Amazon Supply Chain: Why is it important to the sellers?
No matter what your business size is; to step up the ladder of success every seller must know how to scale supply chain strategy. While there are a plethora of components that have contributed to the success of Amazon sellers, Amazon supply chain strategy is the most critical one.
Amazon’s supply chain has not only activated seamless operations but also cent per cent efficiency. Amazon has an advanced supply chain, even has launched their delivery network and comprises the whole logistics. Therefore, every Amazon seller must know how to optimize its supply chain models to function quickly and efficiently.
There are chances you might have heard this term the first time, but don’t fret. In this article, we’ll educate you about the fundamental operational elements of the Amazon supply chain and everything you need to know about it.
What is the Amazon supply chain?
Amazon supply chain basically concerns Amazon’s entire process from product warehousing to inventory management, pricing, delivery, and many more. Amazon has optimized each of these elements quite well, to ensure that everything is working without a hitch and effortlessly.
It is an interesting fact that Amazon’s supply chain in the current times is basically the same as it was when launched. This whole chain is on a much larger scale and backed by technological innovations. Even if you are a smaller e-commerce business or Amazon seller you must optimize your supply chain models to operate seamlessly and effectively.
The Amazon supply chain tremendous success entails strategic planning which allows fast product delivery from the warehouse to the customer.
Amazon Supply Chain Process
The Amazon supply chain management process is divided into four important operational factors which are determined by speed and efficiency.
- Warehousing
- Delivery network
- Technology
- Manufacturing
1. Warehousing
Amazon strives to ensure that products sold on its marketplace are readily available at any time from anywhere. All Amazon’s warehouses are situated near a large population area. They have well-formed communications and logistics networks, allowing them to transport products from one place to another.
Amazon warehouses have everything that is also strategically organized and has five storage areas. The global presence, essentially established near major metropolitan areas, shows distribution and inventory control, allowing the company to settle orders for customers at a lesser cost rapidly.
Amazon merchants can leverage the company’s vast fulfilment network for their services via the Fulfillment by Amazon (FBA) program, which involves sellers shipping their products to Amazon fulfilment centers to pick, pack, and ship orders and provide any necessary customer support. In addition, Amazon also offers its FBA Onsite program, a combination of FBA and Seller-Fulfilled Prime (SFP), in which Amazon optimizes the seller’s warehouse with its warehouse management software. In contrast, Amazon is liable for picking up orders from a seller’s repository and determining the most efficient fulfilment method.
2. Delivery Network
Ever since Amazon has collaborated with different transportation methods and delivery partners to match up with demand and advisability. Amazon-branded trucks take orders from fulfilment centres to distribution centres, where orders are distributed by area and essential delivery.
Amazon’s fast delivery services are one of the reasons behind the gigantic success of Amazon. Amazon’s two-day delivery window for Prime members uses a fleet of trucks, vans, bikes, to fulfil delivery of orders of one- to the two-hour window and one-day delivery for Prime members.
The Delivery Service Partners program tactically extends Amazon’s delivery network, with partners operating. To run this smoothly delivery executives get training and ongoing support and a key client for their delivery business Amazon.
3. Technology
Undoubtedly, Amazon has a gigantic network of employees and enables the sellers to carry out fast deliveries. Hence, nothing can be achieved without the help of an innovative technology and automation solution that guarantees smooth process and performance.
Amazon uses self-regulating pick and packs orders and stacks and stores inventory in its warehouses and fulfilment centers. The Amazon supply chain management technique is to include technology. The company employs numerous automation and robotic solutions, both to pick and pack orders as well as stacking and storing inventory. The company has also embraced the new technology of drones as well.
Using Amazon’s supply chain management not only involves technology but also understanding the technology’s automation. These automation solutions help in picking and packing orders and delivering them to the customers. Technology encourages Amazon in fulfilling orders at the earliest possible. Customers who want to take advantage of using this program need unique Amazon landing networks.
4. Manufacturing
Amazon collaborates with third-party sellers. Nevertheless, the company has found out that they can provide all these products for cheaper rates and earn more profit if they order their acquisitions. Manufacturing low-cost products and white-labeling products from third-party sellers have become part of the Amazon supply chain strategy.
They immediately offer branded businesses anything from products, and the list is constantly growing. Manufacturing products allows Amazon to have a command over the whole cycle of creating and marketing products they produce, store, and ship to customers.
Amazon seller faces some challenges to face :
1. Its merger, which could be a threat to the regulator
2. The cost of transportation for the total distance to make delivery accessible to all
3. Number of employees concerning its number of robots
4. The customer experience of its market place because of an oversupply
5. Oversupply of stock spoils customers and hence make them able to make a purchasing decision
Final Words
Amazon marketplaces are one of the world’s largest e-commerce websites. Hence, building an innovative supply chain demands tremendous investment. By incorporating Amazon supply chain strategies in Amazon and continuously optimizing functional methods. A seller can expand its network and reach and increase the convenience of any business’s bottom line.
If you are an online Amazon seller, then you must have an intelligent tool that will guide your business towards success by targeting the brand story, right keyword, products research, analyzing competitors, and so much more. Get your ticket to success today!