Amazon expands warehouses in UK

Amazon is set to open its 13th fulfillment center in the UK at Tilbury, Essex (England), according to Internet Retailer.

The new fulfillment center will utilize Amazon Robotics technology, which has been shown to decrease the amount of time it takes to process orders. In addition, the technology will reduce the amount of space needed to warehouse goods. The fulfillment center is scheduled to open in 2017 and will employ roughly 1,500 people, bringing the total number of Amazon UK employees to 15,500.

The new fulfillment center will allow Amazon to expand its product selection through its Fulfillment by Amazon (FBA) service. Third-party sellers on Amazon can elect to fulfill their orders through FBA, which means that Amazon will store their products in one of several Amazon fulfillment centers and will then pick, pack, ship, and provide customer service for the respective products once an order is placed. Through the implementation of Amazon Robotics, the new fulfillment center will be able to store 50% more items per square foot.

Opening a new fulfillment center could pave the way for more third-party sellers to participate on its online marketplace. With its latest fulfillment center, Amazon has the potential to store additional products for not only existing third-party merchants, but also for new entrants.

However, the recent rise of Amazon third-party sellers has led to a price war among sellers, forcing them to lower prices in order to maintain sales. Amazon’s third-party merchants may look to smaller online marketplaces, such as Etsy, to stay competitive. This could have negative repercussions, though, given the immense number of online shoppers who currently use Amazon.

The parcel delivery industry — a segment of the shipping sector that deals with the transportation of packages to consumers — is booming thanks to e-commerce growth, and players outside the industry want a piece of the pie. 

Evan Bakker, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the future of shipping that looks at efforts by Amazon, Alibaba, and Walmart to handle more of their own shipping and concludes that big retailers are well positioned to disrupt the parcel industry.

Here are some of the key points from the report: 

• Transportation and logistics could be the next billion dollar opportunity for e-commerce companies. The global shipping market, including ocean, air, and truck freight, is a $2.1 trillion market, according to World Bank, Boeing, and Golden Valley Co.
• There is much at stake for legacy shipping companies, which have seen a boom in parcel delivery as e-commerce spending has risen. Twenty different partners currently share the duties of shipping Amazon's 600 million packages a year, with FedEx, USPS, and UPS moving the most.
• Amazon, Alibaba, and Walmart have so far focused on building out their last-mile delivery and logistics services but are increasingly going after the middle- and first-mile of the shipping chain. 
• Amazon has already made major moves across each stage of the shipping journey. It launched same-day delivery service, which it handles through its own fleet of carriers, cutting out any third-party shippers. The company also recently began establishing shipping routes between China and North America.
• Walmart's interest in expanding its transportation and logistics operations is almost purely related to cost-savings. It's begun leasing shipping containers to transport manufactured goods from China and is making greater use of lockers and in-store pickup options to cut down on delivery costs.
• Alibaba has begun leasing containers on ships, similar to Amazon's Dragon Boat initiative. This means that Alibaba Logistics can now facilitate first-mile shipping for third-party merchants on its marketplace.

In full, the report:

• Sizes the market for the shipping industry.
• Explains how the industry operates in broad terms.
• Suggests why major e-commerce retailers should disrupt the space.
• Outlines the shipping initiatives of Amazon, Walmart, and Alibaba.
• Concludes how these moves might impact traditional carriers.

Interested in getting the full report? Here are two ways to access it:

1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally.
2. Purchase & download the full report from our research store. 

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the future of shipping.

(SOURCE)

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Amazon FBA Tries to Clear Out Euro Warehouses

By Ina Steiner

Amazon is giving sellers in Europe an incentive to clear out slow-moving inventory from its Fulfilment by Amazon warehouses in preparation for the busy holiday shopping season. An FBA seller from the UK forwarded an email with details of a promotion that kicked off on September 1st.

"Amazon is running a free removals and Long Term Storage Fee refund promotion from 1 September, 2016 to 30 September, 2016. This promotion is applicable to units in U.K., France and Italy fulfilment centres on which Long Term Storage Fees (LTSF) was charged on 15 August 2016."

The promotion applies only to units in the U.K., France and Italy fulfilment centers on which Long Term Storage Fee were charged in August 2016.

Another point to keep in mind: "Units of ASINs removed under this promotion cannot be sent to U.K., France or Italy fulfilment centres till January 1, 2017, unless your inventory level falls below the number of units you have sold of this ASIN in the previous four weeks."

Sellers who qualify have until September 30th to place their removal order.

(SOURCE)

- FYI to anyone who needs it!

