Amazon Accelerator Series Part 3: Supply Chain Management

Posted on Wed, August 03, 2016 in Greatest Hits, Business Strategy, eCommerce Tips, by Corey Thomas

If you’re just joining us, this is Part 3 of our Amazon Accelerator Series, where we’re exploring the opportunity for businesses to grow by using Amazon.com to increase sales. Be sure to check out Part 1: How to Sell on Amazon and Part 2: The Product Page.

As we’ve seen, the sales opportunities on Amazon.com are substantial, but an equally powerful aspect of Amazon is the Operational Efficiency companies can attain when they use the marketplace. Today we’ll focus on two business units for which Amazon’s systems and operations framework can help ease the complications that come with rapid growth.

1. Supply Chain and Inventory Management

Selling on Amazon can make a major difference for businesses. In some cases, Amazon can impact volume of product sales by 10x or even 100x. In order to take advantage of all these extra sales opportunities, companies need to effectively manage their supply chain and purchasing department to maintain inventory levels. While a 10x to 100x growth in sales can seem a little like drinking from a firehose, Amazon supports companies by giving them access to a suite of analytics tools to monitor product sales and anticipate misaligned purchasing and inventory management. Amazon’s network of warehouses also makes it possible to ship inventory directly from suppliers and manufacturers to the fulfillment warehouses. By eliminating the need to bring every unit through their own facilities, companies can scale their operations without exceeding their physical capacity. This reduced stress on receiving processes not only lowers lead times and freight costs, but also keeps operating expenses in check. These improvements in efficiency free companies up to work on the most important issues affecting their business.

2. Product Fulfillment

Poorly managed fulfillment operations can cripple an ecommerce business. Many businesses have suffered through the headache of overwhelming their warehouse with a spike in sales, they’ve struggled to find warehouse staff during a seasonal sales rush, or maybe they’ve had their order management system crash midday causing delays on order fulfillment. Growing fast is exciting, but many companies can grow so fast that they end up damaging their brand as their operations and systems fall behind. Working with Amazon gives businesses access to more options to manage growth. Once a company ships their product into Amazon’s warehouses, and elects to use Amazon’s Fulfillment Service, all the fulfillment logistics to ship products directly to customers are handled by Amazon. That means that while there is some incremental increase in the logistics overhead, a company can grow more efficiently compared with handling all the processes internally.

Closing Thoughts

Using Amazon’s Fulfillment Network, companies also often see improved customer experience because their customers can receive orders with same-day, next-day, or second-day delivery service options available through Amazon Prime. Amazon even allows companies to ship using their negotiated shipping rates with FedEx, UPS, and USPS, helping to save on fulfillment costs.

Optimizing Amazon ecommerce efforts to be as effective as possible is a passion of ours. If you'd like to dig a little deeper after reading our Amazon Accelerator series, please get in touch! We want to hear about your challenges and goals for selling on Amazon.com and see how we can help.

Tell Us About Your Project

Invalid phone number