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Amazon Upstream Storage for FBA Solves for Supply Chain Issues

Amazon
Amazon Upstream Storage Solves for Supply Chain Issues

Amazon upstream storage is a new program the company is testing with FBA sellers to streamline inventory replenishment in its Fulfillment Centers.

A page on its website refers to the program as Amazon Distribution, and in messaging to sellers, refers to it as STAR. “Our system will automatically replenish inventory from upstream storage into Prime-ready fulfillment centers.” Benefits are described as low-cost bulk storage with automatic FBA replenishment and simple, pay-as-you-go pricing.

For now the program appears targeted at sellers bringing inventory from China and Hong Kong using ocean transport through Amazon Global Logistics.

We became aware of the Amazon upstream storage program through a post by Ed Rosenberg, founder of the Amazon Sellers Group (ASGTG.com), which led us to the description of the program on Amazon Seller Central.

A news article from last month reported on a 517,000-square-foot warehouse in Minnesota rumored to be an “inbound receiving center.” Business Journal said observers told it that “Amazon has lately been focused on building inbound receiving centers, which sit upstream of fulfillment centers and serve as a buffer between Amazon’s suppliers and the bigger, expensive fulfillment centers, taking and storing shipments of goods until they’re needed.”

Making more storage available upstream may help with supply chain issues and could make fulfillment centers more efficient. Amazon states, “If your product has enough inventory in upstream storage, customers can still search for and buy the product even if it goes out of stock in Prime-ready fulfillment centers.”

In a screenshot of information sellers reported receiving, Amazon said storage costs were an average of 47% – 63% lower than in its fulfillment centers.

The program uses a data science model that triggers replenishment to Prime-ready fulfillment centers so merchants’ products stay in stock. One significant downside: merchants can’t move inventory to non-Amazon destinations. “Currently, Amazon upstream storage can only be replenished to Prime-ready fulfillment centers.”

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

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