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As an Amazon seller, storing inventory, monitoring your inventory levels, and managing your supply chain can become a handful. This is especially true if you're selling on multiple ecommerce platforms.
Finding an efficient and innovative way to streamline your supply chain and manage inventory is crucial to success on the competitive Amazon marketplace.
Thankfully Amazon has introduced an innovative solution for FBA sellers - Amazon Warehousing and Distribution (AWD), a third-party logistics that helps you store and ship products within Amazon’s fulfillment network.
In this article, we will look closely at Amazon warehousing and distribution, how it works, the benefits of taking advantage of Amazon AWD, and how you can get started with Amazon AWD.
Amazon Warehousing and Distribution (AWD) is a comprehensive third-party logistics (3PL) solution introduced by Amazon to address the needs of ecommerce businesses for long-term inventory storage and distribution to Amazon fulfillment centers and other non-Amazon fulfillment channels.
With Amazon Warehousing and Distribution, you can streamline your supply chain using various features like pay-as-you-go storage for your bulk upstream inventories, access to the Amazon fulfillment network, and an auto-replenishment feature to prevent stockouts.
Some key features of the Amazon Warehousing and Distribution program include:
The whole purpose of the Amazon Warehousing and Distribution program is to streamline your supply chain and inventory management process.
You can ship your inventory, either less-than-truckload (LTL) or full-truckload (TL), to Amazon distribution centers within the United States using Amazon's Partnered Carrier program.
This program can also facilitate shipments from anywhere in the world to AWD sites for order fulfillment.
When shipping to AWD, carriers must select the correct AWD location specified in the "Confirm Carrier" step when booking via Amazon Seller Central. Each Purchase Order must match the destination Fulfillment Center listed on the appointment request. If these guidelines are not followed, it can lead to delayed or refused shipments.
As an Amazon seller using AWD, you can send your inventory in bulk to one of Amazon’s distribution centers. Unlike Fulfillment By Amazon (FBA), AWD does not have capacity limits, which gives you more flexible storage solutions.
Also, your inventory is relocated to the most adequate storage facilities. This optimizes your delivery times and fees without any additional charges.
You can manage all your Amazon and non-Amazon orders from a single point. Amazon orders are managed with Fulfillment by Amazon (FBA), while non-Amazon orders are handled with Amazon Multi-Channel Fulfillment (MCF).
Also, its auto-replenishment feature automatically reorders more inventory whenever your stock levels drop below a certain point, simplifying your inventory management process.
Amazon Warehousing and Distribution (AWD) offers numerous benefits, significantly improving your logistics and supply chain management. Let’s look at a few advantages of Amazon AWD:
Amazon AWD allows you to cut storage costs by a large percentage compared to traditional warehousing solutions. This makes AWD a cost-effective option for managing inventory.
AWD also operates on a transparent, pay-as-you-go pricing model with no hidden fees or long-term contracts, giving you a clear visibility into costs.
AWD features an automated distribution system that allows you to ship products directly to Amazon’s distribution centers, where they are stored until needed at the fulfillment centers. This automation increases your efficiency, reduces labor costs, and improves accuracy.
Also, its auto-replenishment feature ensures that there is a seamless flow of inventory into Amazon fulfillment centers. This saves you time and money by removing the need for manual inventory management.
Another benefit that comes with utilizing AWD is that it allows you to store as much or as little inventory as needed, with the ability to easily scale up or down as your business grows or changes. This flexibility is particularly great for seasonal sellers or those experiencing fluctuating demand.
By utilizing AWD, you can leverage Amazon’s extensive fulfillment network, which includes more than 175 fulfillment centers and 25 sorting centers across North America. This extensive network facilitates faster and more efficient delivery times to your customers.
AWD integrates with Fulfillment by Amazon (FBA), providing a seamless fulfillment solution for businesses. This integration ensures a smooth flow of inventory into Amazon’s fulfillment centers, regardless of whether the products are sold through Amazon or other channels.
AWD has introduced Supply Chain as a Service (SCaaS) which offers end-to-end supply chain management across all sales channels. With SCaaS, you can focus on core areas of your business while Amazon handles the logistics.
