Why This Matters to Distributors :Amazon is expanding from a sales channel into a full logistics provider, while also lowering the cost of sourcing and replenishment from China, increasing pressure on distributors’ pricing, inventory, and delivery advantages.
Amazon.com Inc. on May 4 launched Amazon Supply Chain Services, opening its freight, fulfillment, and parcel delivery network to businesses of all sizes in a direct challenge to UPS Inc. and FedEx Corp., while also expanding a China-based fulfillment model that connects overseas inventory directly to its U.S. network.
The new service allows companies to move goods from raw materials to finished products using Amazon’s logistics infrastructure. That includes ocean, air, ground, and rail freight supported by more than 80,000 trailers, 24,000 intermodal containers and more than 100 aircraft.
At the same time, Amazon introduced a cross-border service called Global Warehousing and Distribution, which gives sellers a direct pipeline from a Shenzhen warehouse into its U.S. fulfillment network. Amazon said storage costs in China can be up to 45% lower than domestic warehousing and distribution rates.
Under that program, sellers ship bulk inventory to Amazon’s facility in Shenzhen. Amazon then manages customs clearance, international freight, and delivery into U.S. fulfillment centers through its Amazon Global Logistics network. The company said replenishment to U.S. facilities can be completed up to seven days faster than current alternatives.
Sellers can use automated replenishment tools powered by artificial intelligence or manage inventory manually while Amazon handles logistics execution.
Together, the two launches extend Amazon’s logistics capabilities beyond its marketplace and closer to the point of manufacturing. The company is combining origin warehousing, international freight, customs, and domestic fulfillment into a single service.
Early users of Amazon’s broader supply chain services include Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters. Companies are using various parts of the network for freight movement, inventory positioning, and parcel delivery.
“Amazon is bringing the infrastructure, intelligence and scale of its supply chain services, proven over decades, to businesses everywhere,” said Peter Larsen, vice president of Amazon Supply Chain Services.
Amazon built its logistics network to support its own retail operations and marketplace sellers. It now handles billions of items annually and has expanded fulfillment services over more than two decades. Opening that network to external customers creates a new business line that does not depend solely on ecommerce transactions.
For wholesale distributors, the move changes Amazon’s role in the supply chain. The company is now operating as a third-party logistics provider while also extending its network upstream into manufacturing hubs.
The Shenzhen-based model has direct implications for distributors that import goods from China and hold inventory in the United States. Sellers can now store products closer to factories at lower cost and replenish U.S. demand through Amazon’s network on a faster cycle.
That reduces a traditional advantage for distributors, which has been domestic inventory positioning and rapid delivery. By combining lower-cost origin storage with integrated freight and fulfillment, Amazon is lowering the barriers for sellers to bypass the distribution channel.
The expansion also introduces new competition in parcel shipping. Distributors that rely on UPS or FedEx for outbound delivery now have another option, which could affect pricing and contract negotiations.
Industries such as automotive, industrial supplies, healthcare and manufacturing may see the most immediate impact, particularly in product categories heavily sourced from China.
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