Amazon’s upstream storage is a new program the company is testing with FBA sellers to streamline inventory replenishment at its fulfillment centers.
One page on its website refers to the program as Amazon Distribution, and in seller messaging refers to it as STAR. “Our system will automatically replenish inventory from upstream storage to Prime-ready distribution centers. The benefits are described as low-cost bulk storage with automatic FBA replenishment and simple, pay-as-you-go pricing.
For now, the program appears to be targeting sellers bringing in inventory from China and Hong Kong using shipping through Amazon Global Logistics.
We learned about Amazon’s upstream storage program from an article by Ed Rosenberg, Founder of the Amazon Sellers Group (ASGTG.com), which led us to the description of the program at Amazon Seller Center.
A news article last month reported on a 517,000 square foot warehouse in Minnesota as an “inbound receiving center.” Business journal these observers told him that “Amazon has recently focused on building inbound reception centers, which sit upstream from fulfillment centers and act as a buffer between Amazon suppliers and larger fulfillment centers and costly, taking and storing shipments of goods until needed. . “
Making more storage available up front can help solve supply chain issues and could make distribution centers more efficient. Amazon says, “If your product has enough stock in upstream storage, customers can still search and purchase the product even if it is out of stock at Prime-ready fulfillment centers.
In a screenshot of the information sellers said they received, Amazon said storage costs were on average 47% to 63% lower than its fulfillment centers.
The program uses a data science model that triggers the replenishment of Prime-ready distribution centers so that merchant products remain in stock. One major drawback is that merchants cannot move their inventory to destinations other than Amazon. “Currently, Amazon’s upstream storage can only be replenished at Prime-ready fulfillment centers. “