Amazon Accelerate also complements AWD by offering a range of benefits, including access to Amazon’s fulfillment network, advertising tools, and account management support, which helps the growth of small and medium-sized businesses on Amazon.
How do you become eligible for AWD? Well, here are some requirements you must meet to enroll for Amazon Warehousing and Distribution:
Overall, you want to ensure you meet all of Amazon’s requirements to be eligible for AWD. You can check here to get a view of all AWD requirements.
Here are a few steps to get started with
The first step is to enroll in the AWD program. Visit the AWD page in Seller Central by navigating to the menu > Growth > Explore Programs > Amazon Warehousing and Distribution.
Click “Enroll” at the top of the page to begin the enrollment process. This page also contains valuable information about the service. You will also find frequently asked questions to assist you throughout the enrollment process.
Before proceeding, you want to ensure you meet all the requirements for participation in AWD. This includes understanding the types of products eligible for AWD, complying with Amazon's policies, and preparing your inventory for shipment.
Once you are in, you can start creating shipments to AWD. You can use the tools available on your Amazon Seller Central to manage your inventory, create shipments, and track replenishments. These tools simplify the process of shipping to AWD, making it easy to manage your inventory within the program.
After setting up your shipments, book them for delivery to AWD through the Amazon Global Logistics (AGL) or Partnered Carrier Program (PCP). Ensure you select the correct AWD location and that your carrier is aware of the destination to avoid any hiccups.
Keep close tabs on your inventory milestones within AWD. This includes monitoring stock levels, tracking shipments, and managing inventory movements. AWD has extensive tools to help you stay up to date with your inventory status at all times.
The cost of Amazon Warehousing and Distribution (AWD) is structured on a pay-as-you-go basis, meaning you only pay for what you use. This approach gives you flexibility, allowing you to better manage your expenses. This pay-as-you-go model applies to processing, storage, and transportation. Processing fees are charged for a unit and cover the cost of receiving, labeling, and preparing your stock for storage. Transportation covers the cost of shipping your products from an AWD location to an Amazon fulfillment center.
Storage fees are calculated per cubic foot and include the costs of storing your inventory in an AWD location. These fees can vary depending on what period of year. For example, AWD may charge a surcharge fee during peak seasons.
One way to ensure that your AWD fees remain low is to optimize your inventory levels to avoid unnecessary storage fees. You can use Amazon's storage fee calculator to estimate your storage fee and plan accordingly. Using Amazon FBA can also be a cost-effective way to save on AWD fees. This is because Amazon handles everything from storage to packing and shipping of your products.
While Amazon Warehousing and Distribution (AWD) offers numerous benefits including saving costs, increased efficiency, and scalability, there are also some challenges you may face while using AWD. Let’s glimpse at a few of them:
Amazon Warehousing and Distribution (AWD) and Fulfillment by Amazon (FBA) serve different purposes within Amazon's ecosystem. AWD is a third-party logistics solution that provides long-term storage for upstream inventory in Amazon's distribution centers. It helps with the automatic movement of products to Amazon's Fulfillment Centers, ensuring that you have a steady supply of goods for immediate fulfillment needs. It is a self-service which means that you are responsible for arranging and paying for transportation costs from their facility to fulfillment centers.
FBA is a program where you can store your products in Amazon's fulfillment centers. Amazon then picks, packs, ships, and handles customer service for these products. This simplifies your selling process, especially if you don't have your warehousing infrastructure.
While AWD focuses on long-term storage and bulk inventory management, FBA, on the other hand, takes care of the entire order fulfillment process, from storage to shipping. AWD integrates with FBA, allowing for auto-replenishment from AWD to FBA to prevent stockouts. AWD is suitable if you are facing FBA storage limits and stockouts.
Amazon Warehousing and Distribution can be a fantastic choice if you have issues with shipment delays, frequent stockouts, a complicated supply chain, and limited storage capacities.
With AWD, you can rest knowing that your inventory is stored, replenished, and sent to Amazon fulfillment centers automatically, ensuring continuity and efficiency.
You’ve probably already considered selling on Amazon but its way easier than you think.
Call Us Now