Amazon’s Current “Logistics 4.0” Going to What “5.0”?
Just-Out, Must-Read Book: “Behemoth: Amazon Rising” (By Robin Gaster)
I touted this book to distribution channel brass in last week’s blog. This blog is the first of a few to riff on some of Gaster’s chapters. This week, his: “Chapter 4: Logistics as Leverage”
Logistics 1.0 to 5.0 in 27 Years
Gaster details how Amazon’s logistics evolved to ever-greater from a “1.0” garage, e-bookstore in ’95 to it’s present “4.0”. Then, from 4.0, he speculates on how known trends and experiments foretell “5.0” by 2023 and beyond.
Scanning news on Amazon is good. But, far better is to digest Gaster’s deep investigative work. Your concerns about and ideas for partnering and countering Amazon will leap.
Other Views on Amazon 4.0.
To supplement Gaster’s “logistics 4.0”, visual/video fans can go to:
- Amazon Distribution Network Strategy | MWPVL International to see the present scale and (only announced) expansion plans for Amazon for every country leading with the US’ blowout.
- For the latest on the new robots and scaling productivity metrics within an AMZ fulfillment center, see this fast-paced video dated 11/2020: Inside Amazon’s Smart Warehouse – YouTube
- For an explanation of all of the steps within AMZ’s all-digital infrastructure and product/order flow, see: How Amazon’s Super-Complex Shipping System Works – YouTube
Adds:
AMZ just announced $25B in B2B sales for 2020 (30% CAGR since ’18). What future SKU sales will they steal?
Spot-Buys on:
- Whole-SKUs (no value-added processing) that fits through their expanding infrastructure.
- Emergency needs, especially when Amazon achieves same-day, trackable delivery in top 50 metro markets. (Drone deliveries – if and when – will be even faster.)
By contrast, safer sales will be on:
- Sole-supply, custom, replenishment systems co-designed and then maintained by distributors.
- All sales that are: processed; require value-added design; or, low-value-per-pound, freight-sensitive goods requiring special delivery vehicles.
AMZ’s Indirect effects may be bigger. End-users now want an Amazon buying experience. More factories will sell (select) items through the “Amazon channel”: often under a new brand name. And, the few, legacy distributors and suppliers that can collaborate to give customers a best omnichannel experience will take from the majority who won’t change.
And, what AMZ innovations don’t we see?
Think: configurators; Alexa voice commerce; fintech services; same-day metro “Shipping with Amazon” platform; drone deliveries; etc.
Stay informed, vigilant and innovative my friends. And get cost-to-serve analytics at the line/SKU level – to have a fighting chance in your planning.