08-24-2012, 08:08 AM
Vanraw Wrote:It would be an interesting question for Vllad. I assume that Amazon has some very sweet deals when it comes to shipping from its distribution centers. If I recall, there is cost reduction for a company that does more of the up front work, such as sorting bar codes etc.
Actually we do that work up front for them which seperates them from the Wal-Marts of the world. They get decent rates but not anywhere close to Wal-Mart, Staples, etc.
Amazon saves money by not paying for long term staff in their supply chain. Surprsingly other big retailers could learn alot from them. However Amazon also doesn't have to feed a chain of stores so the DC abilities aren't the same.
That reliance on DC's means they spend less on transportation therefore by default their leverage is less.