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Posted: 2020-12-15 19:36:17

The Broken Amazon Fulfillment Elasticity

From Marketplace Pulse at Marketplace Pulse
Originally published 2020-12-09
FBA changed from a virtually infinite fulfillment network that allowed anyone to send in as much inventory as they wanted to one where it is up to an algorithm to decide how many units a seller is permitted. And even then, it might take weeks to get those units received and ready for sale. It became a service that enforces a ceiling on the seller’s sales, rather than allowing the seller the risk of overstocking in exchange for a storage fee.
Amazon is betting that it has enough sellers that no individual seller running out of stock will materially affect its sales. However, it has been months since FBA operated normally, and many more sellers have made strategic decisions to use 3PLs for more of their sales or invest in building a warehouse than in the years prior. FBA will restore to being the infinite fulfillment network sometime next year, but this year was a wake-up call for the industry - for the first time since FBA launched in 2006, to maximize sales on Amazon, sellers had to use FBA and a backup warehouse.
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