What is Amazon Warehousing and Distribution (AWD)?

For businesses selling on Amazon, efficient inventory management and fast delivery are crucial to success To help sellers improve these processes, amazon introduced Amazon Warehousing and Distribution (AWD), a comprehensive solution for warehousing, inventory management, and distribution. Designed to reduce the logistics challenges faced by high-volume and multi-channel sellers, AWD has quickly become a valuable asset for businesses aiming to reach customers faster and more efficiently. 

‍

In this article, we’ll explore what AWD is, how it works, its benefits, and considerations for businesses interested in leveraging Amazon’s extensive warehousing network.

What is AWD?

Amazon Warehousing and Distribution (AWD) is Amazon’s logistics service that provides storage, warehousing, and distribution for sellers who want a more hands-off approach to inventory management. AWD was created to help Amazon sellers reduce the complexity of managing inventory across multiple channels, enabling sellers to store their products in Amazon’s vast warehouse network and ship directly to customers, whether they’re ordering through Amazon or other platforms. 

‍

AWD integrates with Amazon’s logistics ecosystem, allowing sellers to focus on growth while Amazon handles everything from storage to shipping. This service is especially helpful for sellers looking to scale, as it removes much of the logistical strain and allows Amazon to handle bulk storage and fulfillment. 

How AWD Works

Amazon Warehousing and Distribution is structured to simplify the end-to-end process of warehousing, managing, and distributing inventory. Here’s a closer look at how it works: 

‍

• Inventory Storage: Sellers send their inventory directly to Amazon’s designated AWD warehouses, where the products are stored until needed for distribution. This centralized storage minimizes the need for sellers to manage inventory in multiple locations. 
• Order Fulfillment: When an order is placed, Amazon retrieves the item from its AWD warehouse and ships it directly to the customer. Sellers can also use AWD to fulfill orders for other platforms, giving them a versatile, multi-channel fulfillment solution. 
• Integration with Amazon’s Marketplace: AWD is tightly integrated with Amazon’s platform, so sellers can manage their inventory, track orders, and review logistics data all from a single dashboard. 
• Flexible Distribution: AWD can serve as an extension of Amazon’s Fulfillment by Amazon (FBA) service. Sellers can choose to move inventory seamlessly between AWF and FBA based on demand, seasonality, and cost factors. 

Benefits of Using AWD for Sellers

For many sellers, AWD offers substantial advantages in terms of cost, convenience, and delivery speed. Here are some of the key benefits: 

Cost Savings on Storage and Shipping

One of the biggest perks of AWD is its potential for cost savings. By storing products in Amazon’s warehouse network, sellers can avoid costly warehouse leases and reduce overhead. AWD offers competitive storage fees, making it particularly attractive for high-volume sellers or those with seasonal inventory. Amazon’s shipping rates are also competitive, allowing sellers to save on delivery costs while reaching customers faster. Here are some statistics to look at from Amazon’s website: 

‍

• Storage costs are reduced by 25% when using AWD. 
• Processing costs are 15% lower.  
• Transportation costs are reduced by 15%. 

Simplified Logistics Management 

AWD takes much of the complexity out of logistics management. For sellers juggling multiple sales channels or with limited capacity for managing inventory, AWD’s streamlined system is a game-changer. Amazon handles all aspects of storage, order processing, and shipping, allowing sellers to focus on core business functions instead of the details of warehousing and distribution. 

‍

At All Points, we understand the value of optimized logistics and are here to support businesses in further simplifying their inventory processes, whether through Amazon’s AWD or complementary solutions that enhance overall logistics efficiency. 

Faster Delivery Times for Customers 

Using AWD, sellers can leverage Amazon’s extensive logistics network to ensure fast, reliable delivery for customers. This network allows businesses to meet customer expectations for quick shipping times without having to manage a complex logistics operation on their own. Faster shipping contributes to higher customer satisfaction and can improve a seller’s visibility on Amazon, as products with faster delivery times are often ranked higher. 

‍

Multi-Channel Distribution

Unlike Fulfillment by Amazon (FBA), which primarily supports Amazon orders, AWD offers flexibility for multi-channel sellers. Businesses can fulfill orders from multiple platforms, such as their own website or other marketplaces, using Amazon’s warehousing and distribution network. This flexibility allows sellers to centralize their inventory and streamline shipping across all sales channels, making AWD a valuable option for e-commerce sellers. 

Challenges and Considerations for Using AWD

While AWD offers many benefits, there are some challenges and considerations for sellers to keep in mind. Here are a few factors to consider before committing to Amazon Warehousing and Distribution: 

Potential Fees and Storage Costs 

While AWD can be cost-effective, it’s essential to consider the potential fees associated with storage, especially for slow-moving inventory. Amazon charges for long-term storage and may also impose fees based on seasonality and demand. Businesses should monitor inventory turnover closely to avoid excessive fees. 

Reliance on Amazon’s Network 

With AWD, sellers are entrusting Amazon with their warehousing and distribution, which means that any disruptions within Amazon’s logistics network could impact their operations. While Amazon is known for its reliability, any unforeseen issues could affect order fulfillment, particularly during peak seasons. 

Loss of Branding Control 

AWD provides a practical solution for inventory management, but it may limit a brand’s control over the customer experience. Items fulfilled by Amazon are often packaged with Amazon branding, which can detract from a brand’s unique identity. For sellers who prioritize their brand’s presence, it’s worth considering how AWD might impact customer perception. 

When AWD is Most Beneficial

Amazon Warehousing and Distribution is most suitable for high-volume sellers who need significant storage capacity or have unpredictable demand cycles. It can also be advantageous for businesses with seasonal products, as AWD’s flexible distribution model can accommodate fluctuating inventory needs. However, smaller sellers or those with highly specialized inventory may find other fulfillment solutions more fitting. 

‍

‍

How All Points Supports Your Logistics Beyond Amazon 

While Amazon Warehousing and Distribution offers a streamlined option for Amazon-centric sellers, many businesses benefit from complementary logistics support. At All Points, we provide tailored logistics solutions that can work alongside AWD, helping you manage inventory and streamline operations both within and beyond the Amazon ecosystem.

Our services include warehousing, order fulfillment, and inventory management to ensure that you have end-to-end support no matter where you sell. For businesses that want added control over branding, flexibility in packaging, or expanded distribution options, All Points offers customizable logistics solutions to help you achieve your goals.

‍