What does this mean for customers?

After the entire e-commerce industry, especially Amazon, was busy revising its logistics and inventory systems during the corona crisis, according to retail experts, Amazon in the USA has now started to prioritize items higher in the search result list if they are in a nearby warehouse and can be delivered particularly promptly.

This is what Amazon’s Vice President Udit Madan, who is responsible for the logistics division, explains to the Wall Street Journal, just one of many measures the e-commerce giant has taken in recent years to speed up and simplify the delivery process. Because the data from Amazon would suggest that customers are more likely to come back the faster the delivery takes place. This is a finding that is not new in German e‑commerce either: availability has become an element that is just as important as the price and often decides where the customer shops.

Amazon can leverage these logistical synergies better than any other online retailer – because the platform has an extensive network of delivery centers and large storage areas both in the USA and here. Trade experts point out that here too (and even more so in the USA with the larger area) the choice of the appropriate storage location can be a decisive lever for cost reduction.

This is probably also the reason why Amazon in Europe likes to have goods in as many locations as possible and encourages retailers to do the same as part of the Marketplace or Fulfillment by Amazon. In the USA there is a division into eight regions, in Europe the usual country division anyway. It’s likely that this will benefit larger sellers with more throughput, who have the ability to provide more inventory across delivery centers.

At the same time, all of this is not only a cost issue, but also a step towards more sustainability and environmental protection. After all, it is not just since yesterday that online trade has been burdened with the stigma of driving a lot of goods (sometimes unnecessarily) through the republic. In the interest of efficiency, Amazon explains to Magan that three out of four orders come from a warehouse in the same region to which they are then supposed to be delivered. A comparison of the eight regions and the conditions in Germany is simply not possible.

In this respect, it remains to be seen whether Amazon wants to change something in terms of efficiency here in Germany. As is well known, the company only speaks to the press once a final decision has been made. However, it is indeed desirable that all major players in e-commerce deliver as efficiently as possible and provide the goods promptly without additional express surcharges. For retailers who sell via the Marketplace, however, this does in fact mean more stock goods in circulation.