Amazon distribution channel
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Amazon has built an extensive global distribution network to support its e-commerce business. It operates numerous fulfillment centers worldwide that use highly automated processes to pick, pack, and ship a large volume of small parcels. Amazon obtains inventory through various channels, including direct purchases from publishers/suppliers, dropshipping, and third-party sellers. It aims to collaborate closely with suppliers and partners to increase efficiencies and optimize inventory levels through just-in-time and vendor-managed approaches. Amazon's distribution network is key to providing customers with a wide selection of products and a plethora of delivery options.
Amazon distribution channel
- 1. Distribution Channel of SATHIYA SORUBAN.E II nd Yr MBA
- 2. What is DISTRIBUTION ? • Right product • Right quantity • Right place • Right time CHANNEL ???? “HOW”
- 3. The major functions include • order processing • warehousing • inventory management • transportation
- 5. HI(STORY) -founded in 1994 as by Jeff Bezos - based in Seattle, Washington the global leader in e-commerce 1995 the company went online pioneer in electronic commerce build the world’s most customer–centric company To establish a place where customers could buy anything To went public 1997 Timely shipment satisfied customers improved market share repeat business “GET BIG FAST” increase the revenue per customer
- 6. Cntd… • Initially…online book retailer… no warehouse-no stock located close to INGRAM’s BOOK GROUP -physically handle and ship the books • Growth in domestic and international volumes • Amazon had to share its profit margins with Ingram • Ingram’s distribution capacity supports many other booksellers. Service issues for Amazon during peak demand -had to increase inventory levels and obtain strategically located distribution facilities
- 7. Timeline Amzon.com launch -1995- Music&video store -1998- Planetall,Junglee.com,bookpag launch es.co.in -1999- IMDB 3rd party selling -2003- CDnow Partner-toysRU -2004- Joyo.com Amazon publisher -2005- Booksurge Partner-Target -2006- Mobipocket Borders bookstore -2007- Shopmob Amazon auctions -2008- DPreview Kindle launch -2009- Abebooks, Audible.com, bookfinder.com Homegrocer- -2010- Zappos, drugstore.com amazon fresh Carsdirect.com -2011- Bookfinder.com,Woot, Quidsi, -2012- Kiva systems
- 8. PRODUCTS Books Movie, Music and Games Digital Download Kindle Computer And Office Electronics Home and garden Grocery, Health and beauty Toys, kids and baby Clothing, Shoes and jewelry Sports equipment and wears Tools, Auto and industrial
- 9. Five international stores of Amazon.com Amazon Canada, Amazon France, Amazon UK, Amazon Japan, Amazon Germany. Reasons: The Mother-Tongue Issue The Shipping Issue The Currency Issue The Local Product Issue The National Pride Issue Proper inventory control
- 10. Marketing Domains 1. Business to consumer (B2C) 2. Business to business (B2B) 3. Consumers to Consumers (C2C) 4. Consumers to Business ( C2B)
- 12. Distribution Channel- On-line channel has significant cost benefit -E-Books-Kindle reader -AmazonMP3 & Cloud Player -Instant Video -Mac Dowloadstore -AppStore for android -Amazon Cloud drive -Amazon Game Studios & Softwares
- 14. Distribution Channel- • Centalized distribution centers • States and places of Tax Advantage – Faster response time – Lower transportation cost • Use a hybrid approach in stocking and pricing • Pricing varies for delivery options • Supply Chain Strategy – Pure pull – Pure push – Push-pull
- 21. -most advanced order processing and fulfillment operations "Amazon's goal is to collaborate with our suppliers to increase efficiencies and improve inventory turnover,"
- 22. WHOLESALER INFORMATION PRODUCT AMAZON.COM INFORMATION PRODUCT CUSTOMER
- 23. -Large quantity of small parcels and WHOLESALER packages are involved in e-commerce related merchandise INFORMATION PRODUCT -variety of delivery AMAZON.COM options, including INFORMATION PRODUCT overnight and various international CUSTOMER shipping options
- 24. Direct Purchases PUBLISHER/ WHOLESALER SUPPLIER PRODUCT INFORMATION INFORMATION AMAZON INFORMATION PRODUCT CUSTOMER
- 25. gets paid before paying the distributor PUBLISHER/ WHOLESALER SUPPLIER PRODUCT INFORMATION INFORMATION AMAZON INFORMATION PRODUCT CUSTOMER
