On 31 August 2022, Amazon announced the company’s upcoming service, Amazon Warehousing and Distribution. This service is introduced to tackle the supply chain issue. Amazon is aiming toward improving seller store bulk inventory and hassle-free distribution.
With the facilities provided, the seller will be able to ship their goods to any location. Not only this, they can even send inventory to wholesale customers or any offline stores. The company further said the seller will enjoy this service in 2023
At Amazon you only pay for the service you use, it helps your business to remain agile, responsive and always able to catch up with demands. Pay-as-you-go pricing enables sellers to readily adapt to changing business requirements without affecting budgets. This also improves your attitude to business growth and transitions. With a pay-as-you-go model, you can easily adjust your business according to the need without depending upon forecasts. Thus, the service helps reduce the risk of missing capacity.
When you pay for the service only as per the requirements, it reduces the procurement complexity. This way you can focus more on innovation and inventions and can do business at your ease.
The upcoming modified pay-as-you-go service will further help the sellers greatly by cutting logistics costs. Although they didn’t open up about the specifics, the company said Amazon Warehousing & Distribution focuses strictly on supply chain challenges and supports sellers to grow and smoothly operate their business in a low-cost way. This development comes after Amazon has caused a delayed opening of warehouses to control the costs.
The Storage Limits Of Amazon Inventory
Amazon established a limit to the seller inventory storage to efficiently manage the fulfilment centre storage. This inventory storage limit is the maximum number of inventory units that can be kept in the Amazon Fulfilment Centre by the sellers. FBA sellers must make sure their inventory level is below the storage limit.
The inventory storage limit of the seller is mandated to change on the first of each month. Factors considered for calculations are sales, and available space at the applied Amazon FC.
Amazon Warehousing & Distribution : Promise of Reality
The purpose of Amazon by introducing the bespoke service is to expand its warehouse logistics business. Amazon will soon offer to store a seller’s inventory in bulk and dispatch it anywhere in the world. For this service, Amazon will automatically replenish its own FBA fulfilment centres so it could be sent to the retail stores.
The previous year, Amazon had started testing a program called “Amazon’s upstream storage” that was specifically run for storing goods. Amazon’s upstream storage program was tested with FBA sellers to facilitate inventory replenishments in Fulfilment Centers. We can say that, instead of the direct delivery of inventory to the Amazon Fulfilment Centers, the sellers can send them to Distribution Centres which have a low-cost rate for large quantities.
Working toward the availability of bigger storage upstream might help tackle the supply chain issues and even make the fulfilment centre more efficient. Amazon states that, if the seller product has enough inventory in the upstream storage, their customers can still buy the product even if the product is out of stock in the fulfilment centre.
Now, the new program Amazon Warehousing & Distribution, also known as AWD – takes this vision much further. In the updated version, the sellers operating AWD can combine their global inventory. With Seller Central, they can easily monitor and manage their inventory all around the world with one pool of inventory.
Gopal Pillai, Vice President of Amazon Distribution and Fulfilment Solutions, recently announced the new service and said Amazon would be sharing more information about AWD and “many other new offers” here.
The annual seller conference will take place on September 14-15, where Amazon expects thousands of sellers to attend. According to him, “supply chain as a service” is now a reality thanks to AWD. And claimed that it had been especially developed to address inventory management problems and provide operational efficiencies. At the Accelerate conference, Amazon will reveal AWD’s pricing, fees, and additional details.
