Jan 11, 2023 - Economy

Amazon leans into logistics as a service

An Amazon package sitting atop a white classical pedestal

Illustration: Rebecca Zisser / Axios

Amazon is turning into a logistics as a service provider, allowing merchants to use its Prime logistics without actually needing to sell on Amazon.

Why it matters: Its future growth, especially in terms of profits, could ride on its ability to manage inventory, warehouse, deliver and even process returns for other businesses.

Details: Amazon will open up its Buy with Prime program — running on an invite-only basis since April last year — to all eligible U.S.-based merchants at the end of the month, the company announced Tuesday.

  • Sellers who sign up pay Amazon to store and deliver their products, as well as process customer payments.
  • Amazon Prime members get the benefit of free shipping and next-day delivery from more places that want to keep selling — or only sell — through their own websites. (Direct-to-consumer brands, for example.)

What they're saying: Sharon Gee, VP of revenue growth at Buy With Prime partner BigCommerce, called the move, announced during Amazon’s sellers conference last year, "essentially ... a change in their philosophy."

  • "For the first time ever, Amazon was going to modularize their fulfillment capability,” she tells Axios.

The big picture: In many ways, Amazon’s LaaS play is taking off similarly to its profit engine, Amazon Web Services.

  • “Amazon’s smartly figuring out what alternative revenue sources are available to them, leveraging the assets that they have really perfected,” Anne Mezzenga, co-CEO of Omni Talk, a news platform, tells Axios.

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