As an Amazon seller, managing inventory and fulfilling orders can often be a challenging task. That’s where Amazon Warehousing & Distribution (AWD) comes into play. Simply put, AWD is an affordable bulk storage and distribution solution designed to simplify inventory management and streamline the order fulfilment process.
This article delves into the details of Amazon Warehousing & Distribution (AWD), exploring its role within Amazon’s logistics and fulfilment network. We’ll highlight the advantages of using AWD, explain its functionality, and provide essential information to help you get started. Whether you’re just starting out or are a seasoned seller, understanding how AWD works can be a game-changer for optimizing your operations and scaling your Amazon business.
What is Amazon Warehousing & Distribution (AWD)?
Amazon Warehousing & Distribution (AWD) is a cost-effective solution for storing bulk inventory and managing its distribution. Tailored for long-term storage needs, AWD allows sellers to seamlessly distribute their inventory to Amazon fulfilment centres as well as other non-Amazon channels. If you're an Amazon seller, AWD can help optimize your storage and logistics strategy, making it easier to manage your inventory and expand your business efficiently.
Overview of Amazon Warehousing & Distribution (AWD)
Amazon Warehousing & Distribution (AWD) is a third-party logistics (3PL) solution provided by Amazon Supply Chain. It offers businesses a flexible and cost-effective way to store and distribute bulk inventory upstream. One of AWD's standout features is its auto-replenishment system, which ensures that your Fulfilled by Amazon (FBA) inventory remains consistently stocked. Additionally, AWD pricing includes FBA inbound placement, eliminating separate charges for this service. This makes AWD an efficient and streamlined option for managing inventory and supporting your business growth.
Key Components of Amazon Warehousing & Distribution (AWD)
The Amazon Warehousing & Distribution (AWD) program was created to address common logistics challenges faced by third-party sellers, such as limited storage capacity, high fees, inconsistent inventory flow, and lack of visibility across the supply chain. Amazon designed AWD to resolve these issues effectively.
Here are the key components of AWD:
Low-Cost Storage AWD provides affordable storage solutions for bulk inventory, helping sellers reduce storage expenses.
Flexible Distribution Sellers can distribute inventory not only to Amazon fulfilment centres but also to other non-Amazon channels, offering more options for managing inventory.
Auto-Replenishment The auto-replenishment feature ensures that your FBA inventory remains in stock, preventing stockouts and ensuring uninterrupted sales.
End-to-End Visibility AWD offers complete visibility into your inventory’s journey, from its arrival at the warehouse to its shipment to customers, allowing for better inventory management.
In Summary Amazon Warehousing & Distribution (AWD) is a cost-efficient bulk inventory storage and distribution solution designed to help sellers streamline their logistics. By offering low-cost storage, flexible distribution options, auto-replenishment, and comprehensive inventory visibility, AWD serves as an ideal choice for sellers aiming to optimize their operations.
How Amazon Warehousing & Distribution (AWD) Works
Amazon Warehousing & Distribution (AWD) simplifies logistics for sellers by providing a cost-effective and flexible third-party logistics (3PL) solution. Here’s a step-by-step overview of how AWD works from the seller’s perspective:
Sending Inventory to Amazon Warehouses Sellers ship their inventory to Amazon’s warehouses, where it is stored in bulk. This low-cost storage option helps reduce logistics expenses.
Storage Once the inventory reaches Amazon’s warehouses, it is securely stored until sold. Amazon handles inventory management and auto-replenishment to ensure stock availability.
Order Fulfillment When a customer places an order, Amazon’s Fulfillment by Amazon (FBA) system picks, packs, and ships the item directly to the customer, streamlining the fulfilment process.
Delivery Amazon oversees the delivery process, ensuring orders are shipped promptly and reach customers on time.
Overall, AWD offers a seamless logistics solution for sellers looking to reduce costs and enhance efficiency. By leveraging Amazon’s warehouses and fulfilment system, sellers can focus on scaling their business while Amazon handles storage, inventory management, and order fulfilment.
