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Amazon's logistics model

by:VIPUTRANS     2020-07-18
Let me explain the details of Amazon's logistics model:

Amazon's logistics promotion has become a classic case in the e-commerce industry. How did it reduce logistics costs by nearly half in five years?

  Different from the deep involvement of domestic enterprises in the logistics and transportation links, Amazon's distribution links are all outsourced. Part of the United States is outsourced to the United States Postal Service and UPS, and international part is outsourced to Jihua Logistics CEVA, FedEx, etc.

  How does Amazon strengthen its control over logistics?

   The answer is to build a 'logistics center' on a large scale. As of the end of 2009, Amazon had approximately 1.1 million square meters of logistics and storage centers in the United States and 530,000 square meters overseas. In addition to providing delivery and storage and storage turnover services for Amazon's own goods, the above logistics center also provides logistics services for third-party sellers on the Amazon website.

  Whether it is an individual seller or a SME, you can send the goods to the nearest Amazon logistics center. Amazon charges a storage fee of US$0.45 per cubic foot per month (equivalent to RMB 106 per cubic meter per month).

  After the customer places an order, Amazon employees will be responsible for order processing, packaging, shipping, third-party delivery, and return and exchange matters, and will charge an order execution fee of USD 0.5 per item or USD 0.40 per pound.

  Currently, the products sold by third parties account for 30% of Amazon's total sales. There are 1.9 million active sellers and more than 1 million kinds of goods distributed through the Amazon system.

  Through the logistics center, Amazon concentrated the scattered order demand (not only the information concentration, but also the concentration of goods), and then docked with large-scale logistics companies such as UPS and Jihua Logistics to exert the scale effect of overall distribution.

   The large-scale platform also provides space for the application of modern technology. In 2006, Amazon selected 'Burlington North Santa Fe Logistics' BNSF Logistics as its provider of 'logistics management solutions' in the United States, through further optimization of the logistics system to reduce logistics costs.
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