Three Popular Supply Chain Models for Your Business
Q4 is coming. But are you prepared for the big events orders?
We are diving into 3 of the most popular Amazon supply chain models to find the answer (and double-check your chosen logistic solution for Amazon sellers).
1PL (First Party Logistics):
1PL implies that you choose to perform your logistics functions in-house. This way, you maintain comprehensive control over your supply chain activities.
- Operations: Managing transportation, inventory, and deliveries internally without counting on external logistics providers.
- Advantages: You have direct control over logistics, potential cost savings due to no third-party involvement, and enhanced adaptability and flexibility.
- Challenges: This model requires significant resources, infrastructure, and management efforts. It's ideal for you if you have the capability to invest in and manage your own logistics operations, prioritizing internal control and customization.
3PL (Third Party Logistics):
In the 3PL model, you outsource your logistics and supply chain functions to specialized logistics service providers.
- Operations: logistics, warehousing, distribution, and even order fulfillment, optimizing Amazon FBA logistics and inventory management.
- Advantages: You have access to extensive logistics expertise and networks. 3PL is cost-effective due to economies of scale and allows you to focus on your core business activities.
- Challenges: You can lose control over logistics operations and dependency on external entities. It's ideal for you if you are seeking efficient and expert Amazon fulfillment solutions without managing it internally.
Amazon Warehouse & Distribution (AWD):
AWD refers to Amazon’s sophisticated network of facilities designed to facilitate your storage, sorting, packing, and shipping of your products.
- Innovation: AWD is an integration of advanced technology, automation, and data analytics. It enables the swift processing of millions of orders and enhances customer experience. This model is often used as part of a broader Amazon FBA strategy.
- Strategies: Continuous innovation to optimize logistics and distribution processes by focusing on efficiency, speed, and adaptability.
- Impact: AWD sets excellent industry benchmarks with technological advancements, expanding the traditional supply chain management. For many Amazon sellers, AWD is a key pillar of their Amazon FBA management approach.
Understanding these differences is crucial for you to choose your Amazon supply chain strategy.
AMZ Bees, FZE LLC
