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  • Channel Fusion Team

Your Supply Chain and Amazon AWD

How to Use Amazon Warehousing & Distribution (AWD)

On September 1st, 2022, Amazon announced its move into warehousing and fulfilment for all of your orders. Details here Amazon Warehousing & Distribution (AWD) will allow sellers long term storage and replenish products that are ready to ship.

One challenge for Amazon is building the trust that they lost during the great COVID Inventory Performance Index (IPI) storage issues. For those of you unaware, IPI was the metric by which Amazon forced brands to become a little more lean in how they manage their stock.

Amazon has always had an emphasis on forcibly improving its sellers. Performance metrics for customer service, shipping, and quality of products have been stealthily enforced on sellers. If you want to survive, be great at what you do ....and on Amazon terms. IPI was a lever whereby they could ensure you had the fast moving stock Amazon craves.

Fast forward to 2022, and now the schmooze from Amazon is to trust them with your multichannel fulfilment. On top of initiatives such as Buy With Prime, they are starting to flex their considerable muscles.

The reality is that you can't really argue with them. If you are an Amazon-focused brand alongside your website and other e-marketplaces, then you would be foolish to ignore their call. It's understanding what they can and can't do.

For 3PL providers like Channel Fusion, our goal has always been on service over price. We recognised early the need to meet the multichannel needs of our customers. That means elements such as kitting, FBA prep, returns, and new channels are priority.

We are the only fulfilment house with connections to TikTok Shop as well as the ability to service Amazon replenishment and high street retail.

Amazon Warehousing and Distribution management remains primarily focused in the USA and by invitation only. It will grow over time to start filling their warehouses. Our understanding of how these platforms work puts us ahead of our competition and you in front of yours.

Should I use Amazon Warehousing & Distribution (AWD)?

For many sellers, the simplification of managing their inventory through Amazon is appealing. The challenge for many though, is that they require more than just stock-in / stock-out services.

If you provide bundles or need to leverage kitting to optimise your stock then Amazon will not be the only option.

It is also worth noting that many customers prefer "not" shopping on Amazon. Price is a great driver of consumer behaviour, but Amazon is now not always the cheapest.

Customers also like supporting other businesses outside the Amazon eco-system. Having an Amazon van drop off your delivery from your website order may well end up losing you a customer.

Also, we don't know whether Amazon will be as fast to turn around and reduce the stock you have in their warehouse. Some of these actions can be implemented quickly and leave you with no back-up plan to ship your orders.

That said, leveraging the behemoth of Amazon has always made sense. You have to learn to dance with the devil and get your product and pricing strategy right. Smaller brands will struggle to diversify their offering, while larger customers will lack the micro-management to fight all of the battles they face.

If you need assistance in understanding the benefits and how to leverage the best elements, our team is here to help. We provide all of the additional services for you to provide "best in class" services to your customers.

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