Amazon launches storage and distribution service for sellers

Dan Berthiaume
Senior Editor, Technology
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Amazon is offering a hosted warehousing solution for third-party sellers.

Amazon is offering a new hosted distribution center solution to its third-party sellers.  

Amazon Warehousing & Distribution (AWD) is designed to provide low-cost, long-term storage that gives sellers the option to store their inventory in Amazon distribution centers and then seamlessly replenish to Amazon fulfillment centers. The e-tail giant is supporting the service with new, purpose-built facilities for bulk storage and automated distribution.

AWD operates as a pay-as-you-go service, eliminating the need for third-party sellers to move inventory from upstream facilities to Amazon fulfillment centers. Sellers can enroll in AWD with one click and integrate their upstream inventory storage operations with the Amazon fulfillment network.

Sellers using AWD can also consolidate their global inventory, which they can then view and manage on the Amazon Seller Central dashboard, simplifying their operations with one pool of inventory. In 2023, sellers will be able to use AWD to send their inventory to any location, including to wholesale customers or brick-and-mortar stores.

The e-tail giant says this new service is a continuation of a multiyear investment in its warehousing and distribution network to support sellers. Amazon initially rolled out its Fulfillment by Amazon (FBA) hosted logistics service for third-party sellers in 2006.

Amazon actively assists third-party retailers (primarily small-to-medium-sized businesses) to sell on its Amazon Marketplace e-commerce platform with at least 150 tools and services, and regularly adds new offerings.

Some of its more recent offerings for third-party sellers include launching Amazon Seller Wallet, a solution intended to provide the e-tail giant’s selling partners more capability to determine how much and when to convert their funds.

The tool will enable third-party Amazon sellers to hold, view, and transfer Amazon store proceeds directly to their bank account on their schedule. Amzon also recently introduced a revamped version of its Account Health Rating, designed to help its 2 million third-party sellers adhere to Amazon’s policies and maintain positive account activities.

[Read more: Amazon upgrades success metric for selling partners]

On the fulfillment side, in fall 2021 the company launched Amazon Local Selling, a new set of services that enables local, regional, and national retailers operating on Amazon Marketplace to offer both in-store pickup and fast delivery to local customers.

The e-tail giant is collaborating with retailers including Best Buy and Sears Hometown Store to enable customers to select in-store pickup for Marketplace purchases and receive a notification when it is ready that day, or select fast delivery service.

Amazon also released another set of tools aimed at making it easier for U.S.-based third-party sellers to offer their products in its 21 stores worldwide, including a global customer service/support solution, an artificial intelligence (AI)-based product guidance tool, global inventory viewer, and a service for integrated global listings.

Third-party sellers are becoming an increasingly important part of Amazon’s business. According to the company, its recent 2022 Prime Day event, which broke records with close to $12 billion in total sales during the July 12-13 period, was also the biggest-ever Prime Day event for Amazon's third-party selling partners.

Amazon said sales growth by its selling partners outpaced growth in its own retail business, with Prime Day shoppers spending over $3 billion on more than 100 million small business items.

“Through Amazon’s iterative innovation, we are solving common challenges for sellers—streamlining complex operations and liberating them from storage concerns or gaps in inventory,” Gopal Pillai, VP of Amazon Distribution and Fulfillment Solutions, said in a corporate blog post. “AWD makes the promise of supply chain as a service a reality and is specifically designed to solve inventory management challenges and deliver operational efficiencies.”