Amazon launches bulk storage service in Europe

Amazon Warehousing & Distribution, or AWD, will launch in five European countries this week. The service allows Amazon sellers to store products with the ecommerce giant for extended periods. From this bulk inventory, Amazon replenishes stock at FBA fulfillment centers based on demand.

From 20 August, AWD will be available in Germany, France, Italy, Spain and the United Kingdom. These are Europe’s five largest ecommerce markets, with Amazon leading the market in each of them.

Amazon distribution centers

For now, Amazon appears to be planning to use its existing distribution infrastructure for AWD. The company told selling partners: “AWD helps you address supply chain challenges by providing flat-rate, long-term bulk storage in Amazon distribution centres with automated replenishment to Fulfilment by Amazon (FBA) fulfillment centres across Europe.” In addition to the storage fee, Amazon charges sellers for processing and transportation to FBA centers.

Storage without FBA restrictions

According to Amazon, AWD gives sellers the flexibility to store more inventory with the company without FBA capacity constraints. Its auto-replenishment capability eliminates manual restocking and reduces the risk of stock-outs, the company says. This can be particularly useful during peak periods such as Prime Day and Black Friday.

More control

AWD introduces an additional link between sellers’ inventory and the FBA network, for which Amazon adjusted its fee structure last year. In doing so, Amazon is increasing its control over the logistics chain for sellers on its platform. There are over one hundred thousand of these sellers in Europe: Amazon generates the majority of sales in its European stores through third-party sellers, particularly small and medium-sized businesses.

While AWD can make their operations easier, it also increases their dependence on Amazon, which positions itself as an ally to European SMEs and a catalyst for their growth.

External sales channels

Amazon launched AWD in the United States four years ago. There, selling partners can now also use the service to supply other sales channels. This option is not part of the European launch for now. It is not known whether AWD will also be rolled out in European markets beyond the five largest ones.

AWD extends beyond Amazon sales channels in the US