According to relevant documents, the new service, called Amazon warehousing and replenishment, enables businesses to build cheap inventory closer to Amazons delivery business, so that they can replenish goods quickly. Amazon is piloting the project in Ontario, California, about 20 miles from its nearest distribution center facility, and plans to expand it across the country, according to the document.
The company has spent billions of dollars building a complex network of highly automated warehouses that use robots, conveyor belts and thousands of people to quickly pack and ship products. Now, the company is turning to cheap storage.
Amazon is facing delivery pressure during the holiday shopping season. Amazon shares warehouse space with third-party sellers, and has increased its peak season storage fees to prevent partners from stocking too much. But once the product is sold out, Amazon cant continue to sell. Amazons new service tries to solve two problems: cleaning up the goods in the distribution center and setting up a spare inventory nearby.
Juozas kaziukenas, founder of the New York e-commerce research company, said: Amazon is trying to find a logistics service for which businesses are willing to pay, rather than piling up their facilities with unwanted goods. Many sellers have lost a lot of experience in this area.
The service is Amazons latest move to further extend its supply chain upstream, with the aim of controlling the logistics system of products from factories to consumers homes and reducing distribution and warehousing costs. (Chen Chen)
Source: Qiao JunJing, editor in charge of Netease Technology Report