Amazon offers sellers long


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Aug 24, 2023

Amazon offers sellers long

AWD allows Amazon to capture more value from its fulfillment network, which has

AWD allows Amazon to capture more value from its fulfillment network, which has grappled with excess capacity this year after aggressively expanding its warehouse footprint in 2021 to meet heightened e-commerce demand. At the same time, other businesses have been scrambling to secure more U.S. warehouse real estate — at elevated prices — to bolster their safety stocks and account for spending growth.

Integrating storage operations with Amazon's fulfillment network will help sellers reduce costs while ensuring they have the necessary items in stock at the right place and time, said Pillai.

"With this simple pay-as-you-go service, sellers are free from the time-consuming, cumbersome process of moving inventory from upstream facilities to Amazon fulfillment centers," he said.

The service's announcement comes as competitors like Shopify, American Eagle and Maersk nip at Amazon's heels in various aspects of the supply chain, said Rick Watson, founder and CEO of RMW Commerce Consulting, in a LinkedIn post.

"This removes some oxygen from the room in this space," Watson said. "At this point, no one carries more parcels than Amazon, ensuring they continue to extend their lead rather than rest on their laurels to leverage their volume and tremendous investments."

Amazon will likely have lower storage rates than competitors as it leverages the high volume already flowing in its network to drive down cost per square foot, Watson added.

Amazon will share more information about AWD at the company's annual seller conference, Amazon Accelerate, taking place Sept. 14-15, according to Pillai.

Correction: A previous version of this story misstated when AWD would be available to sellers. The service is available now and will expand in 2023.