Comment by cm2012 | Hacker News Reader

Comment by cm2012 | Hacker News Reader

I enjoyed this article and found it illuminating. I work with a number of manufacturers (in jewelry, apparel, furniture, watches, etc.) who sell using Amazon Warehouses (the FBA program). Already, before the new warehouses, it smokes competitor warehouses that I've tried in terms of time and reliability. 52% of Amazon non-media sales come from 3rd party sellers like the companies I work for, last I checked.

Some trends I think will come soon from Amazon FBA:

1) When Amazon perfects daily grocery delivery it will change the whole ballgame for UPS and USPS. Amazon will cut them out of the picture. I think the cost of shipping furniture especially will plummet.

2) Amazon launched FBA Export a while back to let merchants fulfilling through FBA U.S. ship anywhere in the world easily. Right now only a few SKUs are eligible, but they are working to expand this program ASAP. In a year or two, a ton of products on Amazon U.S. will be available anywhere.

3) A lot of mainstream people don't know but Amazon warehouses don't just ship to Amazon customers. Merchants can enable multichannel shipping for a price ($6 compared to $2.50 for Amazon orders), so a lot of eBay sellers, Rakuten sellers use FBA to fulfill.

Also releveant

1.A network of automated lockers is being built around the world: amazon, google, few british companies , german mail, and a polish company offering global lockers, which recently got $200 million investment. Highly useful for amazon.

2.Amazon is "secretly" building robots, and ordered a place at an important logistics trade show in 2015. They might launch a global 3rd party logistics , based on robotics then.

3.Amazon offers a financing services for some sellers. By having access to their business internals, it can offer low rate loans efficiently. Could be a killer feature for sellers.

1)Yep, they have a key partnership with 7/11 among others.

2) They bought Kiva robotics a while back

3) I've seen those lending offers for some time now, they are pushing them to sellers based on business internals as you've mentioned.

Looking forward to the robot postmen

As I followed Amazon's buildout over the years, I couldn't help but wonder why FedEx is either overlooked in (or overlooking) this market.

I worked in one of these facilites many years ago, asked, and got mostly shrugs.

Their 'Global Distribution Centers' offer 24/7, 365 fulfillment, and exclusive 'last minute' access to shipping hubs.

FedEd is not the kind of establishment that likes to shake things up.

I was also curious about this, I assumed the competition between UPS and Fedex was fierce enough to keep them both fairly innovative, but it sounds like Amazon is finding room for improvement...

FedEx is about business documents mostly, as far as I know.

Not to mention, they're a middle man. Amazon gains a lot by cutting out the middle man.

I expect that it has to do with the fact that building a shipping infrastructure takes a lot of time to ramp up. Amazon has a sweetheart deal with FedEx and if FedEx thinks that Amazon is going to try to replace them, FedEx can make it very expensive for Amazon during the transition.

This is why Amazon Grocery is so important - it lets Amazon build out a shipping infrastructure in a way that seems uncompetitive to UPS/FedEx

FedEx does not have the technical culture to compete with Amazon. Flat out. Most people in Memphis know someone who works there or worked there and it's a hot mess on the inside. They succeed, and have for many years, but I tend to think of them as one of the whales that gelled technical "Ahab" teams that understand the value of the hacker culture will take down one by one over the next 20-40 years.

Technical debt, poisonous power structures, aging entrenched workforces, layoffs, and shifting economic conditions will force places like FedEx to innovate and I've got my money on them not being able to compete in the next economy. It's a case study I've thought a lot about and I really can't wait to find out if I'm wrong.

I'm not so sure about the online grocery thing. Won't people want to touch their food before buying it?

I say that somewhat ironically, because of course that's exactly what everyone said about online shopping from the beginning. So it's a safe bet, I think, that online grocery will grow and ultimately own a substantial chunk of the market.

I would love to read more about start-ups in this space. Every interface for ordering groceries, including Amazon's, is just frustratingly bad. It's even harder to get ordering right for groceries than it is for take-out!

"Build a better way to buy groceries online" sounds like a great idea. As long as you're cool with Walmart Labs acquiring you in a couple weeks/months/years.

It's an interesting point.

We've actually stopped buying fresh produce from online groceries because the quality / freshness has been consistently poor or in some cases (meat) even declined.

We've only had the opportunity to try Coles Online (Australia) because they're the only provider that delivers to my suburb. I'm sure others have better experiences, but it's interesting that the initial concerns played out.

We use online groceries for dry foods, nappies etc.

Webvan in Dotcom 1.0 consistently did better quality produce than Safeway. I didn't understand Whole Foods/etc. back then, but I'm pretty sure the quality was essentially what I get at Berkeley Bowl or Whole Foods today.

I don't think "good quality produce without touching it" is impossible to solve.

How does Amazon perfecting daily grocery delivery relate to shipping furniture costs plummeting?

The delivery infrastructure they build for grocery delivery can be used to deliver other things later.

Fresh already delivers a lot more than just groceries. Plenty of common durable goods like dvds and video games, for example.

If they're already sending large trucks from their warehouses to every block in an area everyday, it's relatively cheap to include other large delivery items when ordered.

How does #3 work? The merchants store their inventory in Amazon warehouses? Or do they use Amazon software to track their inventory?

Re: #2, so Amazon is playing the role of FedEx/UPS?

Yes, Fulfilled by Amazon is all about storing 3rd party inventory in the Amazon warehouses. At my current company, all of our e-commerce enabled goods are in Amazon warehouses (about 20,000 units all told at the moment).

Amazon still uses USPS/UPS/Fedex to ship goods, and they pass their discounts to merchants who use FBA.

They have a service called "Fulfillment by Amazon" (FBA). You don't even have to be a huge merchant to use it, I have tried using it just to learn how it works to ship one item which was worth about $10. It's totally automated, no need to talk to a person.

On their website you can add new items that appear on Amazon if they don't already have a listing for it.

When you want to send the items to their warehouse, there are two pieces of info they need. One is a way to identify the shipment when they receive it, another is to be able to identify each individual item in the shipment.

For the shipment part, you list the items you are going to send them using their web interface and then get a document to print for sending along with the shipment, which has a barcode they scan to know what the shipment is when it arrives.

For the items, if they don't already have suitable barcodes that help them know which listing each item is related to, you can create barcode stickers and attach them to the items, also through that web interface.

After they get the shipment, they appear in your inventory on the site. If people buy the items through Amazon, they will ship it for you. They also have an API for dispatching an item to an address you desire. There are some options for removing Amazon box branding too, if you want to just use them to handle shipping for you.

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