Amazon Taps Merchants for Warehouse Space

Amazon Taps Merchants for Warehouse Space

Foto: Fotolia

Amazon is turning to merchants who sell on its marketplace for extra warehouse space, a less-costly way to expand inventory available for quick delivery, according to Bloomberg. Inventory available for delivery within two business days expanded by 6 million items under the Seller Fulfilled Prime program, the company announced. Earlier this year they introduced the program, which lets independent merchants sell goods on Amazon as “Prime Eligible” even if Amazon isn’t handling packaging and delivery.

It’s the latest sign the world’s biggest online retailer can’t build facilities quickly enough to meet demand for an ever-expanding assortment of goods that customers want delivered fast and free. Warehouse capacity issues and the cost of new facilities helped increase Amazon’s spending on order fulfillment 34 percent in the third quarter. The big expenses caused the company to miss analysts’ profit projections, driving down shares 8.8 percent since the results were reported.

Amazon’s revenue is projected to increase 28 percent to $137 billion this year, according to analysts’ estimates compiled by Bloomberg. The fast growth prompted the company to accelerate its warehouse building spree, with more than 15 fulfillment centers opening in California, Texas, Illinois, Kansas, New Jersey, Georgia and Florida that will collectively employ more than 12,000 workers.

Earlier this year, Amazon began restricting access to its warehouses due to capacity concerns and it changed its fee structure to penalize merchants who store slow-moving and off-season products during the busy holiday shopping period.

More from category

5% of Large Companies Prepared for the New Digital Business

5% of Large Companies Prepared for the New Digital Business

18 Apr 2017 comment

Dell EMC announced the results of a new study conducted by Enterprise Strategy Group (ESG). The study revealed that a majority of senior IT leaders and decision-making managers of large companies surveyed around the world indicate their organizations have yet to fully embrace the aspects of IT Transformation needed to remain competitive.

Google Denies Pay Disparity Allegations

Google Denies Pay Disparity Allegations

16 Apr 2017 comment

Google denied Department of Labor allegations that an in-progress investigation suggests “systemic compensation disparities against women” at the internet giant, according to Bloomberg.

Toshiba Said to Put Chip Sale Process Temporarily on Hold

Toshiba Said to Put Chip Sale Process Temporarily on Hold

16 Apr 2017 comment

Toshiba temporarily canceled all meetings and decisions related to the sale of its memory chip business to address concerns raised by an industry partner Western Digital, according to Bloomberg citing people familiar with the matter.