Of the total shipments, 80 percent were ordered from the retailer’s website and shipped direct to consumers from its warehouse in Chicago. One of these merchants – an iDrive client – is a smaller Chicago-based apparel retailer that relied on a 3PL (neither company was identified) to originate all of its shipments, which were then delivered by the U.S. However, according to consultancy iDrive Logistics, which works with Amazon users in the retail, manufacturing and third-party logistics (3PL) space – the latter being businesses handling multiple supply chain functions for shippers – Amazon has an endgame with SFP – to force small merchants to cede end-to-end control of their supply chain even if they don’t want to. The SFP service appeals to companies that want to sell Prime-branded products and have the flexibility to use other logistics partners besides Amazon Logistics, the e-tailer’s logistics unit, which currently operates in New York, Chicago, Los Angeles, Atlanta and Dallas. The condition for staying in the program is that they hit the one- to two-day delivery targets at least 98.5 percent of the time. Alternatively, companies can enroll in an Amazon program called “Seller-Fulfilled Prime” (SFP) that enables them to manage their own distribution while retaining “Prime Merchant” status. Millions more were expected to have signed up for the service before, during and after Amazon’s two-day Prime Day extravaganza in mid-July.īusinesses that allow Amazon to fulfill their “Prime” orders are not liable for any late deliveries. households as of the end of June, according to data from investment firm Cowen & Co. Prime has been a huge success, with 102 million worldwide users, among them 63 million U.S. It all goes through Amazon’s “Prime” delivery service, where for a fee of $12.99 a month or $119 a year, users receive one- and two-day deliveries with money-back guarantees on more than 100 million items ordered on Amazon’s site. What is lesser-known are some of the steps the e-tailing giant is taking to accomplish that goal. (NASDAQ:AMZN) seeks to corner the market for the marketing, fulfillment and delivery needs of small to midsize businesses.
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