Amazon expands supply chain services

Amazon on May 4 launched Amazon Supply Chain Services, a new offering that opens the company’s freight, distribution, fulfillment and parcel-shipping network to businesses beyond the merchants that already sell on its marketplace. The service lets companies move, store and deliver goods ranging from raw materials to finished products through the same logistics system Amazon built for its own retail operations and third-party sellers. Amazon said the launch extends capabilities it had been rolling out since 2023 under “Supply Chain by Amazon,” which had been aimed primarily at sellers using Amazon’s marketplace. ### What exactly did Amazon put on the market? Amazon said ASCS gives businesses access to freight, distribution, fulfillment and parcel shipping as either a full end-to-end service or as individual components. The company’s supply-chain site says it can pick up inventory at manufacturing facilities, handle cross-border shipping and customs clearance, store products in bulk, manage replenishment across Amazon and other sales channels, and deliver orders to customers. (press.aboutamazon.com) The May 4 announcement marked a broader commercial push than the 2023 launch of Supply Chain by Amazon. In September 2023, Amazon introduced that service as an automated tool for sellers, saying it would move products from manufacturers to customers and manage replenishment across all sales channels. (press.aboutamazon.com) ### Which companies are already using it? Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters were among the first companies named by Amazon as ASCS customers. Amazon said P&G is using its freight services to move raw materials to production facilities and finished goods across its distribution network, while 3M is using Amazon freight to move products from manufacturing sites to distribution centers worldwide. (press.aboutamazon.com) Lands’ End is using a unified inventory pool within Amazon’s network to fulfill orders across multiple sales channels, according to Amazon. American Eagle Outfitters is using Amazon’s parcel network to deliver online orders from its American Eagle and Aerie websites directly to customers nationwide, the company said. ### How does the inventory piece work? (press.aboutamazon.com) Amazon’s sales materials say ASCS allows businesses to track transportation, storage, distribution, fulfillment and delivery in one place through Seller Central, and to automate inventory replenishment from Amazon warehouses into its fulfillment network. The company also says customers can use an “Amazon Managed Service” option for an automated end-to-end setup, or select individual services separately. (press.aboutamazon.com) Amazon tied that inventory pitch to earlier warehousing and distribution products. In 2023, the company said Amazon Warehousing and Distribution, or AWD, would serve as low-cost bulk storage and feed inventory in bulk to different sales channels from a single inventory pool. ### Who is Amazon trying to reach beyond its own sellers? (sell.amazon.com) Amazon said ASCS is open to businesses of all types and sizes, not only Amazon sellers. The company said it is expanding third-party logistics capacity for industries including healthcare, automotive, manufacturing and retail. CNBC reported the move puts Amazon more directly into competition with established logistics groups such as UPS and FedEx. (press.aboutamazon.com) Peter Larsen, Amazon’s vice president of Amazon Supply Chain Services, said in the company’s announcement that Amazon was bringing “the infrastructure, intelligence, and scale” of its supply chain services to outside businesses. Larsen compared the move to the way Amazon Web Services grew from internal infrastructure into a product sold to other companies. (aboutamazon.com) ### What changed from the earlier seller-focused version? September 12, 2023, was the date Amazon first introduced Supply Chain by Amazon for sellers at its Accelerate conference. That version emphasized lower transportation and storage costs, including cross-border transportation discounts of up to 25% and bulk-storage discounts of up to 80% compared with certain Fulfillment by Amazon storage fees, according to Amazon’s press release at the time. (press.aboutamazon.com) The current ASCS site says the seller-focused service is “evolving into Amazon Supply Chain Services,” and it now offers accounts for businesses that only want to sell on non-Amazon channels. Amazon says sign-up and service details are available through its supply-chain website, where the Amazon Managed Service and individual freight, storage, fulfillment and delivery options are listed. (sell.amazon.com) (press.aboutamazon.com)