Key Insights for the Strategic Optimisation of Amazon Supply Chain and Logistics

Whatever you offer, the efficiency of your supply chain directly impacts your success, especially when it comes to selling on platforms like Amazon. You’ve hired an Amazon marketing agency and optimised your listings, now it’s time to make sure your supply chain is up to the task of delivering your products to your customers’ doorsteps.

With an unprecedented amount of orders to ship – Amazon delivered 2.5 billion packages in 2019, equating to around 20 packages per household – the platform has had to develop unique operations and technology to deal with this growing demand for efficiency, which is where Amazon Logistics comes in. As the demand for quick and reliable delivery grows – 62% of people expect next-day delivery options – businesses need to ensure their operations are optimised for peak performance.

What Does Amazon Logistics Mean?

Amazon is a marketplace designed with sellers in mind and provides everything you need to navigate the logistics of selling online. This includes offering a comprehensive logistics service, which is the shipping and delivery service operated by Amazon. Knowing that a lot goes into being an ecommerce business, Amazon has put everything a third-party seller needs to succeed into place – including an impressive network of fulfilment centres, drivers, technology and tracking – streamlining the supply chain and logistics of selling on Amazon.

Amazon Logistics in the UK includes the Fulfilled by Merchant (FBM) and Fulfilment by Amazon (FBA) programs. FBA focuses on storing products in dedicated Amazon fulfilment centres and then packing and shipping them directly to customers, whereas FBM involves managing these logistics yourself. Sellers can also take advantage of tracking for Amazon Logistics, which provides peace of mind, transparency and reliability as products move through the supply chain.

How Does the Amazon Supply Chain Work?

Amazon has solidified itself as a reliable, trustworthy and speedy way to order goods online, making it the ‘go-to’ marketplace for many consumers. But, this is only possible because of the Amazon Logistics model. A lot of work has gone into perfecting the Amazon supply chain network over the years and hard work really does pay off. As a seller, you can sit back and relax, knowing that Amazon has put everything in place to help with the ins and outs of getting goods to customers quickly.

Amazon’s global logistics in the UK starts at its fulfilment centres, which are Amazon Logistics warehouses where products from suppliers are stored. These centres are located across the country, ensuring Amazon can deliver orders quickly and efficiently, regardless of where a customer is based. Products are picked, packed and shipped from the nearest fulfilment centre. This speeds up the shipping process and cuts down on how far goods travel. Amazon uses its own delivery network – made up of delivery drivers, Amazon Logistics partners and people working as part of the Amazon Logistics Flex program – to get products to customers as quickly as possible.

Getting the Most Out of Amazon Logistics and the Amazon Supply Chain as a Seller

A lot goes into Amazon’s supply chain – it’s an expertly crafted system that combines technology, logistics and a dedicated infrastructure to make shopping as easy and convenient as possible for customers in the UK and further afield. In 2021, Amazon Logistics generated $3.1 billion from parcel deliveries in the UK, a 29% increase compared to 2020, highlighting that it’s certainly working. But, to get the most out of everything that Amazon has put into place, you must optimise your supply chain and the logistical side of being a successful seller.

• Automate Inventory Management – Managing stock is somewhat of a balancing act. You need to have enough inventory to accept sales and keep customers satisfied – after all, listing a product as ‘out of stock’ can damage your reputation and send loyal customers elsewhere – but you don’t want too much, as this can lead to costly storage and wasted goods. This is by no means an easy task, but automating inventory management can simplify things.
• Utilise Amazon’s FBA Program – FBA is a key part of the Amazon Logistics program, which combines storing, packaging and shipping of products. Instead of worrying about managing your own warehouse or shipping, you can utilise Amazon’s impressive logistics network and benefit from an efficient delivery process. This also reduces overhead costs and improves delivery times, boosting customer satisfaction and brand reputation.
• Strive for Quick Delivery Times – With 91% of ecommerce shoppers choosing where to buy based on next-day delivery, Amazon’s fast delivery options are a huge selling point. This is why you must optimise your supply chain to ensure goods reach customers as quickly as possible. This means being aware of your inventory levels and negotiating quick lead times with your supplier.
• Take Advantage of Different Shipping Options – Amazon provides a range of shipping programs that can be beneficial for sellers, including Subscribe and Save. This encourages repeat purchases by offering customers a discount for committing to ongoing deliveries, enabling you to accurately forecast upcoming sales and streamline inventory management.
• Use Tracking for Amazon Logistics – Putting tracking with Amazon Logistics into place can improve selling on the platform by providing real-time updates on the movement of products. With precise tracking, you can gain insight into how to improve delivery performance, ensuring that products reach customers on time. This enhances customer satisfaction and increases the likelihood of positive reviews.

Optimising your Amazon supply chain and logistics is key to staying competitive and meeting customers’ demands. Shoppers are used to orders arriving quickly, and offering a three to five-day window for delivery on Amazon is no longer enough. With many sellers offering same-day and next-day delivery, getting goods to customers as quickly as possible is non-negotiable.

By streamlining your supply chain, you can improve delivery efficiency and boost your overall success. When it comes to achieving success online, our Amazon Seller Central consultants are here to help. Get in touch to find out more.