How Amazon and Flexport Fulfill ‘From Factory Floor to Customer Door’
Amazon and Flexport launched new services aimed at simplifying the supply chain for SMBs.
The e-commerce giant unveiled Supply Chain by Amazon ahead of its annual Accelerate seller conference. Sellers can use the service to distribute products in bulk from Amazon’s warehouses to fulfillment channels and retail stores not affiliated with the tech titan.
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The launch comes as the Federal Trade Commission (FTC) is preparing an antitrust suit against Amazon, which recently expanded its Buy with Prime service to Shopify merchants. The company also relaunched the Seller Fulfilled Prime (SFP) delivery program, allowing third-party Amazon sellers to ship Prime-eligible products out of their own warehouses.
“With Supply Chain by Amazon, Amazon will pick up sellers’ inventory directly from their factory, and manage the supply chain logistics through delivery to customers’ doorsteps,” said Dharmesh Mehta, Amazon vice president of worldwide selling partner services. “Sellers will be able to offload even more of the complexity of their supply chain logistics to Amazon, both for the products they sell in Amazon’s store and through other sales channels including online and physical store locations.”
Flexport, on the other hand, rolled out both an end-to-end supply chain platform for SMBs called Revolution, as well as a $149 per month membership program, Flexport+.
Revolution, built from the Deliverr fulfillment technology Flexport acquired from Shopify earlier this year, gives users access to more than 20 supply chain services on a single page, enabling merchants to sell in more channels and marketplaces and automate the movement of their products.
Revolution’s AI capabilities recommend the best services to meet merchant need, such as deciding between air freight and ocean freight based on costs and shipping deadlines. SMBs can get replenishment recommendations for low-stock SKUs and ensure fulfillment centers, marketplaces and stores are always stocked within limits.
The replenishment capabilities work within Fulfillment by Amazon (FBA), Walmart Fulfillment Services (WFS), and more than 15 wholesale channels, including Costco, Target and Nordstrom. Merchants can also leverage fulfillment and last-mile delivery services for Shopify, Amazon’s SFP program, and their own e-commerce stores—enabling merchants to form a single pool of inventory.
Merchants using Amazon’s offering can access the new Multi-Channel Distribution (MCD) capability, to move their products in bulk from Amazon’s low-cost Warehouse and Distribution (AWD) bulk storage service to warehouses run by other logistics providers, markets and stores. Like the Flexport platform, MCD allows Amazon selling partners to replenish across all their sales and fulfillment channels from a single inventory pool.
While the Flexport launch comes as the digital freight forwarder is going back to its freight roots as CEO Dave Clark leaves the company, Ryan Petersen pointed to the self-serve SMB product as an example of the kind of technology the firm would prioritize when he announced his return as chief exec on Twitter.
Flexport said the new offerings aim to reduce costs and automate much of the work that SMBs do when communicating with freight brokers, customs brokers and other providers.
“Global trade is as old as time, but for entrepreneurs, it hasn’t gotten any easier to move your goods from factory floor to customer door,” Petersen said in a statement. “I started my entrepreneurial journey selling scooters, so I know first-hand that entrepreneurs want to focus on innovating and selling their products everywhere their customers are, instead of getting bogged down by the complexity that often comes with logistics.”
While Flexport dismissed several of Clark’s executive hires and rescinded dozens of job offers for prospective employees hired under his regime, the company retained executive vice president of SMB product and technology Parisa Sadrzadeh, who jumped to Flexport from Amazon a month after Clark’s start and was a lead on the Revolution project.
The Flexport+ membership includes priority handling of shipments that can cut shipping times by up to 15 percent, and offers exclusive access to apply for up to 120-day term financing and concierge services from supply chain experts.
Sellers using Amazon’s offering can also get discounts of up to 25 percent on all cross-border shipments bound for the AWD bulk storage service, which has now been expanded to all sellers. Sellers can store products and bulk at discounts of up to 80 percent compared to FBA storage fees, without peak pricing during the fourth quarter, Amazon said,
MCD is currently in a pilot testing program with an initial set of sellers, but should open to all Amazon sellers later this year.
