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Warehouse Management in the Era of Amazon

If you keep yourself updated in the retail game, it shouldn’t be news to you that American giant Amazon is going to cross into Australian borders with the speculation of destroying Australian retailers [1]. For any small business owner, the thought of a radical change in competition is frown worthy. It goes without saying that you will have to up your game drastically if you’re thinking of surviving this massive wave of change that’s hitting Australia by the end of 2018 [2].

How Amazon Fulfillment Works

Fulfillment by Amazon (in short, “FBA”), is the name of the process of the entire fulfillment process of Amazon. FBA is a rather straightforward process where a seller of any physical product contracts with Amazon to use FBA by sending the products to Amazon’s fulfillment centres. Amazon then takes over all control of the product from packaging, shipping and even customer service (for example, all refunds and complaints related to your product).

By using FBA, product listings on Amazon offer free shipping on qualifying orders or for Amazon Prime. Customers of businesses that use FBA benefit from gift wrapping services and “up-to-the-minute” countdown for One-Day delivery.

It is important to note that businesses that wish to utilise Amazon’s retail platform are not obliged to use FBA, however, the choice of not using FBA puts them at a visible disadvantage as their product listings will not display a “Fulfillment by Amazon” label which may reduce a brand’s trust.

Additionally, businesses that wish to use FBA but do not intend to sell products on Amazon’s retail platform (for whatever reason) are able to do so as Amazon’s FBA is not strictly for Amazon’s retail platform alone. FBA works as a logistics provider with the added advantage of a renowned brand backing your product delivery.

The technology fueling FBA is one of, if not, the best when it comes to managing inventory. The platform provided by Amazon’s FBA offers extreme ease-of-use and real-time updates on stock. The technology is so advanced that regardless of where the item is stored in the fulfillment centre, Amazon’s system is aware of exactly where it is based on previously performed scanning. The system then instructs a worker of the location of the item thus speeding up the processing time ensuring efficiency.

For an operation as massive as Amazon, the processing technology and setup is an absolute envy.

What This Means for the Small Business Owner

It is evident that the oncoming competition sounds extremely daunting to the small business owner. The retail bar will be raised as expectations on faster delivery, and better stock control will be met with Amazon experiences. Of course, the changes will not be easy, but when the going gets tough, the tough get going.

Amazon’s success is powered by an easy, fast and reliable delivery process for consumers. Great customer experience is exactly how Amazon built their brand, and it is exactly why people trust Amazon. Unfortunately, many small businesses fail to meet the expectations consumers have over delivery and reliability with estimated delivery times being a 1 week waiting period.

On the other hand, certain businesses are expected to boom despite Amazon’s entry into Australian territories. Many online retailers already have good processing platforms that enable optimal performance, including keeping tracking of stock, packing goods, dispatching goods and providing excellent customer support. Of course, software is essential for optimal operations although they tend to be less sophisticated when compared to what Amazon has.

Nevertheless, this is the standard that is being set and must be followed by small business owners wishing to compete with Amazon. By focusing on providing the absolute best customer experience, small businesses do not have to feel threatened by Amazon’s introduction to Australia.

About the author

Don Milne is a writer for Melbourne-based online retailer Blossom Costumes. 

[1] https://www.gizmodo.com.au/2017/03/experts-believe-amazon-will-destroy-australian-retail/

[2] http://www.businessinsider.com/it-looks-like-amazons-ambitions-for-australia-are-bigger-than-anyone-thought-2017-3?IR=T

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