Increasing scrutiny could stall rise of ecommerce platforms, as TikTok faces US ban
The Loadstar has launched a series of reports on the ecommerce sector, which has been driving growth ...
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Amazon singled out regionalisation and its remodelled supply chain offering as it announced surging positivity in its third-quarter results.
Net income over the three-month period soared 244% against 2022, from $2.9bn to $9.9bn, on the back of $11.2bn operating income compared with $2.5bn a year earlier – a 353% uptick.
CEO Andy Jassy said: “The benefits of moving from a single national fulfilment network in the US to eight distinct regions are exceeding our optimistic expectations.
“Perhaps most importantly, it is putting us on pace to deliver the fastest delivery speeds for Prime customers in our 29-year history. This is a particularly action-packed time of year at Amazon, and we’re excited for what’s to come.”
The three months to September marked Amazon’s second full quarter of US regionalisation, which Mr Jassy said had enabled network simplification.
Reducing the number of line-haul lanes, the e-commerce behemoth has focused on increasing volumes within the lanes, adding more direct fulfilment centre-to-delivery station connections.
He added: “We also focused on optimising inventory placement in the regionalised network which, coupled with the simplification, contributes to an overall reduction in cost to serve.”
In September, it launched its remodelled end-to-end supply chain package, Supply Chain by Amazon, which essentially sees it collect, ship and deliver products to customers from international manufacturing sites.
Chief strategy officer at Transportation Insight John Haber said the system’s management of customs, ground transport and inventory management would be a big boost for its users.
CEO of e-commerce specialist RW Commerce Consult Rick Watson was among voices welcoming the service, noting that his own clients had described it as “pitch perfect”.
Mr Jassy said the new product had received a “very positive early response”, even though questions remained over Amazon having access to users’ data across the chain, from sourcing to distribution.
For Mr Watson, though, this was not a major issue. He said that, with many customers already trusting Amazon Web Services, it was “not too much of a stretch” to see small and medium businesses getting behind it, as he noted that “replicating this level of scale and reliability may be nearly impossible otherwise.”
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