Mastering Supply Chain with Amazon: What Every Seller Must Know

By WalBayZon — From Factory to Customer, Seamless Logistics for Growth

Introduction

In eCommerce, supply chain is what separates brands that limp along from brands that scale. Selling is one thing. Delivering reliably, globally, and profitably is another.

Amazon’s “Supply Chain by Amazon” is a suite of end-to-end logistics and fulfillment services that bring Amazon’s internal strengths to third-party sellers. It’s designed to simplify the orchestration between manufacturing, cross-border shipping, storage, replenishment, and final delivery.

In this blog, you’ll learn:

1. What supply chain & supply chain management mean
   

2. How Amazon’s “Supply Chain by Amazon” works
   

3. Key components & services (AGL, AWD, SEND, etc.)
   

4. Benefits for sellers (cost, speed, reliability)
   

5. Challenges, risks & considerations
   

6. Best practices & WalBayZon’s strategic approach
   

1. What Is Supply Chain & Supply Chain Management?

A supply chain covers all steps — from sourcing raw materials to delivering finished goods to customers.

Supply chain management (SCM) is the coordination, optimization, and control of all those steps — procurement, manufacturing, transportation, warehousing, fulfillment, and returns — to maximize efficiency, reduce costs, and improve service.

In modern eCommerce, SCM also includes forecasting demand, handling risks, managing inventories across geographies, leveraging data, and automating flows.

2. What Is “Supply Chain by Amazon”?

“Supply Chain by Amazon” is Amazon’s packaged vision to offer third-party sellers a fully managed, automated supply chain suite.

Rather than sellers cobbling together logistics, warehousing, shipping partners, and inventory systems, Amazon offers integrated services:

• Amazon Global Logistics (AGL): From manufacturer origin to destination (ocean, air, cross-border).
  

• Amazon Warehousing & Distribution (AWD): Bulk storage and distribution to fulfillment centers and channels.
  

• SEND (Seller Export & Delivery): Global shipping for inventory from origin to Amazon’s storage (AWD / FBA).
  

• Multi-Channel Fulfillment (MCF): Use Amazon’s fulfillment for orders from non-Amazon channels.
  

• Auto-replenishment & inventory placement optimization: Amazon handles restocking to FBA centers from AWD based on demand forecasting.
  

Effectively, sellers can hand over much of their logistics and let Amazon run the supply chain “engine.” Amazon claims sellers using the end-to-end solution see 20% higher sales conversion, due to better stock availability and faster delivery.

3. Key Components & How They Work

Let’s break down the building blocks:

Amazon Global Logistics (AGL)

• Ships goods from origin (manufacturers / suppliers) via ocean or air to Amazon's network (FBA or AWD).
  

• Amazon includes customs clearance, last-mile pickup, and supports managing cross-border complexity.
  

• Offers discounts for freight bookings.
  

AWD — Amazon Warehousing & Distribution

• A bulk storage and distribution layer. Inventory stored in AWD becomes “buyable” once it arrives there (before being forwarded to FBA).
  

• Auto-replenishment from AWD to FBA helps maintain stock levels in FBA centers.
  

• AWD supports both Amazon and non-Amazon channels.
  

SEND (Seller Export & Delivery)

• Lets sellers ship inventory from origin countries to Amazon’s storage (AWD / FBA) using Amazon’s partner carriers.
  

• Simplifies paperwork, customs, and shipping by handling much of the logistics under one interface (Seller Central).
  

Multi-Channel Fulfillment (MCF)

• Use the same inventory in Amazon to fulfill orders from your own website, Shopify, or other stores.
  

• Amazon picks, packs, and ships across channels.
  

Automated Replenishment & Inventory Optimization

• Amazon’s proprietary algorithms monitor demand, stock levels, seasonal patterns, and trigger replenishment from AWD to FBA.
  

• This ensures your listings stay in stock, improving conversion. Amazon claims stock consistency drives ~15% higher unit sales for many sellers.
  

4. Benefits for Sellers

Why should a seller consider using supply chain automation via Amazon? Here are the core advantages:

✅ Lower Costs / Better Efficiency

• Amazon optimizes shipping, placement, and transfer to avoid redundant movements.

