Amazon has helped optimize and simplify the fulfillment and delivery needs of our selling partners for the better part of 20 years. Now, we are taking even more of the burden off sellers with the introduction of Supply Chain by Amazon, an end-to-end, fully automated set of supply chain services that will provide sellers with a complete solution to quickly and reliably move products from manufacturing locations to customers around the world. Sellers can now benefit from Amazon’s advanced logistics, warehousing, distribution, fulfillment, and transportation capabilities to keep products in stock, ship faster and more reliably, and significantly lower costs.
Let’s take a quick step back to talk about how we got to this exciting moment. In 2006, we started the journey to support our selling partners with their fulfillment needs with the creation of Fulfillment by Amazon (FBA). We launched FBA for two primary reasons. First, customers love having access to more and more products that they could get delivered quickly and reliably. FBA allowed us to pick, pack, and ship sellers’ products with faster speeds and better reliability, and customers loved this. Second, FBA offers our selling partners a simple solution to an often cumbersome and challenging process—it’s operationally intensive to receive an order, find the product, package it, drop it off for delivery, provide customer support, and handle returns—and do all of that quickly and reliably. Since the early days, FBA has become a very valuable service for our selling partners, offering a fast and reliable fulfillment service that is, on average, 70% less expensive than other fulfillment services. As a result, Amazon is now delivering the largest selection of products to U.S. Prime members at the fastest speeds ever. This includes 300 million unique products that are available with fast, free shipping, driving tremendous value for both customers and sellers.
While FBA significantly simplified one aspect of the supply chain process, the product journey starts much earlier than fulfillment—often starting with manufacturing. This process has also become increasingly complex and unpredictable for sellers, requiring them to invest significant amounts of time and resources to manage their supply chain. Over the years, we’ve released services that provide some of these broader supply chain capabilities, and now, we’re taking that support to the next level with a complete, end-to-end solution that will help sellers through their entire supply chain and across all their sales channels, including online and physical stores.
With Supply Chain by Amazon, 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—all without sellers having to worry about managing their supply chain. The new solution allows sellers to spend more time building great products, delighting customers, and growing their business, while Amazon handles the logistics, improves delivery speed, and reduces costs for sellers.
New capabilities are available now, and we have many more coming in the next few months. And we’re going to keep enhancing Supply Chain by Amazon for many years to come. Here are some key benefits of Supply Chain by Amazon.
Amazon Global Logistics (AGL) now with automatic cross-border discounts
Amazon Global Logistics is a streamlined solution that provides origin services, ocean freight shipping, customs clearance, and more. Starting in October, we are expanding our origin services closer to sellers’ factories, which will enable additional pick-up services for all our ocean products at key manufacturing hubs. Amazon Global Logistics offers all-inclusive pricing that covers customs clearance, unloading of freight, warehousing, storage, and local transportation to fulfillment centers. This unique pricing model gives sellers peace of mind, allowing them to pay for what they book without any surprise charges. Amazon’s new prices now reflect discounts of up to 25% on all cross-border transportation that is bound for Amazon Warehousing Distribution (AWD), further reducing costs for selling partners using Supply Chain by Amazon. AWD is Amazon’s low-cost storage service that provides sellers the ability to store their inventory in Amazon distribution centers and seamlessly distribute products in bulk.
Streamlined domestic inbound transportation to AWD with Partnered Carrier Program (PCP)
PCP provides similar services to AGL for product that starts its supply chain journey domestically. In addition to AGL for cross-border transportation, later this year, sellers can use PCP to streamline domestic transportation into AWD centers. Sellers can count on reliable and fast transit times with trusted carriers, at up to 25% lower costs compared to alternatives.
Expanded AWD offering with reduced prices
AWD is now open to all sellers, giving sellers the ability to store products in bulk at lower costs. We are also eliminating peak pricing for AWD in the fourth quarter, so sellers can more efficiently manage inventory levels, even during the holiday season. AWD rates are now up to 80% lower compared to FBA storage fees. Coming soon, sellers will also be able to reserve low-cost, long-term bulk storage months in advance at even deeper discounts.
New Multi-Channel Distribution (MCD) capability
Amazon’s selling partners sell across multiple sales channels, including online and physical store locations, and we recognize that keeping products in stock across a variety of channels is a challenge. To address this need, we’re launching MCD, a new capability that moves sellers’ products in bulk from AWD to any sales channel, allowing sellers to replenish across all their sales and fulfillment channels from a single inventory pool. This capability simplifies supply chain management and allows sellers to save on costs by consolidating inbound shipping. MCD also offers sellers the benefit of billions of dollars of investment in Amazon’s distribution network and technology, allowing sellers to maintain the right inventory levels across their sales channels and ultimately grow their business. Currently, MCD is running as a pilot program with an initial set of sellers, and it’s expected to be available to all sellers later this year.
Automatic inventory replenishment with Fulfillment by Amazon (FBA)
In addition to the cost savings through AWD, sellers will now have the opportunity to leverage Amazon’s advanced machine learning and supply chain optimization capabilities to automatically replenish inventory into the optimal Amazon fulfillment centers. This better supports expected customer demand, and allows sellers to benefit from even faster speeds from FBA and deliver customer orders for off-Amazon channels through Multi-Channel Fulfillment (MCF). Placing sellers’ products in the right quantities at the right locations to meet customer demand increases the potential for Same-Day Delivery and Next-Day Delivery speeds, which in turn drives an average 15% increase in FBA unit sales.
Our vision has always been to make it as easy as possible for sellers to serve customers around the world. With Amazon taking on even more of the supply chain and operational complexities on behalf of our selling partners, we are excited to help them save more money, drive more business growth, and have more time to continue inventing amazing products for customers.
When sellers partner with Amazon, they benefit from powerful, cost-effective solutions that leverage our scale and technology, and we’re excited to bring them Supply Chain by Amazon as our newest innovation to support their growth.
