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  • Stuart White

Amazon launches new distribution scheme

Amazon has announced details of a “multiyear investment” into a new warehouse and distribution programme.

The company states that: “Amazon Warehousing & Distribution provides low-cost, long-term storage that gives sellers the option to store their inventory in Amazon distribution centres and seamlessly replenish to fulfilment centres.

“As a continuation of Amazon’s multiyear investment in its warehousing and distribution network to support sellers and better serve customers, we are introducing a new solution that enables sellers to use new, purpose-built facilities for bulk inventory storage and automated distribution.

“Amazon Warehousing & Distribution (AWD) addresses critical supply chain challenges and helps sellers grow and manage their business while significantly cutting costs.”

So how will the scheme work? Thompson and Holt managing partner Stuart White looks at some of the detail.

White explained: “Amazon discussed further details of AWD at their annual seller conference this week. In essence, this is a pay-as-you-go service that Amazon believes will free up significant time for Sellers to focus on other areas of their business. It allows sellers to ship inventory to ‘new, purpose-built facilities for bulk inventory storage and automated distribution’.

“Amazon claims that customers will be able to send inventory to ‘any location’, including wholesale customers and brick-and-mortar stores, beginning next year. Automated replenishment and master case handling are seen as being key elements of the programme.

“Sellers will also have the option to integrate their upstream inventory storage into Amazon’s fulfilment warehouses. That means they could outsource inventory distribution to Amazon, which will ensure that the right products are in the right places, at the right times.

“AWD will allow Sellers to consolidate their global inventory, which they can then view and manage on Seller Central, simplifying their operations with one pool of inventory.

“Of course there will be a fee for this depending on the size of your involvement, and some critics have already seen it as further monopolising its entire supply chains.

“It’s interesting to note as well that this announcement has come at the same time that Amazon has closed or cancelled the building of a host of warehouses around the country, something that was blamed on overbuilding in 2020 and 2021.

“Amazon must still be confident that it has the capacity to deliver what it is promising without those build, and it’s important to understand that they are continuing to expand, just perhaps at a slower rate than they had planned for pre-Covid; something many businesses have had to do.

“As always at Thompson and Holt, we would recommend that you gather as much information as possible about AWD and apply it to your own business and its situation before making any decisions. While this could undoubtedly work for some Sellers, it might not be suitable for others.”

If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.

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