Optimize Inventory & Fulfillment
Amazon Distribution is critical for eCommerce sellers on Amazon to run a successful business. From inventory management to seamless order fulfillment, the logistics of distributing your products across multiple channels can seem overwhelming at first. However, once you understand the key players, processes, and Amazon’s distribution services, you’ll be well-equipped to scale your operations and reduce logistical friction.
In this comprehensive guide, we’ll dive deep into Amazon Warehousing and Distribution (AWD), how Amazon Distribution functions, and its role in optimizing the eCommerce supply chain. This article will also explore how sellers can leverage AWD for cost-effective inventory storage, FBA replenishment, and multi-channel distribution, along with real-world examples, problems, and practical solutions for improving your logistics on Amazon.
What is Amazon Distribution?
Amazon Distribution refers to the network Amazon uses to store, move, and deliver products to customers, designed to help eCommerce sellers fulfill orders efficiently while keeping costs low and delivery times fast.
At its core, Amazon Distribution includes key components like Fulfillment by Amazon (FBA), Amazon Warehousing and Distribution (AWD), and various distribution channels that optimize inventory management. FBA is the most commonly used service, where Amazon handles storage, picking, packing, shipping, and customer service. For sellers with larger inventories or multi-channel sales, AWD offers a cost-effective bulk storage solution with automatic replenishment to FBA.
Additionally, Amazon’s distribution network includes third-party logistics (3PL), Amazon Global Logistics (AGL), and the Partnered Carrier Program (PCP), which help manage inventory, reduce shipping costs, and expand sales across various marketplaces. By leveraging these services, sellers can streamline operations, ensure product availability, and improve efficiency.
Amazon Warehousing and Distribution (AWD)
Amazon Warehousing and Distribution (AWD) is one of Amazon’s most advanced logistics solutions, specifically tailored to help sellers manage large-scale inventory efficiently. Designed for businesses that require long-term storage, AWD streamlines the process of storing and distributing products across multiple sales channels—both within Amazon and beyond.
AWD allows sellers to store bulk inventory in Amazon’s strategically placed warehouses, enabling seamless movement of products to Amazon Fulfillment Centers (FBA) as demand fluctuates. This service is particularly beneficial for businesses that need to manage high inventory volumes while maintaining control over costs and stock levels.
How AWD Works
Why AWD is Essential for eCommerce Sellers
AWD simplifies and optimizes the inventory management process, making it an indispensable tool for eCommerce businesses. Here’s why AWD is crucial for sellers:
Streamlined Inventory Management
- Centralized System Consolidates storage and distribution into one unified process, reducing the complexity of handling multiple logistics providers.
- Real-Time Inventory Updates Automatically replenishes stock based on demand levels, ensuring that products are always available to customers.
Cost Efficiency
- Lower Storage Costs AWD provides cost-effective storage solutions, especially for businesses with large inventory needs. Sellers only pay for the space they use, without the overhead of maintaining multiple warehouses.
- Reduced Operational Costs By using AWD’s automatic replenishment system, sellers save time and resources that would otherwise be spent manually tracking inventory and shipping products to FBA.
Increased Speed and Reliability
- Faster Fulfillment With AWD, your inventory is stored closer to Amazon’s fulfillment centers, reducing the time it takes to replenish stock and deliver products to customers.
- Reliable Stock Availability The auto-replenishment feature ensures that your stock is always at the right levels, especially during peak shopping seasons, reducing the risk of stockouts.
Scalability for Growing Businesses
- Effortless Scaling As your business grows, AWD enables you to scale your inventory management without needing to invest in additional infrastructure. Whether you’re selling on Amazon or other platforms, AWD provides a flexible solution for expanding operations.
- Multi-Channel Flexibility AWD’s ability to distribute inventory across various sales channels means you can reach more customers with the same pool of inventory, enhancing your ability to scale.
Enhanced Inventory Control
- Real-Time Visibility With AWD, you can track inventory in real-time, giving you better control over your stock levels and ensuring that you’re always prepared for customer demand.
- Avoiding Overstocks Automatic stock management ensures that you don’t over-order products, reducing the risk of excess inventory and the associated costs.
Key Benefits of AWD
Example of AWD in Action
- Imagine you sell fitness equipment. During peak seasons, your inventory in FBA might sell out quickly. With AWD, you can store large quantities of items like dumbbells and yoga mats in Amazon’s warehouses. As sales rise, AWD automatically replenishes your FBA stock, ensuring your products stay available and you never run out of stock during busy periods.
