{"id":6973,"date":"2023-03-11T10:00:00","date_gmt":"2023-03-11T10:00:00","guid":{"rendered":"https:\/\/thewealthcircle.com\/?p=6973"},"modified":"2023-03-11T19:49:59","modified_gmt":"2023-03-11T19:49:59","slug":"how-amazon-supply-chain-work","status":"publish","type":"post","link":"https:\/\/kiiky.com\/wealth\/how-amazon-supply-chain-work\/","title":{"rendered":"How Does Amazon Supply Chain Work in 2023 | Full Guide","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n<p class=\"has-text-align-justify\">If you have ever wondered how Amazon processes millions of orders and rightly delivers products to customers, then you&#8217;re simply inquiring about Amazon&#8217;s supply chain.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">Amazon\u2019s supply chain model is one of the world&#8217;s largest, most efficient, and state-of-the-art supply chain operations. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Its sophistication didn&#8217;t begin this way. It evolved from a garage warehouse to having thousands of fulfillment centers all over the world. Yet, its fundamentals are similar to its inception stage. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Amazon embraces technologies to improve operations, efficiency, and speed. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">So, how exactly does this Amazon supply chain work?<\/p>\n\n\n\n<p class=\"has-text-align-justify\">Before we answer that question on how it works, we will begin this discussion with what the Amazon supply chain is. Stay with us!<\/p>\n\n\n\n<div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><h2 id=\"table-of-contents\">Table of contents<\/h2><ul><li><a href=\"#h-what-is-the-amazon-supply-chain\" data-level=\"2\">What is the Amazon Supply Chain?<\/a><\/li><li><a href=\"#h-how-does-the-amazon-supply-chain-work\" data-level=\"2\">How Does the Amazon Supply Chain Work?<\/a><ul><li><a href=\"#h-1-receiving-products\" data-level=\"3\">#1 Receiving Products\u00a0<\/a><\/li><li><a href=\"#h-2-storing-of-items\" data-level=\"3\">#2 Storing of Items\u00a0<\/a><\/li><li><a href=\"#h-3-picking-orders\" data-level=\"3\">#3 Picking Orders\u00a0<\/a><\/li><li><a href=\"#h-4-quality-assurance\" data-level=\"3\">#4 Quality Assurance\u00a0<\/a><\/li><li><a href=\"#h-5-packing-orders\" data-level=\"3\">#5 Packing Orders\u00a0<\/a><\/li><\/ul><\/li><li><a href=\"#h-elements-components-of-amazon-supply-chain\" data-level=\"2\">Elements\/Components of Amazon Supply Chain<\/a><ul><li><a href=\"#h-1-warehousing\" data-level=\"3\">1. Warehousing<\/a><\/li><li><a href=\"#h-2-amazon-supply-chain-delivery\" data-level=\"3\">2. Amazon Supply Chain: Delivery<\/a><\/li><li><a href=\"#h-3-amazon-supply-chain-technology\" data-level=\"3\">3. Amazon Supply Chain: Technology<\/a><\/li><li><a href=\"#h-4-manufacturing\" data-level=\"3\">4. Manufacturing<\/a><\/li><li><a href=\"#h-5-global-reach-of-amazon-supply-chain\" data-level=\"3\">5. Global Reach of Amazon supply chain <\/a><\/li><li><a href=\"#h-6-pricing\" data-level=\"3\">6. Pricing<\/a><\/li><\/ul><\/li><li><a href=\"#h-conclusion\" data-level=\"2\">Conclusion<\/a><\/li><li><a href=\"#h-references\" data-level=\"2\">References<\/a><\/li><li><a href=\"#h-recommendations\" data-level=\"2\">Recommendations<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-the-amazon-supply-chain\"><span id=\"what-is-the-amazon-supply-chain\">What is the Amazon Supply Chain?<\/span><\/h2>\n\n\n\n<p class=\"has-text-align-justify\">Before we start on how the Amazon supply chain works, it is important to explain what the Amazon supply chain is.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">The Amazon supply chain refers to product warehousing, inventory management, pricing, and delivery. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Each element is carried out to ensure a smooth supply chain.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">There are different fulfillment options for sellers on Amazon. They can handle the fulfillment themselves or let Amazon sort, package, and ship products through their fulfillment center. <\/p>\n\n\n\n<p>Read: <a href=\"https:\/\/kiiky.com\/wealth\/shipping-companies-in-nigeria\/\" target=\"_blank\" rel=\"noreferrer noopener\">16 Best Shipping Companies in Nigeria for 2023 | See Offers<\/a><\/p>\n\n\n\n<p>Third-party sellers on Amazon can use either of these fulfillment services:<\/p>\n\n\n\n<ul>\n<li><strong>Fulfillment by Amazon (FBA)<\/strong>&nbsp;\u2013 Sellers leverage Amazon\u2019s fulfillment for products sold on the Amazon Marketplace<\/li>\n\n\n\n<li><strong>Fulfillment by Merchant (FBM)<\/strong>&nbsp;\u2013 Sellers handle fulfillment for their products sold on the Amazon Marketplace<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-does-the-amazon-supply-chain-work\"><span id=\"how-does-the-amazon-supply-chain-work\"><strong>How Does the Amazon Supply Chain Work?