• Bulk storage (AWD) often cheaper than using multiple 3PLs.

• Auto-replenishment reduces manual logistics overhead.
  

✅ Faster & More Reliable Delivery

• Inventory closer to demand centers means faster delivery (same-day, next-day).

• Better fulfillment performance helps rankings & customer satisfaction.
  

✅ Better Stock & Availability

• Amazon keeps your products in “buyable” status as soon as they’re received in AWD.

• Intelligent replenishment reduces "out of stock" times.
  

✅ Simplified Operations & Focus

You hand over supply chain orchestration to Amazon — free up your team to focus on product development, marketing, and growth.

✅ Sales Uplift

Amazon reports that sellers using the full Supply Chain solution see ~20% higher conversion due to improved delivery and stock reliability.

5. Challenges, Risks & Considerations

As with any powerful system, there are tradeoffs and considerations you must plan for:

⚠ Costs & Fee Structures

While efficiencies are available, you still pay for transportation, storage, and handling. For some SKUs with tight margins, these costs can erode profits.

⚠ Dependency & Control Loss

Handing over logistics means you lose direct control over every node in the chain — you rely on Amazon for execution and transparency.

⚠ Forecasting Risks & Misplacement

If forecasting errs or demand surges unexpectedly, you may face stockouts or overstock in wrong locations.

⚠ Suitability & Eligibility

Not all SKUs or sellers may qualify. Some product categories, origin countries, or markets may have limitations under Amazon’s supply chain offering.

⚠ Brand Perception (for “bulk” / “overflow” stock)

Using distribution, AWD, or bulk placement could shift how quickly your product reaches fulfillment — some premium or limited-edition brands may be cautious about overexposure.

⚠ International Complexity

Cross-border transport, customs, duties, and regulatory compliance can still pose risk. Even with Amazon handling much, you must ensure correct documentation.

6. Best Practices & WalBayZon Strategy

To get the most from Amazon’s supply chain toolkit, here’s how WalBayZon would advise implementing it:

1. Segment Your SKUs

Apply supply chain automation to your top-performing, stable SKUs first. Let experimental or niche SKUs follow classic 3PL or FBM processes until proven.

2. Map Lead Times & Safety Stocks

Don’t remove buffers prematurely. Use historical data, seasonality, and supplier reliability to set safe reorder levels.

3. Monitor Performance & Replenishment

Track how often AWD → FBA replenishment happens, how often stockouts occur, and how inventory cycles. Adjust thresholds accordingly.

4. Optimize Placement

Where possible, allow Amazon’s algorithm to choose which FBA centers to populate. That may lower inter-node transfers.

5. Run Hybrid Models

Use Amazon’s supply chain for core SKUs, and continue FBM / 3PL for low-margin, heavy, or niche items.

6. Build a Dashboard

Create a view combining Amazon-provided metrics (inventory, fill rates, forecast, transportation) with your margin models to identify pain points.

7. Plan for Overflow & Returns

Ensure your plan accounts for returns, seasonal peaks, or overstock that needs cold storage or liquidation.

7. Supply Chain & Sustainability, Risk Management

Risk Management

Supply chains face risks — supplier failure, disruption (natural, political), demand shifts, logistics blockages. Supply chain management must incorporate:

• Supplier diversification

• Buffer inventory

• Alternative shipping routes

• Real-time visibility and alerts

• Contractual backup plans

(Supplier risk management is a critical domain in SCM theory)

Sustainability & Ethics

Amazon expects sellers (and the products they source) to comply with ethical standards. Their Supply Chain Standards require manufacturing and production align with compliance, labor, environment, etc.

Using optimized supply chain reduces redundant transportation, packing waste, and carbon emissions — beneficial for brand reputation and ESG positioning.

8. Conclusion & Next Steps

Supply chain is the backbone of eCommerce success. “Supply Chain by Amazon” offers third-party sellers a compelling, integrated path to tap Amazon’s logistics scale — reducing complexity, improving delivery, and boosting sales.

That said, it’s not a silver bullet. Use it with strategy: segment SKUs, monitor performance, balance control & automation, and retain fallback capacity.