Sun Sentinel Palm Beach Edition
Amazon says logistics service purchases have doubled
Amazon.com said the number of items sold for independent merchants who use its logistics service more than doubled to 2 billion last year, evidence the online retailer’s stepped-up investments in warehouses are paying off with expansion into new areas like fashion and household goods.
The world’s biggest e-commerce company has differentiated itself by offering fast, free delivery of items from its vast network of shipping hubs where inventory is stored close to customers.
Fulfillment by Amazon, its logistics service, lets merchants send goods to Amazon warehouses and pay a fee for packing and shipping online orders to customers.
The number of merchants using the service increased 70 percent in 2016, Amazon said in a statement. Getting access to Amazon Prime members, the company’s most loyal shoppers who pay $99 a year for free delivery as well as video and music streaming, is a big reason vendors want to store and sell their goods using Amazon’s website and facilities.
The growth shows that the combination of abundant inventory with quick delivery that Amazon used to win market share in books and electronics is working in new categories such as clothing and kitchen items, said John Blackledge, an analyst at Cowen and Co.
“The infrastructure they’ve built and keep adding to is a big advantage over other companies,” Blackledge said. “No one else can do what they are doing, offer so much and get it to you so quickly.”
Amazon Chief Executive Jeff Bezos, in a letter to shareholders, highlighted Fulfillment by Amazon as a key growth driver that propelled his Seattle-based company in 2015 to more than $100 billion in sales for the first time.