For Amazon, building logistics is a work in progress — with incentives in the mix to keep its driver base growing during the all-important holiday shopping season.
We are referring, of course, to the announcement of two new value-added services to add benefits to Delivery Service Partners (DSPs), including a salary increase and new benefit programs. These programs include a 401(k) program that helps small business owners match employee contributions.
Raising the pay of these drivers is a way to ensure that Amazon has enough “wheels on the street” ahead of the all-important holiday shopping season, which we all know no longer conforms exactly to the period. from Thanksgiving to Christmas.
Goods making their way to warehouses and distribution centers, after all, have to get into the hands of consumers – and the competition for drivers will only intensify.
Amazon shares come as e-commerce growth slows.
Now: Growth is still growth, but the Amazons, Walmarts, and Targets of the World — the giants that increasingly straddle online and offline commerce — the key competitiveness comes down to speed.
And speed comes down to being closer to the last mile to the end customer’s home. Reports last week on Amazon’s logistics plans indicated that the company would continue to move forward to open more fulfillment centers, where goods are in turn routed to last-mile facilities.
And separately, at the end of last month, Amazon announced that, through Amazon Warehousing & Distribution, it would allow sellers to use “new purpose-built facilities” for bulk inventory storage and automated distribution. There will be more details this week as Amazon holds its annual seller conference, but in terms of mechanics, the company said that “with one click, sellers can send their inventory to Amazon fulfillment centers and reduce storage costs considerably”.
Given the roughly 370 million square feet of space owned by Amazon, the footprint is there – the flexibility in how it can use that footprint is exemplified in the new seller initiative. This is a B2B offering which, in turn, can help ensure sellers stay on the platform.
The retail giant has closed or delayed the opening of as many as 66 facilities, including delivery stations and distribution centers.
Also read: Report: Amazon shuts down and delays some facilities as e-commerce growth slows
This is partly due to the consolidation of some operations, and the company said it is also improving some facilities and will look to open new locations. At this point, the net effect has yet to be disclosed, but the initiatives show that Amazon will look to do more with the space available, to be sensible with the space it adds – and the last mile can guide these efforts accordingly.
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