Amazon Warehousing & Distribution, or AWD for short, is an all-inclusive third-party logistics (3PL) solution. AWD can both store and ship your products within the Amazon fulfillment network even if they’re not sold through Amazon. So how does Amazon AWD work, how much does it cost, and how do you enroll? Below, we explain everything you need to know about this Amazon service. First shared at the Accelerate conference in September 2022, Amazon AWD is the marketplace's newest and most ambitious attempt at consolidating the supply chain for eCommerce retailers. AWD offers a slew of logistic features, not the least of which is pay-as-you-go storage for bulk upstream inventories. Additional benefits include access to the Amazon Fulfillment Network (AFN), consolidation of inventory across all sales channels, and an auto-replenishment feature that automatically reorders and restocks your inventory to avoid stockouts.What is Amazon AWD?
AWD can distribute your goods to any of your necessary channels: wholesalers, manufacturers, brick-and-mortar stores, and directly to customers.
How Does Amazon AWD Work?
The goal of the Amazon AWD service is to streamline the supply chain and distribution network for online retailers. In keeping with that theme, AWD has simplified the entire inventory management process.
If you're shipping less-than-truckload (LTL) or full-truckload (TL) inventory to Amazon distribution centers within the contiguous United States, you can utilize Amazon's Partnered Carrier program. The program can be also used for Amazon Global Logistics. You can send shipments from anywhere in the world to AWD sites to fulfill orders.
Related reading: Supply Chain by Amazon: Simplifying Global Logistics
Participating sellers send their inventory, in bulk, to one of Amazon’s distribution centers. Sellers can then manage their inventory storage operations with the Amazon Fulfillment Network. Unlike Fulfillment By Amazon (FBA), there are no capacity limits for AWD.
Related Reading: Breaking Down Amazon's New FBA Capacity Limits
Your stock is automatically repositioned and relocated to whichever storage facilities are the most effective. This optimizes both the delivery times and fees, at no extra charge.
From there, you can manage all your orders from a single pool, whether they’re on Amazon or not. Amazon orders are managed with FBA, while off-Amazon orders are handled with Amazon Multi-Channel Fulfillment (MCF).
The cherry on top, however, is the auto-replenishment feature. Whenever your stock levels drop below a certain point, AWD will automatically reorder more. Furthermore, stock deliveries are made directly to Amazon facilities, so sellers no longer have to act as intermediaries.
How Much Does AWD Cost?
One of AWD’s main advantages is the transparent costs involved. It's quick to note the simple, pay-as-you-go pricing with “no hidden fees or long-term contracts.”
Storage fees depend on the time of year. From January to September, the cost is $0.42 per cubic foot per month. During the holiday season from October to December, that cost is raised to $0.80 per cubic foot per month. However, AWD is not charging the peak season surcharge for October-December 2023, so the current price remains $0.42 per cubic foot per month.
Processing fees are $2.00 per case, while transportation fees are $1.00 per cubic foot. Storage fees are charged monthly.
How to Enroll in Amazon AWD
Interested in taking advantage of Amazon AWD yourself? Here’s how to enroll.
First, go to the AWD program page. Alternatively, you can access the enrollment page through Seller Central at Growth > Explore Programs > Warehousing and Distribution. The page provides further details about the AWD program if you have any questions. If you’re ready to go you can start by simply clicking the “Enroll” button in the upper-right corner.
Keep in mind that you’ll need to authorize the access of secondary users for inbound shipments. You can do this in the user permissions section of your Seller Central settings.
Amazon AWD Eligibility
Product eligibility for AWD falls in line with the other Amazon services (i.e., no firearms or offensive materials), but here are a few details you can double-check to make sure you’re eligible.
At this time, AWD does not accept:
- Non-sortable products
- Perishables
- Shoes and footwear
- Jewelry
- Case packs that contain one unique SKU each
- Products that are heavy, bulky, or of an excessive size
- Hazmat products or products that require a temperature-controlled environment
If you sell these types of items, AWD isn't a good fit for you. Additionally, AWD doesn't currently support small parcel deliveries.
Will You Give AWD a Try?
AWD has a lot of advantages that FBA lacks, making it a better choice for certain sellers. But how do you know if it’s right for you?
Consider Amazon AWD if you have any of these problems in particular:
- Shipment delays and excessive delivery times
- Frequent stock outages and unreliable forecasting
- Storage capacity limits at your current inventory facilities
- A complicated web of supply chain partners that are difficult to consolidate
- Varying storage costs that make it difficult to predict fees
AWD is specifically designed to deal with these problems. (If you sell exclusively via FBA, software like RestockPro can also be a low-cost, highly effective solution!)
However, if you don’t currently have any of these issues, carefully calculate and compare the costs of switching over before you enroll.
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