Amazon Supply Chain u2014 How It Affects Your FBA Business

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Amazon has the potential to be an incredible business partner for many FBA sellers. However, there are some important things you need to know about Amazon’s supply chain that may change how you decide whether or not it is a good fit for your company.

Amazon Supply Chain is a topic that has been in the news lately. It’s a system of warehouses, logistics and transportation hubs where Amazon stores products before they are shipped to customers. These warehouses are located across North America and Europe. This system affects how you run your FBA business because it can be difficult to find the right items for your inventory.

The Amazon supply chain is impressive—the eCommerce behemoth, founded by Jeff Bezos, has revolutionized online sales. Prior to Amazon, making an online purchase required consumers to wait many days, if not weeks, for their order to arrive. However, you can now have your favorite Whole Foods order delivered to your house in as little as two hours. That is the Amazon supply chain’s magic.

Amazon has vertically integrated just about every facet of the supply chain, from fulfillment centers and distribution centers to warehouses and amazing delivery, all while keeping prices low for Amazon’s consumers.

Amazon has an unrivaled edge that enables it to dominate the online e-commerce business. It had a 49 percent share of the US e-commerce market in 2018, and it has continued to expand since then.

It’s easy to understand why Amazon has gone to the top of the pack so rapidly, with so many amazing shipping choices for consumers and even support logistics and fulfillment services for sellers like Amazon FBA.

So, what exactly are the Amazon supply chain’s secrets? How does it all come together to satisfy such high demand while keeping expenses down and wowing clients on a regular basis? This essay will define a supply chain and explain why the Amazon supply chain is so special. From warehouses and Manufacturing to technology and logistics, we’ll examine all of the important components. Then we’ll look at the secrets that make Amazon so unique.

What Is Amazon Supply All About?


First and first, what exactly is a supply chain?

A supply chain is a group of companies that includes a distributor and its suppliers. Vendors may make, market, and deliver a product to customers using this operation management framework. This network depicts the physical steps required to get the product closer to the client from its initial condition, and it is made up of various persons, entities, activities, resources, and information.

The goal of expanding this network is to fulfill demand, save costs, and remain competitive in the overall business environment. A well-designed supply chain speeds up the Manufacturing and fulfillment process while lowering expenses for both the seller and the client.

The many steps of this complex surgery are discussed below.


The initial phase in this process is Manufacturing. The manufacturer is the company that develops the product. A seller may or may not be the manufacturer, depending on the product.

The factory will organize its production based on global product demand—the greater the demand among consumers, the more supply is required, and the greater the burden on the producer.

Distribution and storage

The goods is then delivered to the warehouses from the manufacturer. The inventory will then be stored until it is sent out for delivery.

These warehouses are often located just outside of urban areas, where there is greater room but yet close enough to important transit hubs (to keep the costs low).

Most supply chains are already suffering the “Amazon Effect,” in which consumers expect a firm to satisfy demand for a product rapidly by providing speedier delivery. In other words, they want to see how creative a company can be in order to produce items faster. Amazon’s outstanding delivery speeds have put a lot of pressure on wholesalers to distribute their items as quickly as possible.


The product will enter the delivery stage once it is complete. Depending on the delivery mode, this might include air shipment via Amazon Prime Air, ground shipping through UPS or DHL, or even last-mile delivery by local contract employees.

Is there a fee before Amazon ships an item?


Technology now plays an important role in supply chain management. Robots may assist pack orders, guide supplies to the correct delivery van, and much more.

While these inventive solutions cost the retailer more money up front, they speed up delivery times and keep customers satisfied, which is critical.


A complicated supply chain operation is required to manage resources, store orders for long or short periods of time, and distribute them to their eventual destination. It usually requires a number of different partners, a variety of equipment to help with storage and delivery, and strict deadlines with little space for long-term delays.

Amazon’s Supply Chain Management


Sellers that want to sell on Amazon have a few different fulfillment options:

  • FBA (Amazon’s fulfillment) – FBA allows merchants to use Amazon’s fulfillment service for any items they sell on Amazon’s marketplace. Everything from sorting to packing to shipping will be handled by Amazon.
  • FBM (Fulfillment by Merchant) – This service allows vendors to offer their items on the marketplace while handling all aspects of fulfillment, including inventory management and delivery.

The FBA chain of operations will be discussed here.

Amazon’s fulfillment

When merchants utilize Amazon’s supply chain, they gain all of the advantages of a streamlined service:

  1. Send inventory to Amazon first.
  2. They then receive and store your items.
  3. Customers that are Prime locate your goods in the marketplace and make a purchase.
  4. The Amazon supply chain is in charge of picking, packing, and shipping the order.
  5. Customers using Amazon Prime may monitor their orders through Amazon’s customer care.
  6. Amazon FBA also implies that the corporation can manage refunds and provide further support.

Amazon’s supply chain strategy has recently included remarkable technology such as drones, according to CEO Jeff Bezos. These drones make distribution more efficient and cost-effective.

Distribution and storage

Amazon’s inventory management and distribution strategies account for a substantial portion of its success. It stores goods in a number of large warehouses and distribution locations around North America.

