- A new Amazon service will allow third-party sellers to use its fulfillment centers for long-term inventory storage, the company has announced. in a blog post on Wednesday.
- Through Amazon Warehousing & Distribution (all-wheel drive), sellers can use the company’s new facilities for bulk storage and automated distribution, according to the message written by gopal pillai, vice president of Amazon Distribution and Fulfillment Solutions. Sellers can use all-wheel drive in 2023.
- Storing inventory in fulfillment centers will allow sellers to “seamlessly restock” their inventory in Amazon’s fulfillment network, Pillai said. They will also be able to send inventory to any location, including wholesale customers or physical stores, and will be able to consolidate their global inventory to manage on the Amazon Seller Central platform.
Overview of the dive:
all-wheel drive enables Amazon to extract more value from its distribution network, which has struggled with excess capacity this year after aggressively expanding its warehouse footprint in 2021 to meet increased e-commerce demand. At the same time, other companies have scrambled to secure more US warehouses — at high prices — to bolster their safety stocks and accommodate growing spending.
Integrating warehouse operations with Amazon’s fulfillment network will help sellers reduce costs while ensuring they have the needed items in stock in the right place at the right time, said Pillay.
“With this simple pay-as-you-go service, sellers are freed from the cumbersome and cumbersome process of moving inventory from upstream facilities to Amazon fulfillment centers,” he said.
The announcement of the service comes as competitors like Shopify, American Eagle and Maersk hound Amazon in various aspects of the supply chain, said Rick Watson, founder and CEO of RMW Commerce Consulting, in a LinkedIn post.
“It takes a bit of room oxygen out of that space,” Watson said. “At this point, no one carries more packages than Amazon, which ensures they continue to extend their lead rather than resting on their laurels to leverage their volume and huge investments.”
Amazon will likely have lower storage rates than its competitors as it leverages the high volume already flowing through its network to reduce cost per square foot, Watson added.
Amazon will share more information about AWD at the company’s annual seller conference, Amazon Accelerate, which takes place September 14-15, according to Pillai.