Amazon Welcomes Competitors Into Its Supply Chain
Amazon is rolling out the welcome mat to its competitors, hoping to become every company’s one-stop fulfilment center regardless of origin or destination, Financial Times reported on Tuesday (Aug. 3).
The eCommerce giant said in a recent job posting that it worked hard to develop among “the most efficient and streamlined supply chains in the world” and wants to “redefine the way companies use our supply chain capabilities,” per FT.
Amazon added that it’s aiming to “fulfill customer requests from all over the world, regardless of where the transaction occurs.”
Fulfillment By Amazon (FBA) has a separate unit — Amazon Multi-Channel Fulfillment (MCF) — that offers packing and delivering services to eCommerce merchants that include Shopify, Etsy and even Walmart. Since 2019, Amazon’s MCF unit has doubled its capabilities, according to FT.
MCF launched more than a decade ago but now Amazon is upping its game and lowering prices to attract more businesses to use its logistics services instead of another company. Sellers still have the home field advantage of maintaining their own stock inventory while handing over the delivery aspect to Amazon.
Fulfilling and delivering merchandise for sellers that compete with the eCommerce behemoth gives Amazon further insight into what people buy worldwide. Amazon currently has an estimated 40 percent of the eCommerce space, per FT.
“It’s right on [Amazon’s] playbook,” Peter Kearns, former business development manager for Amazon fulfillment services, told FT. “They already have a great eCommerce infrastructure with millions of vendors and billions of units. It makes a lot of sense.”
Logistics analyst Marc Wulfraat told FT that in his estimation, Amazon has the potential to fulfil orders for some 7.5 billion packages this year, excluding third-party shippers like UPS.
Walmart currently has prohibited its sellers from using Amazon logistics because “it causes confusion” Carrie McKnight, a Walmart spokeswoman, told FT.
Amazon, however, has a work-around to bypass Walmart’s rule and gives sellers the option of storing merchandise in Amazon warehouses, and having the company process and package orders, but use an alternate delivery carrier.