What Exactly is Amazonation?
While Webster’s Dictionary hasn’t quite caught up to speed, the term Amazonation is a reality in the logistics world. It seems everywhere you look, there is a concept, technology, or operational philosophy that was introduced by Amazon. And due to the company’s popularity, its model was copied by other companies in the logistics space.
And quite frankly, who can blame them? Amazon is a giant that absolutely controls the modern supply chain. On average, the company sells nearly $25 billion in products each year to customers across the globe. They offer same-day shipping, in-house fulfillment, and operate multiple fulfillment centers that deliver hundreds of thousands of packages daily.
Overall, it’s a solid business model that is implemented correctly. Through this model, Amazon has literally changed the game of order fulfillment.
And this brings us to the term ‘Amazonation’. While it’s not officially listed in the dictionary, it is a practical term that explains an overall philosophy for integrating creative solutions for improving the efficiency of the way items are purchased, fulfilled, and followed-up on by a business.
Let’s examine a few of the most popular Amazonation trends…
The Integration of Supply Chain Management
The reason why Amazon became the giant of order fulfillment all boils down to a few simple supply chain management concepts.
For starters, they have found a way to integrate technology that helps directly connect a huge network of warehouses with customers. Essentially, Amazon has found a way to seamlessly integrate top of the line supply chain management procedures into their larger than life network.
A few of the ways they accomplish this monumental task is by activating a few important supply chain management concepts.
Outsourcing Inventory Management and Insourcing Logistics Operations
Did you know that more than 80 percent of Amazon.com’s sales are not fulfilled directly through their own warehouses? These are orders that are purchased through their platform but shipped by the direct manufacturer or an independent distributor. However, this doesn’t mean that these items are fulfilled through outside sources. In fact, most same day or next day delivery services are handled by in-house logistics operations.
Whether it’s an order that is picked up and delivered by Amazon delivery fleets, or by independent contractors using their delivery app, a major key to their same-day order fulfillment success is having a vast network of ‘in-house’ delivery options. When a fulfillment operation does not need to depend on a third-party for fulfillment, their success rate increases – simply because they control the delivery process.
Many growing e-commerce companies are beginning to implement Amazonation inventory management and inhouse fulfillment. More often than not, they do so by either growing their delivery network or partnering with delivery app services.
Expanding Delivery Options
Amazon has made receiving products simple for consumers due to its multiple delivery options. At the root of their strategy is complying with the delivery preferences of consumers. Their Prime Delivery service offers premium, same or next day delivery services, that are fulfilled in-house. They also partner with larger Express delivery companies to offer next day or two-day shipping.
Amazonation includes seeking the input of customers. It deals with determining which delivery services they prefer, then following through to find cost-effective methods for providing it.
There was a time when Amazon simply sold books, but eventually, they revolutionized this segment by creating electronic devices that allow customers to download their favorite books and magazines in electric media. This was the Kindle, and it showed that a fulfillment center could also get involved in manufacturing products that help accelerate the products they sell.
Amazon obviously has the capital and bandwidth to manage its own air fleet and purchase retail outlets. The smaller fulfillment center or e-Commerce business simply does not have this type of power.
However, by integrating a few of these Amazonation strategies, brands can cater to the growing needs to an evolving consumer base. Professional 3PL’s like Redwood Logistics have been actively following the trends set forth by Amazon – and creating ones of their own making. If you’re looking to improve your order fulfillment game through Amazonation, contact Redwood Logistics.