Amazon's Newest Storage Solution Could Eliminate 3PL Needs
Amazon has announced the launch of Amazon Warehousing & Distribution (AWD), describing it as a "new, state-of-the-art low-cost upstream inventory storage and distribution solution."
Sellers who enroll in AWD will be able to use the program to:
- Use auto-replenishment feature to send inventory from AWD to Amazon fulfillment centers
- Send inventory to Amazon without any storage limits
- Integrate supply chain by using AWD as their single provider of upstream inventory storage and fulfillment
- Get pay-as-you-go, long-term storage rates
The AWD program could signal big changes for FBA sellers who have historically needed to utilize a separate 3rd party logistics (3PL) to service their long term storage and multi-channel fulfillment needs. In 2023, sellers will be able to use AWD to send inventory to any location, including to wholesale customers or brick-and-mortar stores, according to Amazon.
Amazon says AWD represents a "continuation of Amazon’s multiyear investment in its warehousing and distribution network to support sellers and better serve customers, we are introducing a new solution that enables sellers to use new, purpose-built facilities for bulk inventory storage and automated distribution."
In a recent survey of U.S. Amazon sellers, the company reports that the three biggest upstream warehousing and distribution operations pain points are high prices for storage, complicated fee structures, and insufficient storage capacity.
AWD provides an additional option for these supply chain challenges and, for some sellers, could significantly cut logistics costs.