Amazon is reportedly expanding a trial of warehouse management software to more of the company's marketplace merchant partners, which would help them ship products from their own locations rather than from Amazon warehouses, according to a Bloomberg report.
As used by merchant partners, the software, called FBA Onsite, could help keep Amazon's own warehouses from becoming too crowded with product inventory from its third-party marketplace partners, while also reducing shipping costs for the merchants, helping to speed up delivery to customers and potentially increase the selection of products that qualify for Amazon's Prime shipping program.
Amazon did not comment for the Bloomberg story, and did not respond directly to questions about the program when contacted by Retail Dive, but offered background information on FBA Onsite, describing it as a warehouse management system with software that helps merchants manage their logistics processes.
By appearances, FBA Onsite expands the long-standing Fulfillment By Amazon program and extends the reach of Amazon's own logistics technology to the domain of merchant partners.
That seems like it could encroach on the turf of companies like UPS and FedEx — something that was pointed out last fall when the program first appeared under the name "Seller Flex," as Amazon started a trial on the West Coast.
While Amazon is providing these merchant partners with a logistics management tool, Amazon's FBA Onsite program backgrounder indicated that packages will still be carried to their destinations by existing carriers that support Amazon, so the e-commerce giant is not necessarily stepping in on the whole logistics chain.
To be clear, it's not at all clear how far Amazon intends to go with this program, or how much it might ultimately affect other logistics and shipping companies that Amazon works with. Amazon certainly has flirted with the notion of taking over more of the logistics, shipping and last-mile delivery chain by building up its own air, trucking and delivery fleets and innovating around the concept of last-mile delivery drones.
But, it will be a while before some of that, particularly the delivery drones, comes to fruition. For now, this looks more like a play to make sure the company and its merchant partners can continue delivering on the pledges made to Prime members for fast delivery, and in the process, potentially allow more products to qualify for Prime shipping. FBA Onsite software will help ensure that merchants can match Amazon's standards for the program, which in turn will help Amazon better manage its own warehouse space.