<\/strong><\/span><\/h2>\n\n\n\n<p class=\"has-text-align-justify\">So, how does Amazon&#8217;s supply chain work? <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Since Amazon has recognized the need for super-fast delivery, it has invested heavily in reducing delivery time and even introduced same-day delivery. <\/p>\n\n\n\n<p>Since this generation is a want-it-now era, Amazon&#8217;s supply chain works this way precisely.<\/p>\n\n\n\n<ul>\n<li>A&nbsp;customer places an order<\/li>\n\n\n\n<li>The fulfillment center is on standby.<\/li>\n\n\n\n<li>The order barcode has matched the product.<\/li>\n\n\n\n<li>The product is placed in a crate on a conveyor belt.<\/li>\n\n\n\n<li>The crate goes through the distribution center before being sorted<\/li>\n\n\n\n<li>The crates arrive at the central point.<\/li>\n\n\n\n<li>The Bar code of the product is matched with an order.<\/li>\n\n\n\n<li>These are sorted automatically into one of several thousand chutes before being boxed.<\/li>\n\n\n\n<li>The bar code identifies the customer&#8217;s order.<\/li>\n\n\n\n<li>Boxes are packed, taped, and weighed.<\/li>\n\n\n\n<li>Orders are shipped<\/li>\n<\/ul>\n\n\n\n<p>Let us iterate the main points on how the Amazon supply chain works. The Amazon fulfillment center follows the following steps after a shopper has clicked the buy button:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-receiving-products\"><span id=\"1-receiving-products\">#1 <strong>Receiving Products&nbsp;<\/strong><\/span><\/h3>\n\n\n\n<p>After placing an order, the products are separated between those coming from Amazon and third-party vendors using FBA. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">At Amazon Fulfillment Centers, products are either taken off trailers by forklift or manually built into pallets. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-storing-of-items\"><span id=\"2-storing-of-items\">#2 <strong>Storing of Items&nbsp;<\/strong><\/span><\/h3>\n\n\n\n<p>Amazon stores items with yellow bins, all tracked by a computer. <\/p>\n\n\n\n<p>These bins are used to transport products based on size.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-picking-orders\"><span id=\"3-picking-orders\">#3 <strong>Picking Orders<\/strong>&nbsp;<\/span><\/h3>\n\n\n\n<p>When you click the \u201cbuy button\u201d, and your order comes in, a robot will bring pods full of items to Amazon associates working at pick stations. These pickers will read the screen, retrieve the item and place it into a yellow plastic box \u2013 also known as a tote.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-quality-assurance\"><span id=\"4-quality-assurance\">#4 <strong>Quality Assurance&nbsp;<\/strong><\/span><\/h3>\n\n\n\n<p class=\"has-text-align-justify\">These orders are checked manually to ensure the robot&#8217;s address and information align with the computer&#8217;s information. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-5-packing-orders\"><span id=\"5-packing-orders\">#5 <strong>Packing Orders&nbsp;<\/strong><\/span><\/h3>\n\n\n\n<p class=\"has-text-align-justify\">Lastly, items that belong to different shipments are organized and scanned before being sent to the pack station. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">At the pack station, the system will recommend box sizes and measure out the amount of tape required. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Amazon ships third-party vendor items in original boxes, but Amazon works with third-party vendors to reduce packaging.&nbsp;<\/p>\n\n\n\n<p class=\"has-text-align-justify\">This sounds easy. There are elements to achieve this pretty straightforward process. They are just right below. <\/p>\n\n\n\n<p>READ ALSO: <a href=\"https:\/\/kiiky.com\/wealth\/most-expensive-items-on-amazon\/\" target=\"_blank\" rel=\"noreferrer noopener\">10 Most Expensive Items On Amazon<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-elements-components-of-amazon-supply-chain\"><span id=\"elements-components-of-amazon-supply-chain\">Elements\/Components of Amazon Supply Chain<\/span><\/h2>\n\n\n\n<p>Amazon&#8217;s supply chain model is the most important element of the company&#8217;s success story.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">Now, let\u2019s break down the pieces of the Amazon supply chain strategy that has turned an e-commerce company that started in Jeff Bezos&#8217;s garage into a multi-billion e-commerce company.   <\/p>\n\n\n\n<p class=\"has-text-align-justify\">They include:<\/p>\n\n\n\n<ul>\n<li>Warehousing<\/li>\n\n\n\n<li>Delivery<\/li>\n\n\n\n<li>Technology<\/li>\n\n\n\n<li>Manufacturing<\/li>\n\n\n\n<li>Pricing<\/li>\n\n\n\n<li>Global Reach<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-warehousing\"><span id=\"1-warehousing\">1. Warehousing<\/span><\/h3>\n\n\n\n<p>Warehousing bears a huge part in Amazon\u2019s success. They ensure products are easily accessible from everywhere in the world.