Differences Between Amazon Warehousing & Distribution (AWD) and Fulfillment by Amazon (FBA)
While both Amazon Warehousing & Distribution (AWD) and Fulfillment by Amazon (FBA) are designed to help sellers manage inventory, they serve different purposes and cater to different needs. Here's a breakdown of the key differences:
1. Services Offered
FBA (Fulfillment by Amazon):
A comprehensive fulfilment service that covers storage, packing, shipping, and customer service.
Offers Prime eligibility, boosting product visibility and sales potential on Amazon.
Handles returns and customer support directly.
AWD (Amazon Warehousing & Distribution):
Primarily a storage and inventory distribution solution.
Allows sellers to store inventory in Amazon’s warehouses and distribute it to Amazon and non-Amazon channels.
Does not include packing, shipping, or customer service, which must be managed by the seller.
2. Pricing
FBA:
Charges for storage space, order handling, and shipping fees.
Includes a referral fee for each item sold on Amazon.
AWD:
Charges a storage fee based on inventory volume.
No additional fees for inbound placement.
Does not charge referral fees for items sold on Amazon.
3. Target Users
FBA:
Best suited for sellers seeking a complete fulfilment solution.
Ideal for those looking to leverage Amazon’s Prime eligibility to increase sales and visibility.
AWD:
Geared towards sellers needing bulk storage and distribution to multiple channels.
Suitable for sellers looking to avoid referral fees and manage fulfilment independently.
Summary
Choose FBA if you want an all-in-one fulfilment service that handles the entire sales process, including customer service and returns.
Choose AWD if you need flexible and cost-effective bulk storage, want to distribute inventory to multiple channels, and prefer to handle fulfilment and customer service on your own.
By understanding these differences, you can select the service that best aligns with your business goals and operational needs.
How Much Does Amazon Warehousing & Distribution (AWD) Cost?
If you're considering Amazon Warehousing & Distribution (AWD), it’s important to understand the costs involved. This section provides an overview of AWD’s pricing structure, highlights how it compares to FBA fees, and examines the affordable storage solutions it offers.
Understanding AWD Fees
Amazon Warehousing & Distribution (AWD) has a clear and simple pricing structure, with two main types of charges: storage fees and fulfilment fees.
Storage Fees
These are based on the volume of space your inventory occupies in Amazon’s warehouses.
Off-Peak Season: Storage fees are $0.87 per cubic foot for standard-size products and $0.56 per cubic foot for oversized products.
Peak Season: Storage fees may increase during high-demand periods.
Fulfillment Fees
Fulfillment fees depend on the weight and dimensions of your products, along with the shipping distance.
You can use Amazon's FBA Revenue Calculator to estimate the fulfilment costs for your products.
Overall, AWD offers low-cost storage options, with fulfilment fees tied to product size, weight, and destination, providing a transparent and flexible pricing model.
Comparison with FBA Fees
When comparing Amazon Warehousing & Distribution (AWD) to Fulfillment by Amazon (FBA), AWD offers a more cost-effective solution for bulk storage. Here’s a breakdown of the key differences:
AWD Fees
Storage Fees: You only pay for the space your inventory occupies in Amazon’s warehouses.
Fulfillment Fees: Charged when Amazon ships your products to customers, based on weight, size, and shipping distance.
FBA Fees
Fulfilment Fee: You pay a per-item fulfilment fee, ranging from $2.50 to $137.32, depending on the size and weight of the product.
Storage Fees: These are calculated based on the volume your inventory occupies, with additional costs during peak seasons.
Extra Costs: FBA includes additional charges such as processing fees and transportation fees, which are not part of AWD.
Overall, AWD is typically more cost-effective for sellers focusing on bulk storage, as it eliminates the per-item fulfilment and additional processing fees associated with FBA. FBA, while comprehensive in handling storage, shipping, and customer service, can be more expensive due to its broad set of fees. How to Begin Using Amazon Warehousing & Distribution (AWD)
If you're an Amazon seller looking to grow your business, Amazon Warehousing & Distribution (AWD) is a valuable option to explore. Here’s a simple, step-by-step guide to help you get started with AWD.
