Amazon wants to do for physical product shipping what it's done for web storage and computing power - leverage its surplus infrastructure built up by Amazon.com to offer cheap and easy infrastructure for all kinds of other activities.
Last night Amazon announced the newest addition to the Amazon Web Services suite: Amazon Fulfillment Web Service (AFWS).
AFWS offers two APIs (application programming interfaces) - one inbound and one outbound. That means developers can now progromatically send physical goods to an Amazon warehouse (fulfillment center) and then have Amazon do the shipping of those goods out to customers when items are purchased through 3rd party sites.
Amazon has offered other businesses access to its fulfillment infrastructure for some time through the Fulfillment by Amazon service, but today's announcement means that the whole process will be automated. It's a webservices world!
As we discussed in our recent post on APIs and Developer Platforms: The Pros and Cons, an API is like an invitation to start a structured business development relationship on the fly, without lengthy technical or political negotiations. The Fulfillment API is what brings the Amazon Fulfillment Services to life.
Amazon Web Services have enabled a whole new class of web startups to offer storage and processing features far beyond what they could have in-house. At least in terms of bandwidth use, those webservices are now bigger than Amazon.com proper - itself one of the most visited sites on the internet.
We'll see if Amazon Fulfillment can do the same to small shops selling physical goods. The centralization of the infrastructure could be very interesting. Perhaps Walmart will buy Amazon someday for its webservices. I look forward to reading what Nick Carr has to say about this.
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I am surprised it took this long. Its a great service and I think its core audience is the manufacturing world where their normal route to market is wholesale.
cost for storage and handling can be found here
Posted by: Darren | March 20, 2008 9:30 AMhttp://www.amazon.com/gp/seller/fba/fba_pricing.html
Thanks Darren, I should have included that link in the original story. Adding it now.
Posted by: Marshall KirkpatrickMarshall - revolutionary - you've announced something that's existed for decades - it's called logistics. For years manufacturers have been sending bulk to logistics centres where good are then dispatched as needed to the end-customer. Most logistics providers use web technology to do this and provide the same service that Amazon will.
That's not to say that AFWS isn't a good thing - it is - and I'm sure it will do very well on the back of Amazon's success in other areas.
I'm also a proponent of everything 2.0 and moving to the clouds, but calling AFWS something new is similar to making a silk purse out of the proverbial sow's ear....
Posted by: benkepesbenkepes, fair enough - it's clearly the end to end solution and the API that are new.
Posted by: Marshall KirkpatrickAs someone who's spent the last two weeks researching third party fulfillment houses (Amazon's competition), I was thrilled to see Amazon stepping up.
Less thrilled to notice that the biggest thing that's kept us (and likely many others) from using Amazon fulfillment hasn't changed:
Your orders still ship in Amazon.com-branded boxes, with Amazon-included third-party ad inserts.
The pricing is good, and I bet the reliability is great, but as an ecommerce merchant you only have a couple points of contact with your customer, and Amazon branding all over the package customers get takes away a big one.
Posted by: Amit Gupta | March 20, 2008 1:38 PMbenkepes, this service is as much smimiliar to logistics as google to yellowpages. This service means that you don't need almost anything to start retailing on the web. It means you can be fully elastic, without worrying about stock, storage, staff and shipping. To me - this is revolutionary, bedcause it bring on-demand (kind of)logistics to the masses. And it's fully automated (client-side at least). I'm glad I read this post, because Amazon release on techmeme told me nothing :)
Posted by: Marcin Grodzicki | March 20, 2008 1:43 PMI'm also surprised that it's taken this long for Amazon to do this.
Amazon is essentially setting itself up as the perfect environment for small businesses to get started. Large hosting, payment processing, and now fulfillment.
I bet the next thing they'll do is 3rd-party customer service...
Posted by: Jackson | March 20, 2008 5:01 PM@Amit, didn't know they sent your stuff with amazon branded boxes. We were looking forward to giving it a shot but now, that sure is not an option for us. Thank you.
Posted by: Tuni & G | March 20, 2008 5:04 PMknow about this, they also take over 60% of the profits due to storage and shipping.
Posted by: Tanya | March 20, 2008 5:08 PMCheck out Shipwire if you think fba is "amazing".
We even offer a free trial. No credit card needed
We've had API's available since launch. To Marshall's point about API's making partnership easier, absolutely correct. Many shopping carts have integrated Shipwire to ensure orders, inventory and tracking synch between the warehouses and the shopping cart.
We also offer real-time order submission from PayPal, eBay auctions (really cool) and Google checkout.
Warehouses in Los Angeles, Chicago, Toronto, Vancouver and the UK (in beta).
Why all the warehouse. If you have inventory in multiple locations we fulfill orders from the warehouse closest to the buyer. Save on shipping costs and faster delivery.
We just built a cool widget to demonstrate this point. Go to our pricing page and hover over the little orange tab next to "DHL". Input your location and see how much multiple warehouses will save you in time and money.
If you think its interesting, test drive us with the free trial.
Cheers,
Nate with Shipwire
Posted by: nate | March 20, 2008 5:40 PMmarshall - very gracious of you, thanks
Marcin Grodzicki - bollocks. You said "this service means that you don't need almost anything to start retailing on the web" - yes you do, you need an idea and access to a supply chain. you said "It means you can be fully elastic, without worrying about stock, storage, staff and shipping." - fully elastic? but what if your supplier has minimum order quantities, what happens if you need staff to do customer service?
Amazon is great and AWFS is also great - but revolutionary it ain't
Posted by: benkepesJust continuing this conversation.
Shipwire got coverage in entrepreneur this month.
http://www.entrepreneur.com/magazine/entrepreneur/2008/april/191638.html
customer profile
Thought it was relevant
Posted by: order fulfillment | March 22, 2008 12:19 AMShipwire stop spamming everyone, please...i mean honestly whose going to use a service that spams blog forums :)
Posted by: stop spamming | March 24, 2008 11:54 AM