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">As a result, vast numbers of warehouses and distribution centers are located near large cities and mini-warehouses in smaller areas. Their warehousing strategy is strategic positioning near metropolitans and populated areas to ensure supply can be met with demand. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Currently, Amazon has about 175 fulfillment centers\/warehouses worldwide, with the majority located across North America and Europe.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">In addition to these warehouses, Amazon also has a network of partner distribution centers and wholesalers. If they cannot fulfill the order from its distribution center, they use their partners instead. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-amazon-supply-chain-delivery\"><span id=\"2-amazon-supply-chain-delivery\">2. Amazon Supply Chain: Delivery<\/span><\/h3>\n\n\n\n<p class=\"has-text-align-justify\">Amazon has a plethora of delivery options. This is the main differentiating factor between the Amazon supply chain and other online retailers. <\/p>\n\n\n\n<p>One of these options is the free two-day prime delivery. Another is the prime Now Option which gets products from one place to another in less than two hours.<\/p>\n\n\n\n<p>All these come into play to make Amazon&#8217;s delivery fast and easy.<\/p>\n\n\n\n<p>Other delivery strategies include:<\/p>\n\n\n\n<ul>\n<li>Prime (1-2 hours, Same Day, One-Day, and Two-Day Options)<\/li>\n\n\n\n<li>Hub &amp; Locker Delivery<\/li>\n\n\n\n<li>Amazon Key (In-Home \/ In-Car \/ In-Garage Options)<\/li>\n\n\n\n<li>Amazon Scout Robot (Currently in test mode)<\/li>\n\n\n\n<li>Hub Counter with local retail partners<\/li>\n\n\n\n<li>Designated Day Delivery (to group orders together)<\/li>\n\n\n\n<li>No-Rush Shipping (6-day shipping with a discount incentive)<\/li>\n\n\n\n<li>Release Date Deliveries (Pre-order Option)<\/li>\n<\/ul>\n\n\n\n<p>The retailer also leverages existing delivery routes via FedEx and UPS, too.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-amazon-supply-chain-technology\"><span id=\"3-amazon-supply-chain-technology\">3. Amazon Supply Chain: Technology<\/span><\/h3>\n\n\n\n<p class=\"has-text-align-justify\">Amazon&#8217;s supply chain has embraced technology to cut down costs (including warehousing and staffing costs) and work smarter thereby improving company efficiency and delivery speed.  <\/p>\n\n\n\n<p class=\"has-text-align-justify\">They use solutions like automation and robots in the fulfillment centers to pick, pack and ship inventory. For example, Amazon Scout Robot Delivery is being tested in some US locations before being widely rolled out.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">These tools not only up the company\u2019s efficiency and delivery speeds but also cut down on warehouse and staffing costs \u2013 freeing up funds for other logistics or supply chain needs.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">Interestingly, one of the best tech advancements has remained the anticipated Amazon Prime Air Drone Delivery. Although in development, the drones will deliver small packages to customers in less than 30 minutes once it is launched.<\/p>\n\n\n\n<p>Read about: <a href=\"https:\/\/kiiky.com\/wealth\/how-to-get-amazon-prime-for-free-forever\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Get Amazon Prime for Free Forever | 10 Easy Steps<\/a><\/p>\n\n\n\n<p class=\"has-text-align-justify\">Customers will require an Amazon-branded landing mat and live within 15 miles of the nearest drone-enabled fulfillment center to qualify for this delivery option.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-manufacturing\"><span id=\"4-manufacturing\">4. Manufacturing<\/span><\/h3>\n\n\n\n<p class=\"has-text-align-justify\">Amazon allows third-party sellers but has discovered that these products can be made cheaper and more profitable. This has led to it manufacturing its lower-cost products and white-labeling products from other sellers.<\/p>\n\n\n\n<p>This is a genius move by Amazon. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Currently, Amazon sells its own branded product line ranging from pet products to household goods and this keeps growing. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Essentially, they&#8217;ve found a way to keep everything in-house, from production to delivery.  It is a sure way to cut costs, skyrocket profit, and control the quality of products.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-5-global-reach-of-amazon-supply-chain\"><span id=\"5-global-reach-of-amazon-supply-chain\">5. Global Reach of Amazon supply chain <\/span><\/h3>\n\n\n\n<p class=\"has-text-align-justify\">Amazon operates 11 online marketplaces worldwide. This allows sellers to grow their business internationally without minding the physical location. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">With Amazon, sellers can\u00a0introduce\u00a0their brands and products to millions of customers in Amazon\u2019s marketplace.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">In addition, Amazon is set to build its second headquarters and partner with Whole Foods. This will change the food delivery system. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-6-pricing\"><span id=\"6-pricing\">6. Pricing<\/span><\/h3>\n\n\n\n<p class=\"has-text-align-justify\">One of the crucial aspects of any business is to remain cost-effective. They have successfully segregated their regular\/standard customers from the prime customers.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">Prime customers pay more for the cost of the product but benefit from free and fast delivery. Standard customers enjoy slower delivery.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">Likewise, when it comes to its FBA program, Amazon is aware that having a large amount of inventory will raise storage costs and slow delivery down.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">So, to ensure fulfillment centers are not overloaded, Amazon charges high long-term storage fees to its FBA sellers. The result is that sellers only send enough <a href=\"https:\/\/kiiky.com\/wealth\/category\/investing\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory<\/a> to fulfillment centers to meet demand, and thus, Amazon\u2019s costs do not rise.<\/p>\n\n\n\n<p>Read: <a href=\"https:\/\/kiiky.com\/wealth\/best-delivery-services-to-work-for\/\" target=\"_blank\" rel=\"noreferrer noopener\">20 Best Delivery Services to Work for in 2023 | Pays Well<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\"><span id=\"conclusion\">Conclusion<\/span><\/h2>\n\n\n\n<p>How exactly does the Amazon supply chain work? We have discussed that expressly in this article. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Amazon&#8217;s supply chain is patterned in that it works with economies of scale. Also, they are customer-centric, organized, and make use of technologies.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">The rate of Amazon\u2019s innovations has been incredible, making it difficult for competitors to keep up.<\/p>\n\n\n\n<p class=\"has-text-align-justify\">Lastly, Amazon continues to innovate regarding the supply chain to improve speed and efficiency. <\/p>\n\n\n\n<p class=\"has-text-align-justify\">Their strategies are worth emulating.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-references\"><span id=\"references\">References<\/span><\/h2>\n\n\n\n<ul>\n<li><a href=\"https:\/\/tinuiti.com\/blog\/amazon\/amazon-supply-chain\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Tinuity<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.business2community.com\/brandviews\/xsellco\/how-the-amazon-supply-chain-works-02359957\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Business2community<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.teikametrics.com\/blog\/how-amazon-supply-chain-works\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Teikametrics<\/a><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-recommendations\"><span id=\"recommendations\">Recommendations<\/span><\/h2>\n\n\n\n<ul>\n<li><a href=\"https:\/\/kiiky.com\/wealth\/win-amazon-giveaway\/\" target=\"_blank\" rel=\"noreferrer noopener\">13 ways to win Amazon giveaway and get stuffs for free<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/kiiky.com\/wealth\/how-to-make-50-dollars-daily-on-mturk\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Make $50- $100 a Day on MTurk in 2023 <\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/kiiky.com\/wealth\/makeup-websites-with-free-shipping\/\" target=\"_blank\" rel=\"noreferrer noopener\">10 Makeup Websites with Free Shipping in 2023<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/kiiky.com\/wealth\/free-amazon-gift-card\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Get Free Amazon Gift Cards: 24 Tricks <\/a><\/li>\n<\/ul>\n\n\n\n<p><\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"If you have ever wondered how Amazon processes millions of orders and rightly delivers products to customers, then&hellip;\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":10,"featured_media":7165,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1294],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v22.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Does Amazon Supply Chain Work in 2023 | Full Guide -<\/title>\n<meta name=\"description\" content=\"How does the Amazon supply chain work? 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