AWD Enrollment Process
To enrol in Amazon Warehousing & Distribution (AWD), follow these steps:
Log in to your Amazon seller account.
Navigate to the AWD page in Seller Central.
Click the "Enroll" button at the top of the page.
Complete the enrollment process by following the prompts.
After enrollment, you'll need to set up your account by providing essential business details, such as your tax ID and bank account information. Amazon AWD Eligibility Requirements
To qualify for Amazon Warehousing & Distribution (AWD), you must meet these criteria:
Have an active Amazon seller account.
Have a professional seller account.
Be eligible for Fulfillment by Amazon (FBA).
Have at least 500 units of inventory to store.
If you meet these requirements, you can begin using AWD to store and distribute your inventory to Amazon and other channels.
How Amazon AWD Can Benefit Sellers
As an ecommerce seller, managing inventory efficiently is a key challenge. Amazon Warehousing and Distribution (AWD) is designed to help sellers streamline their operations and overcome these difficulties. Here’s how you can benefit from using AWD:
Affordable Bulk Storage One of the main advantages of AWD is its cost-effective bulk storage. Storing your inventory in Amazon’s warehouses can reduce your storage costs by up to 75% compared to traditional warehousing methods.
Auto-Replenishment Feature AWD includes an auto-replenishment feature, which ensures that your inventory is automatically restocked when it runs low. This helps you avoid stockouts and ensures that your products are always available for customers.
Multi-Channel Distribution With AWD, you can distribute your products to various channels, including Amazon and other platforms. This flexibility helps you reach a broader audience and boost your sales.
No FBA Inbound Placement Fee When using Fulfillment by Amazon (FBA), there’s typically a fee for inbound placement. However, AWD eliminates this charge, helping you save on additional costs.
Comprehensive Inventory Tracking AWD offers end-to-end visibility of your inventory, giving you the ability to track stock levels, monitor sales, and make data-driven decisions for better business management.
Conclusion
Amazon Warehousing & Distribution (AWD) provides a comprehensive solution to optimize supply chain operations in 2024. By tapping into Amazon's robust logistics network, businesses can reduce operational complexities, benefit from efficient storage and faster fulfilment, and enhance customer satisfaction.
As e-commerce continues to expand, utilizing AWD gives businesses a competitive advantage by streamlining warehousing and distribution needs, allowing you to focus on growth and innovation. Whether you're a small business or a large enterprise, AWD can help you improve your logistics and drive success.
Frequently Asked Questions
What products can be stored in AWD?
Amazon Warehousing and Distribution (AWD) can accommodate a wide variety of products, including both small and large items, hazardous materials, and temperature-sensitive goods. However, certain restrictions apply, such as products that are prohibited by Amazon’s policies or require special handling or storage, which may not be eligible for AWD.
How can I track my inventory in AWD?
You can monitor your inventory in AWD via the Amazon Seller Central portal. It provides real-time updates on inventory levels, inbound shipments, and sales data. Additionally, you can set up alerts and notifications to help manage your inventory more effectively.
What is the Amazon distribution system?
The Amazon distribution system consists of fulfilment centres, sorting centres, and delivery stations. This network allows Amazon to efficiently store, process, and ship millions of products daily, ensuring fast and reliable delivery worldwide.
What is AWD shipping?
AWD shipping refers to the service offered by Amazon Warehousing and Distribution that facilitates shipping your products to Amazon’s fulfilment centres and other distribution channels. AWD shipping includes the cost of inbound placement for FBA and other Amazon services, eliminating the need for a separate fee for this service.
When was Amazon AWD launched? Amazon introduced AWD in 2022 in response to the increasing demand for affordable warehousing and distribution solutions among third-party sellers. Since its launch, AWD has become an integral part of Amazon’s logistics network, offering sellers a cost-effective way to store and distribute their products.
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