- 26. Distributer/ manufacturer Drop-shipping INFORMATION channel PRODUCT INFORMATION CUSTOMER
- 27. PUBLISHER/ WHOLESALER SUPPLIER PRODUCT INFORMATION INFORMATION SELLERS CENTAL AMAZON Other Sellers INFORMATION PRODUCT INFORMATION CUSTOMER
- 28. -highly automated pick-pack-ship processes PUBLISHER/ WHOLESALER SUPPLIER PRODUCT INFORMATION INFORMATION AMAZON Other Sellers INFORMATION PRODUCT INFORMATION CUSTOMER
- 29. A Plethora of Approaches • Outsourcing / 3 PLs • Bar-Coding / RFID • Collaborative Transportation Management • Just in Time Inventory • Vendor Managed Inventory • Quick Response • Collaborative Planning, Forecasting and Replenishment • Activity Based Costing • Build to OrderPartnerships / Alliances • Auctions / Exchanges
- 30. Amazon has developed an extensive global distribution network that continues to grow at a frenzied rate. ‘When you think of web shopping, you think of Amazon ’
Editor's Notes
- #3: To begin with…distribution is all about making available …..to put it in a single word-DELIVERDistribution channel just answers the question HOW for the above….
- #4: The answer includes….
- #5: For the next few mins I’ll give an overview of the distribution channels of……one of the largest E-tailers in business
- #6: Amazon has created a tremendous amount of loyalty among its customers through superior marketing and executionJeff wanted amazon to be the world’s most customer centric company where customers could buy anythingThe company aimed to get big fast……and the strategy was…
- #7: Pure online book retailer…i.e Zero inventory….So…company’s HQ was…the wholesaler of many titles…...which was its largest book supplier…..laterTo add to it aquisition of ingrams by barnes&nobles-its main competitor forced ……….
- #8: Shows the growth of amazon through the years…….Strategic partnerships
- #9: Theamzon store offers nearly 3.7 million products…..
- #10: The operation of amazon is divided into 2---North america and international….internationally….they have their own websites due to language,cultural and logistics issues…..
- #11: Amzonmarketpalace and auctionsDe facto online publisher for many authors and content writers……..
- #12: When everything is E exploit the D
- #13: On-line channel has significant cost benefit if books are downloadableMany e-books are available for kindle reader and other e book readers-amazon states that e-book sales has surpassed hardcover salesAllows for Buffering and downloading of music from the records of EMI/warnerbros/sony&universalProvides softwares and apps for apple productsProvides cloud services for small businessesVarious games and softwares are also there for download through……
- #14: -Tdyamzn is the world’s largest online retailer it delivers to millions of customers each day around the world with accuracy and efficiency
- #15: Covering different geographical areasThis have a competitive edge as they need not pay the taxes of the other serving state as they do not have their physical presence….They provide for standard and expedited shipping costs and also on delivery urgency……Amazon established several warehouses, where the inventory is procured using a push strategy, orders are shipped using a pull strategyMay still use a pure pull strategy for slower items
- #16: amzon has become one way where customer can find products and amazon fullfilment is the way how products find its way to the customers.
- #19: 21
- #20: 18
- #21: 9-Operates in india through junglee.com and is ready &set for australia…
- #22: They have an holding inventory of 15days and an inventory turnover of 26…..
- #23: Basic DC of amazon….shipped the books froms wholesalers to customers
- #26: And also it has a credit period of 45 days from its suppliers….
- #27: Exercises …for some b2b and international shipping transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer
- #28: Sellers ship their inventory directly to amazon. They can hve a direct access upon the status of their inventory using SELLERS CENTALVendor Managed Inventory
- #29: Which is delivered through 3plThe customer knows in less than a minute how long it will take toship the items and whether they will come in one package or separatelyASIN
- #31: About to implement same day delivery and thecomncept of yesterday shipping is on the line…..it has grown so big that…….