Amazon Warehousing & Distribution, or AWD, will launch in five European countries this week, allowing Amazon sellers to store products with the ecommerce giant for extended periods. The service enables Amazon to replenish stock at FBA fulfillment centers based on demand.
From 20 August, AWD will be available in Germany, France, Italy, Spain, and the United Kingdom, which are Europe’s five largest ecommerce markets, with Amazon leading the market in each of them.
For now, Amazon appears to be planning to use its existing distribution infrastructure for AWD. The company told selling partners that AWD helps address supply chain challenges by providing flat-rate, long-term bulk storage in Amazon distribution centres with automated replenishment to Fulfilment by Amazon (FBA) fulfillment centres across Europe.
Storage and Replenishment
In addition to the storage fee, Amazon charges sellers for processing and transportation to FBA centers. AWD gives sellers the flexibility to store more inventory with the company without FBA capacity constraints.
Its auto-replenishment capability eliminates manual restocking and reduces the risk of stock-outs, which can be particularly useful during peak periods such as Prime Day and Black Friday.
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AWD introduces an additional link between sellers’ inventory and the FBA network, for which Amazon adjusted its fee structure last year. This move increases Amazon’s control over the logistics chain for sellers on its platform.
Impact on Sellers
There are over one hundred thousand sellers in Europe, and Amazon generates the majority of sales in its European stores through third-party sellers, particularly small and medium-sized businesses. While AWD can make their operations easier, it also increases their dependence on Amazon.
Amazon positions itself as an ally to European SMEs and a catalyst for their growth. The company launched AWD in the United States four years ago, where selling partners can now also use the service to supply other sales channels.
This option is not part of the European launch for now, and it is not known whether AWD will also be rolled out in European markets beyond the five largest ones.
With AWD, Amazon is taking a step towards consolidating its logistics operations, which could have long-term implications for the ecommerce market in Europe. The service’s availability in the five largest European markets is a significant development, and its impact on sellers and the market as a whole will be closely watched.