By using Amazon Warehousing and Distribution (AWD), sellers can streamline inventory management, reduce costs, and efficiently scale their business, all while benefiting from effective Amazon Account Management, gaining a competitive edge in the marketplace.
How Does Amazon Distribution Work?
Amazon’s distribution system is a complex network designed to facilitate the efficient storage, movement, and delivery of products to customers. The system operates across several key levels to ensure sellers can quickly fulfill orders with minimal effort. These levels include Amazon Fulfillment Centers (FBA), Amazon Warehousing and Distribution (AWD), and Multi-Channel Distribution (MCD).
Amazon Fulfillment Centers (FBA)
FBA is the cornerstone of Amazon’s fulfillment services and the most widely used option for sellers. With FBA, sellers store their products in Amazon’s fulfillment centers, and Amazon takes care of picking, packing, shipping, and handling customer service. This allows sellers to focus on growing their business while Amazon handles the logistical complexities.
How It Works
- Inventory Storage Sellers send their products to Amazon’s FBA warehouses, where the inventory is stored until an order is placed.
- Order Fulfillment When a customer places an order, Amazon automatically picks, packs, and ships the product from their fulfillment center.
- Customer Service & Returns Amazon also handles customer service, returns, and refunds, making the process seamless for sellers.
Example If you sell wireless headphones, you would send a bulk shipment to one of Amazon’s FBA centers. When a customer places an order, Amazon takes care of the entire fulfillment process. This includes shipping the headphones quickly, often with Prime delivery, ensuring a fast and reliable service to the end customer. This enables you to reach a wider customer base and scale your business without worrying about the day-to-day logistics.
Amazon Warehousing and Distribution (AWD)
AWD is designed for sellers who require bulk storage and want to ensure their inventory is always available across multiple sales channels. Instead of sending smaller shipments to FBA centers, sellers can ship large quantities of inventory to AWD warehouses, which act as centralized storage facilities.
How It Works
- Cost-Effective Bulk Storage AWD provides a low-cost storage solution for large volumes of inventory, helping sellers manage their stock at a reduced cost compared to traditional warehousing.
- Automatic Replenishment As stock levels in FBA warehouses drop, AWD automatically triggers the replenishment process, ensuring there is no disruption in availability.
- Efficient Inventory Management AWD helps sellers keep track of inventory across multiple platforms, offering automatic replenishment to FBA based on demand.
Example Suppose you sell fitness apparel, such as leggings and sports bras, and have a substantial stock stored in AWD. As your inventory in FBA sells out, AWD will automatically send replenishment stock to FBA to ensure your products are always available for customers. This helps avoid stockouts during peak seasons or sales events, keeping your business running smoothly and maintaining consistent sales.
Multi-Channel Distribution (MCD)
Multi-Channel Distribution (MCD) is a powerful feature that enables sellers to distribute inventory stored in AWD across multiple sales platforms. This means that your stock can be managed centrally, but orders from different sales channels, such as your own website, eBay, Walmart, or other marketplaces, can be fulfilled from the same inventory pool. MCD helps sellers expand their reach and manage inventory more efficiently across all sales channels.
How It Works
- Centralized Inventory All inventory is stored in AWD’s warehouses, making it easy to manage large amounts of stock without worrying about where it’s stored.
- Seamless Fulfillment Across Channels Orders from different platforms, whether Amazon or external marketplaces, are fulfilled from the same inventory pool. This eliminates the need for duplicating stock for each platform, improving operational efficiency.
- Unified Inventory Management With MCD, your inventory levels are synced across all channels, making it easier to track stock and prevent overordering.
Example If you sell smartphones on both Amazon and eBay, MCD allows you to store all inventory in AWD. When a smartphone sells on eBay, AWD will fulfill the order from the same stock used for Amazon. This eliminates the need to manage separate inventories, reducing the risk of overstocking or stockouts across platforms, and simplifying your logistics.
Benefits of Amazon Distribution
By leveraging FBA, AWD, and MCD, Amazon sellers can:
By understanding how Amazon Distribution works and leveraging these services, sellers can streamline their operations, reduce logistical complexities, and ensure their products are always available to customers, no matter where they shop.
Key Benefits of Amazon Distribution
Amazon’s distribution system offers numerous advantages to sellers, which include the efficiency and optimization provided by Amazon Supply Chain Management.
No FBA Inbound Placement Fees
Amazon used to charge an FBA inbound placement fee when splitting shipments into multiple fulfillment centers. However, with AWD, there are no inbound placement fees, which results in cost savings, especially for large shipments.
Problem Previously, sellers could incur additional shipping costs when sending inventory to multiple FBA warehouses.
