Amazon Expands Program to Handle Logistics for Retailers

Amazon is expanding a program launched in October called Amazon Seller Flex, which allows retailers to have it oversee logistics and deliveries from their warehouses to the U.S. Postal Service for final-mile fulfillment, Bloomberg reports.

It helps Amazon cut costs and relieve congestion in its fulfillment centers and build more network density. Sellers benefit as FBA Onsite relieves them of shipping product to an Amazon FC, and they’re also able to take advantage of the ecommerce giant’s own significant volume-driven discounts from UPS and FedEx. Critically though, Amazon calls the shots in terms of carrier selection and transportation based on efficiency and cost, not the retailer, which will undoubtedly impact carrier volume.

The expansion involves asking more retailers to participate in the program, now renamed FBA Onsite,  according to Bloomberg. Seller Flex initially invited a select group of 50 retailers when it launched in October, according to a report in CNBC.

At one warehouse of a participating retailer, a special section was set up to handle goods sold on Amazon. Participants can also use the company’s proprietary warehouse management system (WMS) software, CNBC reported.

Seller Flex and now FBA Onsite are a natural evolution from Seller Fulfilled Prime, a program introduced in late 2015 that allowed merchants to make their products Prime-eligible, as long as they could deliver them within the two-day guarantee window. That proved too costly for many, limiting the number of sign-ups.