Why Does Amazon Invest More And More Money In Building Warehouse Facilities?

From mid November, the United States will also usher in the most vigorous shopping season in the year, which is for American consumers to prepare for Thanksgiving and December Christmas for the 11 month.

However, it is not yet known to the 11 month of the month that there are people familiar with the matter.

The third party sellers are being restricted to ship to Amazon's warehouse, so as to control warehouse load and avoid full warehouse or logistics block.

Prior to that, Amazon provided the third party sellers with warehousing and distribution services, and earned service fees from them.

The news was first disclosed a few days ago, "this practice indicates that Amazon is worried about its own warehousing capacity, and there have been problems in the past", the article wrote.

Amazon declined to respond.

According to this report, the ban is imposed on all new sellers of third party on Amazon, and the ban will not be lifted until December 19th.

This is not the first time Amazon has made such a decision in the shopping season.

However, in the past few years, only a small number of third party sellers, such as toys, will be restricted.

This year, the target is all categories, and "no advance notice" is reported.

Earlier this year, Amazon had already made provisions on the use of warehousing by third party sellers, including fines for sellers with low turnover and incentives for sellers with high turnover.

The reason for Amazon's doing this is also very clear: the faster the turnover of goods from third party sellers, the more efficient and frequent their cooperation with Amazon, and the higher the number of orders (or storage services revenue) that Amazon obtains from it.

According to Amazon's annual report released in April this year, nearly 50% of the products sold on the platform come from third party sellers.

Amazon did not disclose revenue or changes in its warehousing and logistics services provided to third party sellers, but according to Peng Bo's news, this part of revenue is lower than Amazon's revenue sharing from third party sellers.

The obvious trend is that Amazon is investing more and more money in building warehousing facilities.

According to the results of the financial report, from 2013 fiscal year to 2015 fiscal year, Amazon's warehousing

The related operating costs rose from $85 billion to US $13 billion 400 million (which also includes customer service and payment platform costs). Over the past three years, the annual growth rate was over 25%, and the proportion of current sales increased from 11.5% to 12.5%.

According to Bloomberg quoted Amazon, the latter has added 21 warehouses in the first nine months of this year, 2 times the same period last year.

In view of Amazon's third party sellers' warehousing restrictions, some investors think it exposes the limitations of Amazon in providing warehousing and logistics services.

But in another way of thinking, limiting the entry of more goods into warehouses also means that Amazon's current warehousing resources tend to run full warehouse and do not have idle resources.