Solution AWD eliminates this extra fee, saving sellers money and simplifying logistics.
Automatic FBA Replenishment
AWD’s auto-replenishment feature automatically monitors stock levels in FBA and replenishes inventory as needed. This reduces the need for manual stock level checks and prevents stockouts.
Problem Running out of stock on Amazon can lead to lost sales and potentially hurt your product’s ranking.
Solution AWD ensures that your FBA stock is always topped off, helping you avoid stockouts and ensuring continuous availability of your products.
Low-Cost Bulk Storage
One of the standout features of AWD is its affordable bulk storage options. Sellers can store large quantities of products at lower rates, which reduces overall storage costs, especially for sellers with high-volume inventory needs.
Problem Many sellers struggle with high storage costs in Amazon’s FBA program, especially during peak seasons.
Solution With AWD, sellers can store inventory in bulk at low-cost rates, reducing the burden of high storage fees.
Faster and More Reliable Shipping
AWD guarantees that inventory is visible and processed quickly, helping sellers maintain fast delivery times to customers. The service promises to have your products received and visible within 2-4 days, while replenishment to FBA occurs within 10-14 days.
Problem Delays in receiving inventory can cause disruptions in your sales pipeline, particularly during peak seasons.
Solution AWD streamlines the shipping process, ensuring that inventory is processed and delivered swiftly to Amazon’s fulfillment centers.
Challenges of Amazon Distribution: Common Problems and Solutions
While Amazon Distribution offers numerous advantages, it’s not without its challenges. Let’s look at common problems that sellers face and how to overcome them.
Legitimacy and IP Complaints
- Problem Many Amazon sellers face IP complaints or product authenticity issues, especially when sourcing from wholesalers or distributors who don’t have a direct relationship with the brand.
Solution The key to avoiding these issues is working with authorized distributors or directly with the brand. Both can provide valid invoices that prove the authenticity of the products, which Amazon is more likely to accept in case of disputes.
Example Suppose you’re selling Apple iPhones. Purchasing directly from an authorized Apple distributor gives you legitimacy, which protects you from potential IP complaints from competitors.
Increased Costs During Peak Seasons
- Problem During the holiday season, FBA fees typically rise, and there may be limited capacity for storing additional inventory, which can result in higher costs and stockouts.
Solution By leveraging AWD for bulk storage, you can manage inventory ahead of peak periods and avoid the cost spikes typically associated with FBA during holidays. AWD allows sellers to store more inventory in Amazon warehouses at affordable rates and automatically replenish stock when necessary.
Managing Multi-Channel Fulfillment
- Problem Selling on multiple platforms (Amazon, eBay, your website, etc.) often results in inventory management headaches, especially when it comes to syncing stock levels across channels.
Solution Multi-Channel Distribution (MCD) in AWD allows you to manage your inventory centrally, ensuring that stock levels are automatically updated and orders from various platforms are fulfilled from the same inventory pool.
About FBA Brigade: Your Partner in Amazon Distribution
At FBA Brigade, we understand the complexities of Amazon Distribution and are committed to helping you streamline your logistics, improve operational efficiency, and scale your business successfully. As a professional, full-service corporate partner, we specialize in providing end-to-end solutions tailored to your unique needs.
Our team of experts is well-versed in Fulfillment by Amazon (FBA), Amazon Warehousing and Distribution (AWD), and Multi-Channel Distribution (MCD), offering a comprehensive approach to managing your Amazon business. Whether you’re struggling with inventory management, shipping delays, or sales channel integration, we provide practical solutions to help you overcome these challenges.
Why Choose FBA Brigade?
Get Started Today
We invite you to book a meeting with us to discuss your business needs and learn how FBA Brigade can help optimize your Amazon Distribution strategy. We also offer a free audit to identify areas where you can improve your logistics and save on costs.
Contact us today to discover how we can support your growth and ensure your success in the Amazon marketplace.
Conclusion
Amazon Distribution is a powerful tool for sellers looking to streamline their logistics, reduce costs, and scale their business. Whether you’re using Amazon Warehousing and Distribution (AWD) to store bulk inventory, take advantage of automatic FBA replenishment, or manage multi-channel fulfillment, AWD simplifies the entire process.
Understanding the key players in Amazon wholesale, including brands, distributors, and wholesalers, is essential for making informed decisions about sourcing and inventory management. Working with authorized suppliers ensures your products are legitimate and ready for Amazon’s distribution network.
At FBA Brigade, we specialize in helping sellers optimize their Amazon operations, from distribution to fulfillment. We’re committed to guiding you through every step of your journey to ensure your Amazon business thrives.
