Amazon's Groundbreaking Supply Chain Service: Expanding Beyond Online Retail

In a prominent announcement at this year's Accelerate conference, Amazon.Com Inc AMZN launched Supply Chain by Amazon, a cutting-edge suite of fully automated supply chain services to empower sellers. 

This revolutionary solution will likely transform how products move from manufacturers to consumers worldwide.

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Amazon's Supply Chain service will enable its 2 million merchant partners to seamlessly deliver inventory not only to online shoppers but also directly to physical retail stores and warehouses, Bloomberg reports. 

This strategic move marks Amazon's ambitious expansion into physical retail, extending its logistics network beyond online sales.

With the Supply Chain by Amazon, the process commences as Amazon collects inventory from manufacturing facilities globally, including overseeing international shipping, customs clearance, ground transportation, and bulk inventory storage. 

Moreover, the service streamlines inventory replenishment across various platforms, including Amazon's and other sales channels, leading to expedited direct-to-customer deliveries. 

This innovative approach empowers sellers to shift their focus toward product development and business growth while Amazon efficiently handles logistics, reduces operational costs, and enhances delivery speed.

One remarkable feature of this service is the introduction of Multi-Channel Distribution, enabling merchants to dispatch their inventory to Amazon's warehouses and facilities managed by other logistics providers, online marketplaces, and physical stores. 

This newfound flexibility provides sellers with a broader reach and distribution options.

Furthermore, Amazon's Supply Chain service is poised to synergize with its existing programs, including Buy with Prime. 

This initiative allows merchants to pay Amazon for product deliveries to customers who make purchases on non-Amazon websites, further extending the company's revenue streams.

Amazon has significantly diversified its income sources as online sales growth stabilizes. Approximately 60% of products sold on Amazon originate from independent merchants. 

In Q2, Amazon's seller services generated a staggering $32.3 billion, reflecting an impressive 18% year-on-year growth, surpassing even the lucrative cloud services business.

In the U.S., Amazon continues to dominate, capturing approximately 37.6% of all online spending.

Amazon is amid many shareholder-friendly efforts, including designing custom microchips for AWS' generative AI training and downsizing loss-making divisions, logistics and delivery mechanism restructuring, and a grocery business overhaul.

Price Action: AMZN shares traded lower by 0.34% at $142.61 on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.