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Supply Chain by Amazon sounds like Amazon Prime for manufacturers

Supply Chain by Amazon sounds like Amazon Prime for manufacturers


Amazon will now pick up and deliver products directly from factories with its new Supply Chain by Amazon service.

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Illustration by Alex Castro / The Verge

Amazon is bringing its advanced logistics capabilities to businesses that don’t even sell on the marketplace. In an announcement on Tuesday, the e-commerce giant says its new Supply Chain by Amazon service lets sellers ship products directly from factories — whether it’s going to Amazon or not.

As part of the program, Amazon will pick up, ship, and deliver products to customers from manufacturing facilities across the globe. It will also manage customs clearance, ground transportation, bulk storage, and inventory replenishment. This means sellers shouldn’t have to worry about the supply chain side of their business, letting them focus solely on marketing their products and taking care of sales.

“While FBA [Fullfilment by Amazon] significantly simplified one aspect of the supply chain process, the product journey starts much earlier than fulfillment — often starting with manufacturing,” Amazon vice president Dharmesh Mehta writes in the post. He adds that Supply Chain by Amazon offers a “complete, end-to-end solution” that helps sellers manage “their entire supply chain and across all their sales channels, including online and physical stores.”

In addition to the new Supply Chain by Amazon service, the company is also introducing Multi-Channel Distribution (MCD), which will allow sellers to move products in bulk from Amazon’s warehouses to other non-Amazon facilities. Amazon says this “simplifies supply chain management” by letting sellers “replenish across all their sales and fulfillment channels from a single inventory pool.” MCD is only available as a pilot with “an initial set of sellers” but should become available to all sellers later this year.

These new seller programs come as Amazon faces a massive antitrust lawsuit from the Federal Trade Commission. The company reportedly held a “last-rites” meeting with the FTC last month, which typically comes before a lawsuit. Meanwhile, reports suggest that the FTC could file its lawsuit against Amazon later this month, potentially addressing FBA and other parts of its business.

By letting sellers ship products to third-party warehouses, Amazon might be trying to alleviate some of the FTC’s concerns about the company’s expansive fulfillment operations. However, the company recently drew criticism by charging sellers an extra fee for shipping their own products. Some other perks announced by Amazon include streamlined shipments for cross-border transportation, expanded availability of Amazon’s Warehouse and Distribution service, which was previously in a closed beta, and automatic inventory replenishment that leverages machine learning technology.