Amazon appears to be eyeing more competition with traditional forwarders, launching a “fully automated” manufacturer-to-customer delivery service for third-party sellers.
Supply Chain by Amazon was announced at its annual seller conference, Accelerate, the e-commerce behemoth. Its VP of worldwide selling partner services, Dharmesh Mehta, said: “Providing our selling partners with a simple, fast, cost-effective solution to a challenge that has become increasingly unpredictable and complex is an important investment in sellers’ success.
“Supply Chain by Amazon will pick up seller inventory directly from the factory and manage the supply chain logistics through delivery to customer doorsteps.”
Amazon also claims a 25% saving on cross-border transport bound for its own warehousing and distribution, an 80% reduction compared with its Fulfilment by Amazon offering and the system would automatically replenish sellers’ stock levels to support expected demand.
However, one forwarder said: “It is basically what they [Amazon] do now with a courier business for micro-organisations selling on their platform. It is just rebranded and made to look sexier and more advanced.
“They will subcontract the majority of it to forwarders and transport operators and take their margin/profit, as they do with products in the main. It’s their model. They are a marketing machine. It may work 80% of the time for products sold on Amazon, but not in the real world.”
The launch of Supply Chain by Amazon follows recent announcements that appear to be geared towards upping Amazon’s ante in the logistics sphere, having contracted Hawaiian Airlines to operate 10 A330-300 converted freighters under a 10-year deal. The first aircraft entered service at the end of July, with a second due to come online before the year is out.
Further to this, and in what was seen as a major surprise, Amazon announced the integration of its Buy with Prime feature on Shopify in a seeming about-face from the latter, which had been seen to be positioning itself as a competitor to Amazon.