To spread out inventory, Amazon deliberately positions all of its warehouses in significant urban centers. They also have mini-warehouses in less populous locations to ensure that orders are sent and delivered swiftly, regardless of the goods or the location of the buyer.

Internal optimization takes place inside each center. Each center includes five unique inventory storage sections, making it simple for both robots and workers to choose and pack the necessary products from storage and prepare them for distribution.


Another notable difference between the Amazon supply chain and other corporate supply chains is the wide range of shipping choices offered, particularly for Prime members.

The free two-day shipping or one-day delivery, depending on the goods and availability, was Amazon Prime’s first outstanding offering some years ago. They just began providing certain packages that are even quicker than their standard Prime delivery of one or two days. Within two hours, Prime Now may deliver things to the buyer’s door (even from your favorite retailers like Whole Foods).

The most astonishing aspect of this business plan, however, is the many ways in which they may keep their promises. Amazon has established a delivery network with lightning-fast delivery rates using new technologies and classic delivery methods.

Products are occasionally sent out on Amazon-branded trucks from its fulfillment facilities. Individual delivery workers who arrive in their vehicle or do bike deliveries in metropolitan areas are also available, as are drones that soar through the air and deliver to backyards.


To stay up with delivery rates and create efficiencies in storage, inventory management, and delivery, the Amazon supply chain has developed a number of technologies.

The robotics and automation technologies offered by Amazon are astounding. Every step of the route, from the client purchase to the final drop-off, Amazon employs technological tactics.

When you’re out shopping, Amazon invites you to buy something with only one click. They’re also testing a drone project that will use tiny flying machine robots to make deliveries, allowing them to extend their network of services with the money saved on storage and manpower.


While Amazon still enables third-party sellers, they have a system in place to make the same product accessible to customers at a reduced cost. They’ve begun making their own goods and even placing the Amazon logo on third-party items.

Amazon may gain more influence over the e-commerce business by using its machine-building robots to make branded items. They can respond to product demand with the same speed as they have in all of their other shipping services.

Customers have come to identify and trust Amazon brand items, resulting in increased sales for the retailer.

Global Presence

Amazon’s supply chain strategy is unquestionably the best in the world. Amazon today operates in 11 distinct online marketplaces throughout the globe, enabling merchants to succeed from anywhere. These markets have different site suffixes than the main Amazon website, such as.co or.uk.

These are some of the global marketplaces:

  • Amazon.com.mx
  • Amazon.fr
  • Amazon.in


To guarantee prompt delivery of product for delighted consumers, Amazon uses a massive network of storage locations distributed around the nation, as well as branded and third-party carriers.

Employees choose and box merchandise within Amazon’s inventory storage facilities. The products are then picked up and distributed by distributors (who might be UPS, FedEx, USPS, or private contractors).

Why is Amazon at the top of the supply chain?

There’s no doubt about it: Amazon’s supply chain works—just look at the company’s sales figures. But why? There are a few supply chain secrets that put this retail behemoth on top of the world.

The Amazon supply chain has three essential parts that assist the firm satisfy demand and provide the greatest customer experience.

Amazon Supply Chain Management Distribution and storage Network

One of the most important parts of keeping such a devoted audience is Amazon Prime. For a minimal monthly fee, Prime members may get two-day free delivery on almost any purchase on Amazon. In 2019, the firm increased the number of goods eligible for one-day free shipment.

To meet this commitment, Amazon has over 175 fulfillment facilities throughout the globe, including 75 in North America. Apart from these facilities, the FBA program is responsible for all fulfillment for Amazon sellers through the Amazon supply chain.

Amazon would not be what it is today without these centers and logistics systems.

Various Fleets

For best efficiency, the Amazon supply chain uses a variety of transportation methods and partners to deliver shipments. They use Amazon-branded trailer tucks, UPS or FedEx as shipment partners, and independent logistical businesses or contractors.

They provide up to $10,000 in recovered beginning fees and three months’ income to anybody who joins their Delivery Service Partners to entice them to join.

Where Humans and Automation Collide

Finally, the convergence of people and automation is the final secret to Amazon’s magic. Amazon is doing it differently than any other firm. Amazon has cut storage and labour expenses by using robots to pack things and drones to transport them.

While the people keep things moving, these technological features enable the corporation maintain up with its Amazon Prime promise.

What Logistics Software Does Amazon Use in its Supply Chain Strategy?


The software suites Amazon utilizes to handle diverse operations are part of what has made its supply chain strategy so strong.

Amazon cooperated with Carrier in the cold chain, for example. The two organizations used the Lynx platform to establish a digital system for managing data and shipments for temperature-controlled freight.

It also provides AWS solutions for blockchain, machine learning, AWS Cloud, and other applications, in addition to cold chain logistics.

Last Thoughts

Any company looking to establish a successful supply chain should turn to Amazon. Thanks to its massive network of storage facilities, different distribution fleets, and combination of human and machine power, the retail behemoth has radically transformed how consumers purchase online and receive deliveries. If you’re thinking about becoming an Amazon seller, consider the following advantages.

Amazon Supply Chain is a logistics company that helps Amazon to deliver products faster and more efficiently. The company handles the entire process from warehousing to shipping, which can be expensive for small businesses. This case study will give you an idea of how it works. Reference: amazon logistics case study pdf.

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