As an Amazon seller, ensuring fast and reliable delivery of your products to customers is essential. But figuring out Amazon Logistics as your fulfillment and shipping partner can be complex!
In this comprehensive 2800+ word guide, I‘ll leverage my decade of experience as a successful Amazon FBA seller to explain everything you need to know about Amazon Logistics from a seller‘s perspective. Whether you are just getting started or looking to take your business to the next level, this insider‘s view will help you navigate Amazon‘s ever-evolving logistics ecosystem.
A Quick Overview of Amazon Logistics
First, let‘s quickly define what Amazon Logistics refers to as an Amazon seller:
Amazon Logistics enables sellers to leverage Amazon‘s warehouses, inventory storage, packing, and shipping capabilities to deliver orders to customers.
It covers end-to-end fulfillment and delivery – from storing your products across Amazon‘s global network of fulfillment centers to fast shipment via Amazon-owned planes, vehicles, and partners.
The benefits for sellers include:
- Access to Amazon‘s industry-leading logistics infrastructure and carrier rates
- Reduced overhead costs vs. managing your own warehousing and shipping
- Prime eligibility opens you up to millions of loyal customers
- Higher likelihood of winning the Buy Box when using FBA
- Automated picking, packing, and shipping frees up your time
- Amazon‘s customer service handles returns and refunds
But it also means giving up control over parts of your supply chain and relying on an external partner. As we‘ll explore in this guide, you need to weigh the pros and cons carefully as you scale up.
The Massive Scale of Amazon‘s Logistics Network
To understand Amazon Logistics, it helps to comprehend the vast scale of Amazon‘s fulfillment and delivery capabilities globally:
175+ fulfillment centers worldwide in Amazon‘s storage network
Warehouse space totals over 250 million square feet just in North America
100,000+ fulfillment robots deployed to automate warehouses
Over 20,000 Amazon semi-trucks moving inventory
40+ airplanes fly 2 million+ miles weekly carrying freight
133,000 delivery vans make up the global Amazon fleet
200+ package sorting facilities support faster delivery
Their logistics footprint keeps expanding year after year to meet demand. I‘ve seen firsthand how heavily they invest in infrastructure, technology, and workforce to build out this massive network.
As one example, Amazon Air‘s capacity has doubled over just the past two years. Their willingness to make big long-term bets provides us sellers the advantage of a world-class logistics backbone.
How FBA Inventory Is Stored and Shipped
When you decide to leverage FBA, understanding exactly how your inventory gets stored across Amazon‘s network and shipped to customers is important.
Here‘s an overview of the key facilities and processes:
These giant warehouses powered by Amazon robotics store millions of FBA products. Yours will be stowed alongside other sellers‘ inventory.
- Shelves are precisely tracked to enable quick picking
- Multi-story mezzanine layout improves storage density
- Robots bring shelves to pickers to optimize workflows
AR Sortation Centers
Packages from FCs are pre-sorted by zip code into shipment routes at these regional hubs.
- Automated routing sends inventory to correct next facility
- Reduces long-distance transport of individual boxes
- Some handle over 2 million packages per day!
Amazon Air Gateways
Air hubs load shipments onto Amazon-branded cargo planes which I‘ve seen in action.
- Flights connect key airports and regions overnight
- Critical for Prime shipments and longer routes
- Can transport over 1 million pounds per flight!
Last mile legs begin from these stations near end customers.
- Packages are loaded into vans for final deliveries
- Network of +400 DS sites across North America
- Handle tensured of thousands of vans and drivers
Independent contractors signed up through Amazon Flex make deliveries.
- Use their own vehicles to provide last mile service
- Leverage Flex app to select and plan routes
- Allow rapid scaling to meet variable demand
This simplified view shows how your FBA inventory flows seamlessly through Amazon‘s advanced fulfillment pipeline. Their technology handles optimizing routes and timing while you track orders and manage restocks from the seller portal.
How Sellers Can Take Advantage of FBA
Clearly Amazon Logistics provides tremendous advantages if used effectively as part of your ecommerce strategy. Here are some tips as an experienced seller for maximizing the benefits:
Choose the Right Warehouse Locations
Amazon‘s fulfillment centers are placed strategically to enable rapid delivery across regions. Be thoughtful in mapping your inventory:
- Ensure you have FBA quantity in the East, West, and Midwest
- Use two-day transport zones to align with Prime
- Refresh allocation ahead of peak periods of demand
Analyze Shipping Performance
Closely monitor your Seller Central reports on shipping times and costs:
- Identify products needing better coverage for Prime eligibility
- Find cases of inefficient or excessive shipping spend
- Optimize box sizes, inventory placement, and prep
Study Delivery Trends
Stay on top of Amazon‘s data on carrier performance in your high volume regions:
|Carrier||On-time %||Average Delay|
|Amazon Logistics||96%||8 hours|
Forecast volume spikes for Q4 early and shift inventory to align.
Communicate Issues Quickly
Stay in close contact with Amazon if inventory goes missing or you see logistics problems. Their dedicated account managers and Seller Support can investigate and address problems before they escalate.
Key Roles Within Amazon Logistics
To power fulfillment and delivery at massive scale, Amazon employs tens of thousands across a range of specialized logistics roles including:
These are the frontline workers in Amazon‘s fulfillment centers who actually pick, pack, and ship customer orders. It‘s a fast-paced job requiring commitment to quality and safety. Associates get training in warehouse protocols and systems to enable accurate, on-time order processing.
Delivery Station Managers
These operations leaders run the crucial last mile delivery stations. They oversee large teams of Amazon delivery drivers and handle fleet logistics. Excellent planning and execution ensures packages arrive to customers when expected.