The Pros and Cons of Buying a 'Fulfillment by Amazon' Business

By Mark Daoust

What happens when an entrepreneur leverages the power of a big business to create a small one?

For an increasing number of small business owners, the answer can be found in the Fulfillment by Amazon (FBA) business model.

The FBA model is exactly what it sounds like: business owners provide products, and Amazon handles packing, shipping and contextual customer support.

FBA businesses have grown in popularity since Amazon launched the service in 2006, but both creation and sales of FBA businesses really began to skyrocket between 2015-16.

With FBA trending hot and heavy, is buying an Amazon-based business right for you? In this post, I'll explain the pros and cons of buying an FBA business, and let you decide.

Five benefits of buying an Amazon FBA business.

The appeal of an FBA business might seem obvious to you.

After all, who wouldn't want to hand off most of the headaches that come with fulfillment to someone else? But that's just the primary benefit of acquiring an FBA business. Consider these five benefits as well.

1. Outsourcing fulfillment frees you up to handle higher-level tasks.

With Amazon handling the - sometimes literal -- heavy lifting, you can focus on growth-oriented tasks such as conversion rate optimization (CRO), targeted marketing and new product development.

2. You and your customers benefit from Amazon's perks.

From free two-day shipping with Prime to greater product visibility in the marketplace and the automatic credibility that comes with selling your wares on the site of an established, trusted retail giant, your FBA business will provide customers with a next-level experience that's hard to replicate via traditional ecommerce. And don't forget, Amazon will also provide top-notch customer service.

3. Scalability is built-in.

Beyond the perks of Prime and processing, Amazon's worldwide reach, massive warehousing and fulfilment capabilities, and well-established infrastructure give you the power to grow your business more effectively as time and demand dictate.

In addition, FBA businesses can act as a nexus for multiple sales channels. Offering your products across the web, and directing those sales through your FBA business, can attract customers, who may not start their search for your goods on Amazon, yet still fill the needs of those customers through its system.

4. You don't need to pound the pavement for customers.

Amazon has already built the world's largest customer base, and you're gaining access to it with an FBA business. This base can be expanded further with multiple channels.

5. Reduced costs mean increased profits.

Without the need for a website or your own shipping and customer service, profits will likely be higher, even with Amazon's service fees.

An FBA business is definitely not "hands-free," but it does leverage the power of Amazon to give you the ability to make the most of your time, effort and resources in building a steady earner in the ecommerce space.

Three challenges of an FBA business.

Of course, it's not all wine and roses. As with most acquisitions, FBA businesses come with their own set of challenges and potential dealbreakers for potential buyers.

1. It's a jungle in there.

Every FBA business is fighting for survival and prominence in a complex ecosystem ruled by Amazon's own Buy Box algorithm. FBA businesses receive greater prominence than non-FBA businesses in Amazon's model, but that's still no guarantee of survivability or even profitability.

The company's main product is, after all, information, and it leverages data - data it does not share -- with ruthless efficiency to decide where, when and how products will appear to consumers. It will also track the popularity and pricing flow of items, and use this information to produce its own competing products in an effort to supplant third-party businesses as sales leaders for those products.

2. You might need to be more hands-on than you think.

You'll need a working knowledge of Amazon's marketplace and the performance metrics it uses to gauge success and failure.

You'll probably also want to keep a close eye on competition, which can wildly surge (as can the performance and profitability of all the items in the business), to have real-time information on your best performers in the short and long term.

3. You'll need a game plan for growth.

In addition to negotiating the perilous waters of Amazon's Darwinist marketplace, you'll need to keep a sharp eye out for growth opportunities at every turn.

The same expanding competition and market saturation that eat into your profits will work against you inside the closed walls of Amazon's ecosystem, so be prepared to pursue multichannel opportunities if you're keen on serious growth.

To FBA or not to FBA - that is the question.

FBA businesses are an exciting, evolving part of the small business marketplace. And as with any other small business, deciding whether or not an FBA business is right for you begins with answering a few simple questions.

• Does this business match my interests and goals?
• Does this business have the current or potential power to achieve my desired profitability, sustainability and growth?
• Do I have the necessary understanding of Amazon's marketplace, the FBA business model and the potentially punishing algorithms that drive success on Amazon?
• Am I prepared to put any work into this business?

If answered "yes" to all of these questions, you're on your way to FBA success.

But if you're not sure about one or more, it's a good idea to sit down with your broker, and discuss whether buying an FBA business is the right for you. A little due diligence, along with taking the time to develop your subject-matter mastery, can help you make an informed - and profitable -- decision.

(SOURCE)

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