Nothing draws the ire of some US sellers more than the fact that it’s cheaper for Chinese companies to ship certain products to the US than they can thanks to USPS ePacket rates. But what may be far more worrying is a top secret plan by Amazon to combine its logistics and fulfillment capabilities to bring products directly from factories in Asia to customers in America and Europe.
Bloomberg News says it reviewed Amazon documents that outline the plan, dubbed Project Dragon Boat. “A 2013 report to Amazon’s senior management team proposed an aggressive global expansion of the company’s Fulfillment By Amazon service…,” the news site wrote.
“The report envisioned a global delivery network that controls the flow of goods from factories in China and India to customer doorsteps in Atlanta, New York and London.” Rather than using a third-party shipping carrier, sellers will use Amazon logistics. “The ease and transparency of this disintermediation will be revolutionary and sellers will flock to FBA given the competitive pricing.”
Bloomberg said Amazon has plans to launch of a new venture called Global Supply Chain by Amazon. “Amazon will partner with third-party carriers to build the global enterprise and then gradually squeeze them out once the business reaches sufficient volume and Amazon learns enough to run it on its own, the documents said.”
And it said, the project is proceeding, citing “a person familiar with the initiative.”
Not only would FBA sellers have to worry about competitive issues including a downward pressure on pricing, they might also be forced to fight over storage space in Amazon’s FBA warehouses which, according to the company, were full during the 2015 holiday shopping season.
You can read the full story on Bloomberg.com.