Amazon Pilots Storage And Replenishment Service

As it prepares for the holiday shopping season, Amazon is making some adjustments to its delivery network to make sure shoppers receive their orders on time. The eCommerce retailer is piloting a new inventory storage service to help meet its next-day shipping pledge and holiday demand without running out of items or overcrowding its warehouses, Bloomberg reported.

The new Amazon Storage and Replenishment service allows merchants to store inventory near the delivery operation of Amazon so items can be replenished quickly. The company is testing out the program in Ontario, California, roughly 20 miles from its nearest operations, and reportedly has plans to bring the program to other places.

The service is Amazon’s newest effort to go further up the supply chain to control the flow of goods to the homes of shoppers from factories, the report said. “Amazon is trying to figure out how to provide a logistics service merchants will pay for and not end up with warehouses full of items no one is buying,” Marketplace Pulse Founder Juozas Kaziukenas said, according to the news outlet. “Many sellers are inexperienced in handling this and lose serious money on fees.”

Amazon shares warehouse space with sellers on its marketplace, and it has reportedly already increased its storage charges during the peak season to dissuade sellers from putting too many items into facilities. That situation, however, means sellers could become too cautious, and the eCommerce retailer could miss out on sales when items go out of stock.

In separate recent news, Amazon has reportedly announced it is going to hire 200,000 temp workers for the holiday. Those workers will take care of tasks such as working the warehouses, packaging and making deliveries. The number of workers is said to be two times the amount the retailer hired last year. The company needs the workers to help with its massive logistics apparatus, which includes the transport of goods from its warehouses to people’s homes.