Yuan Gao
Blog Submission #3
Amazon’s Inventory
Strategy
Amazon is leading e-commerce in the market with its ability
to sell products in Amazon’s inventory and provide platform for other sellers
to list and sell their products. Amazon .com called itself "Earths
Biggest Bookstore” because it has been ranked as the best consumer e-business.
As its competitors estimate that Amazon.com has the highest percentage of the
e-business bookstore. Therefore, Amazon tries to share its information and
outsources this area of its business to improve inventory cost and customer
service levels. From the inventory management point of view, Amazon can
outsource its inventory to reduce its inventory costs and to sell competitor’s
products on its site to achieve both managing its customer relationship and
sustaining its competitive advantage.
There are couple innovative inventory
strategies. First, unlike Wal-Mart stocking the stores with all products fit in
the neighborhood
market, it is impossible to stock all possible books in the market. Amazon is
concentrating more on the quality of the products and the manufacturer or the
publisher of the products. It decreased its inventory and developed a
distribution infrastructure to provide its customers with the fast delivery
from the company directly.
Second, Amazon outsourcing some of it
inventories to third parties. It cut cost on operational cost and focused on it
core activities. It can contribute more labor and information technologies on
its distribution and consumer satisfactory; and of course those two factors are
Amazon’s key to success. From the video, one can see how amazon received
other’s product, and store in a secure inventory and fast delivery to
consumers.
Video: Fulfill by Amazon
Last but not the least, Amazon sell
other’s products. Consumer’s can compare the price when running to bookstores
like Borders - take out their smart phones and search on amazon.com. This
action of comparing price on Amazon.com is becoming a habit for most of people. In fact, this can make huge profit
because it cut off advertising cost. In addition, because of Amazon’s good
inventory and fast delivery strategy, consumers knew only need to wait two days
to get their stuff.
Amazon has
this innovative inventory management strategy, however, it seems it only being
used in e-commerce field. In healthcare systems, Patients are waiting for weeks
to get their appropriate treatment done most of the time. Majority of those
waiting time is for ordering appropriate medical supplies. Does fulfilled by Amazon’s
inventory strategy can be used in healthcare suppliers? How?
Source:
1.
http://download.portalgaruda.org/article.php?article=58352&val=4378
Thank you for such a fantastic blog. Managing yourinventory management marketing materials is extremely important to the success of a business. I have seen numerous businesses go out of business because they just never had a handle on their inventory. Great to see there are tips out there, hopefully they will help people manage their business/inventory better. I myself use a network inventory software and my business has been running smoother than ever!
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