In the ever-evolving world of ecommerce, staying ahead of the game is essential for sellers looking to thrive in a competitive marketplace. Amazon, the ecommerce giant, has recently introduced a groundbreaking initiative known as “Supply Chain by Amazon” This development promises to revolutionize the way sellers manage their operations, offering a comprehensive end-to-end supply chain management solution.
In this blog post, we’ll dive deep into this transformative service, decode its intricacies, and shed light on what sellers need to know to make the most of it.
SCA is Amazon’s strategic response to the growing complexity of ecommerce logistics. The service empowers sellers by providing an integrated suite of tools and resources to streamline their supply chain operations. Whether you’re a seasoned seller or just starting out, SCA offers solutions to enhance your efficiency and competitiveness.
Key Benefits of Supply Chain by Amazon
So, what’s in it for ecommerce sellers? SCA directly impacts how sellers manage their businesses on Amazon and beyond. By leveraging this service, sellers can expect improvements in order fulfillment, inventory management, and customer satisfaction. The days of grappling with supply chain complexities are over, as SCA has the potential to greatly simplify the process and enables sellers to focus on their core competencies.
- Automatic cross-border discounts for Amazon Global Logistics (AGL): Amazon’s new prices now reflect discounts up to 25% on all cross-border transportation that is bound for Amazon Warehousing and Distribution (AWD), further reducing costs for selling partners using SCA.
- Streamlined domestic inbound transportation to AWD with Partnered Carrier Program (PCP): In addition to AGL for cross-border transportation, later this year sellers can use PCP to streamline domestic transportation into AWD centers. Sellers can count on reliable and fast transit times with trusted carriers, at up to 25% lower costs compared to alternatives.
- An expanded AWD offering with reduced prices: AWD is now open to all selling partners, giving sellers the ability to store in bulk at discounts of up to 80% compared to Fulfillment by Amazon (FBA) storage fees. With no peak pricing during Q4, sellers can more efficiently manage inventory levels, even during the holiday season. Coming soon, sellers will also be able to reserve low-cost, long-term bulk storage months in advance at even deeper discounts.
- A new Multi-Channel Distribution (MCD) capability: MCD moves sellers’ products in bulk from AWD to any sales channel (including online stores and physical store locations), allowing selling partners to replenish across all their sales and fulfillment channels, not just on Amazon, from a single inventory pool. MCD is currently in pilot with an initial set of sellers and is expected to be available to all sellers later this year.
- Automatic inventory replenishment with FBA: In addition to the cost savings through AWD, Amazon will now use its advanced machine learning and supply chain optimization capabilities to automatically replenish inventory into the optimal Amazon fulfillment centers to support expected customer demand, allowing sellers to benefit from even faster speeds from FBA and deliver customer orders for off-Amazon channels through Multi-Channel Fulfillment (MCF). Placing sellers’ products in the right quantities and the right locations to meet customer demand increases the potential for same-day and next-day delivery speeds, which in turn drives an average 15% increase in unit sales.
How is Supply Chain by Amazon a new era for sellers?
SCA is a new era for sellers because it provides them with a one-stop solution for all of their supply chain needs. Sellers can now offload the complexity of managing their supply chain to Amazon, and focus on what they do best: building great products and growing their business.
SCA also offers sellers a number of significant advantages, including:
- Reduced costs: SCA can help sellers to significantly reduce their supply chain costs, through discounts on cross-border transportation, domestic inbound transportation, and AWD storage.
- Increased speed and reliability: SCA can help sellers to increase the speed and reliability of their deliveries, by automatically replenishing inventory into the optimal Amazon fulfillment centers and using reliable carriers.
- Simplified supply chain management: SCA simplifies supply chain management for sellers by providing them with a single solution for all of their supply chain needs.
Amazon’s competitors are likely to be concerned about the launch as it is a significant development that is likely to give Amazon a significant advantage in the ecommerce market.
SCA offers Amazon sellers a number of advantages over traditional supply chain management methods, including reduced costs, increased speed and reliability, and simplified supply chain management. This could make it more difficult for competitors to compete on price, speed of delivery, and customer service.
Competitors are likely to react to SCA in a number of ways. Some may choose to try to develop their own supply chain solutions – or partner – in order to compete with Amazon. Others may choose to focus on other aspects of their businesses, such as product selection or customer service.
Here are some specific ways that Amazon’s competitors could react to SCA:
- Invest in their own supply chain infrastructure and capabilities. This could include building their own warehouses, developing their own transportation networks, and investing in new technologies such as robotics and automation.
- Partner with third-party logistics providers. This could allow competitors to access the expertise and resources of third-party companies to improve their supply chain efficiency and effectiveness.
- Focus on other aspects of their businesses, such as product selection, customer service, or pricing. This could involve offering a wider selection of products, providing better customer service, or offering lower prices.
- Lobby governments to regulate Amazon’s power. This could involve advocating for antitrust laws or other regulations that would limit Amazon’s ability to compete in the market.
It is important to note that SCA is still in its early stages, and it is not yet clear how successful it will be. However, SCA has the potential to revolutionize the way that Amazon sellers manage their supply chains, and it is likely to have a significant market impact. As a result, Amazon’s competitors are likely to be closely monitoring SCA and developing strategies to respond to it.
How to get started with Supply Chain by Amazon
To get started with SCA, sellers can visit the SCA website and create an account. Once they have created an account, they can start adding their products to SCA and selecting the services they need.
Amazon will then work with sellers to develop a customized supply chain plan that meets their specific needs. Once the plan is in place, Amazon will take care of all of the details, from picking up inventory from sellers’ manufacturers to delivering it to customers’ doorsteps.
Supply Chain by Amazon is a new era for sellers. It provides sellers with a one-stop solution for all of their supply chain needs, and it offers them a number of significant advantages, including reduced costs, increased speed and reliability, and simplified supply chain management.
Sellers who are looking to reduce their costs, increase the speed and reliability of their deliveries, and simplify their supply chain management should consider using Supply Chain by Amazon.