US FBA by utilizing the Supply Chain by Amazon to ship your freight overseas, import the products, and process them in to FBA centers.
What categories are eligible for Amazon Warehousing and Distribution (AWD)
Currently, the available categories for Amazon Warehousing and Distribution (AWD) include: Automotive and Powersports, Baby Products (excluding apparel), Beauty, Books, Camera and Photo, Collectible Coins, Consumer Electronics, Entertainment Collectibles, Fine Art, Health and Personal Care, Home and Garden, Independent Design, Industrial and Scientific, Kindle Accessories and Amazon Fire TV Accessories. Categories NOT available at this time include: Amazon devices, Gift cards, Grocery, High-value products, Jewelry, Shoes, Watches, and Apparel.
What countries can Amazon Global Logistics export from?
Currently, Amazon Global Logistics can only export inventory from China.
Can I enroll in an individual Supply Chain by Amazon services?
Yes, you can enroll in an individual Supply Chain by Amazon services. For example, you do not need to utilize Amazon Global Logistics for importing, but you can opt in to Fulfilled by Amazon.
What countries can Amazon Global Logistics import into?
Currently, Amazon Global Logistics can import inventory into the US, UK, and European markets.
Conclusion
Supply Chain by Amazon enables Amazon sellers to spend less time on moving inventory and more time on product development, chatting with customers and growing their business. Having an end-to-end supply chain solution from freight & logistics, storage & distribution, replenishment & fulfillment, to customer delivery makes a formerly complicated, costly, and confusing process a more streamlined, and straightforward process at a fraction of the cost. Your customers will be delighted that inventory is in stock and satisfied with the delivery promise offered. If you have any questions about Supply Chain by Amazon or anything related to selling on Amazon, please contact us to discuss how we can help.
About the Author - Eric Sutton
This post was written by Eric Sutton. Eric is an Operations Manager of Goat Consulting and is thankful for the opportunity to work with and learn from brands and manufacturers selling on Amazon. Eric can help navigate the complexities of the Amazon Supply Chain to ensure your customers receive their orders on time and simplify the complexity of inventory management.