Running Amazon‘s multi-modal freight networks requires experienced transportation leaders. They optimize routes, volumes, and carriers across long-haul trucking, air freight, drones, and more. These experts ensure cost-efficient movement of inventory at scale.
Amazon‘s strategic network planning team designs their future logistics footprint. They analyze data to inform expansion plans, infrastructure investments, and process improvements. Planners help drive major initiatives like new warehouses, air hubs, and delivery solutions.
To enable their cutting-edge fulfillment technology, Amazon employs thousands of engineers, technicians, and scientists. They design next-gen automation using robotics, AI, machine learning, and more to improve accuracy, speed, and safety.
This range of expertise lets Amazon Logistics excel at the complexity of global ecommerce delivery. As a seller, seeing these roles in action building out a world-class supply chain is remarkable.
Why Amazon Prioritizes Logistics Innovation
One of the most impressive aspects about Amazon Logistics is their constant push for innovation in fulfillment and transportation.
They are always trialing emerging technologies and processes before competitors:
Amazon Prime Air drones make deliveries direct to homes from local facilities and are being piloted in some regions after extensive testing.
Self-driving Amazon Scout devices are rolling down neighborhood sidewalks to drop off packages. Fully autonomous last mile vans are also in development.
Amazon is building a futuristic underground tunnel network for package transport to avoid congested streets in cities.
Highly automated fulfillment centers leverage tens of thousands of robots to store, pick, and move inventory efficiently.
Amazon is investing in electric vans, solar panels on facilities, and other green initiatives to reduce their carbon footprint.
This willingness to make big, long-term bets provides us as sellers the advantage of being future-ready. Amazon‘s logistics of tomorrow will likely look very different than today.
Mastering Inventory Management Across FCs
One key to effectively leveraging FBA is maintaining adequate inventory across multiple fulfillment centers. This ensures Prime eligibility for more orders and minimizes transfer fees.
Here are some best practices I recommend based on experience:
Use Fulfillment Center ID when shipping inventory to FBA to rightly allocate it based on demand.
Analyze FC Transfers in reports to find gaps needing replenishment.
Track FC Capacity in high volume regions and keep safety stock.
Plan Seasonal Demand and add inventory buffer ahead of Q4 peak.
Refresh Allocation regularly to keep popular products well stocked across regions.
Getting the details right on multi-FC inventory management takes work but pays dividends through better shipping speed.
How to Successfully Switch to FBA
If you currently manage your own order fulfillment but are looking to switch to FBA to access Amazon Logistics, here is a high-level transition process:
1. Analyze costs/benefits
Study your current warehouse and fulfillment costs vs. FBA fees to understand impact.
2. Audit inventory condition
Inspect products thoroughly and fix any issues to meet Amazon‘s standards upfront.
3. Label items
Prep and label every unit following Amazon‘s barcode requirements.
4. Ship to Amazon
Box up inventory organized by item and send to designated FBA facilities.
5. Monitor closely
Keep a close eye on inventory reports, warnings, and changes needed those first weeks.
6. Tweak process
Use Amazon feedback to improve prep, packaging, and restocking processes.
The transition takes work but I‘ve seen the significant benefits firsthand when done right. And Amazon‘s account reps provide guidance to streamline the process.
Tracking and Monitoring Your FBA Shipments
Amazon provides powerful tools as a seller to monitor shipments from placing the order to final delivery. Here are some tips to leverage them:
Use Shipment Status
Check on latest shipment status including estimated arrival at FC. Helps ensure receipt.
Turn on tracking for insight into transit location and delays.
Download detailed tracking reports from Seller Central to analyze.
Set Inventory Alerts
Create alerts for restock triggers, low quantities, delivery delays etc.
Chat or call support as needed for missing/damaged inventory or delivery problems.
There is visibility from Amazon‘s side but staying proactive gives you the data you need as a seller to keep supply and logistics running smoothly.
Innovations Sellers Can Implement
While we benefit enormously from Amazon‘s Logistics innovation, there are also improvements we can drive as sellers:
Leverage data to build predictive models forecasting sales, inventory needs, and logistics requirements. This enables smarter planning.
Adjust pricing algorithms dynamically based on inventory levels across FCs to maximize sales.
Automate restock triggers and purchase order generation based on multi-FC inventory status.
Analyze carrier performance trends and FBA facility speeds to shift inventory strategically for speed.
Use feedback and behavioral data to tweak product prep, packaging, and shipping methods.
Ship in sustainable packaging, optimize truck loads, reduce waste. Every bit counts.
Evaluating the Tradeoffs of FBA
While this guide has focused on the benefits of Amazon Logistics via FBA, it‘s smart as you plan your business growth to carefully evaluate the tradeoffs:
- Access to advanced fulfillment infrastructure and volume discounts
- Much lower capital investment vs. building your own warehousing and delivery
- Near limitless scale as your sales grow
- Deep experience managing complex logistics operations
- Loss of direct control over parts of your supply chain
- More challenging to differentiate on customer experience
- Must adhere strictly to Amazon‘s storage, prep and delivery protocols
- Fees for storage, fulfillment, and delivery that cut into margins
- Must manage both FBA and FBM inventory for optimal mix
Weighing these factors will help determine the right balance for your specific business as it evolves.
I hope this comprehensive, insider‘s guide provides you a helpful understanding of Amazon Logistics from a seller‘s perspective.
Leveraging their unmatched infrastructure and delivery network is a huge advantage but must be managed actively for success.
By mastering inventory placement, monitoring performance, finding optimizations, and tapping innovations, you can maximize fast Prime delivery for happy loyal customers.
Feel free to reach out if you have any other questions! I‘m always happy to share more insights from my decade in the trenches scaling an ecommerce business on Amazon.