By Simpactful Senior Partners Neal Dellett, Lindsay McShane and Heather Burgess

On September 18th, Amazon launched “Supply Chain by Amazon,” offering all sellers access to advanced logistics, warehousing, distribution, fulfillment, and transportation networks. This move aims to enhance product delivery speed and efficiency. The playbook is familiar and intended to replicate the success of the company in monetizing existing service and infrastructure, including Amazon Web Services and Amazon Advertising. This time, they will leverage their massive supply chain infrastructure.

Similarly, Walmart is expanding its “Walmart Fulfillment Services” (WFS) to help third-party marketplace sellers. New capabilities include Multichannel Logistics which allow sellers to fulfill orders from any eCommerce site with 15% lower shipping costs, as well as Cross Border Fulfillment to assist with importing goods from Asia. Sellers can also use Walmart’s carrier network for full truckload shipments at pre-negotiated rates.

Why is Walmart Expanding These Services? Walmart has been following Amazon’s lead for several years, adopting successful programs using in-house or outsourced solutions. When Amazon launched its Multichannel Fulfillment beta program, some businesses hesitated due to concerns over sharing data with Amazon. However, many mid-sized brands benefited from Amazon’s program, gaining cost advantages and increased sales.

In today’s uncertain economy, brands need flexible and scalable operations. Amazon and Walmart’s growing supply chain capabilities provide opportunities for businesses to improve efficiency and reduce costs. This will change the competitive landscape and have a ripple effect on brands of all sizes.

Benefits of These Programs: Simpactful Senior Partner, Lindsay McShane shares, “It’s proven useful to watch Amazon and assume Walmart will utilize the same playbook. The Supply Chain by Amazon menu offers sellers end-to-end fully automated services that leverage Amazon’s scaled systems, warehousing, and logistics for a complete solution to quickly and reliably move products directly from their manufacturers to customers around the world.” This capability creates some significant benefits for users of the program including:

  • Financial Risk Management: Pay only for the services you need, avoiding capital-heavy investments.
  • Speed & Agility: Quickly adjust operations to market conditions.
  • Cost Savings: Leverage Amazon and Walmart’s scale to lower logistics and fulfillment costs.
  • Full-Service Solutions: Optional, fully integrated supply chain and logistics services.
  • Simplified Operations: Centralized inventory management and cross-platform order fulfillment.
  • Optimization: AI-driven inventory placement and faster deliveries can boost sales by up to 20%.
  • Legal Compliance: Adherence to international trade rules.
  • Commercial Partnership: Initially focused on mid-sized sellers, these programs will likely expand to larger vendors and pave the way for new Joint Business Plan pillars.

Who Should Consider These Solutions? According to Simpactful Senior Partner Neal Dellett, “Smaller and mid-sized brands should evaluate Amazon and Walmart’s supply chain services as part of their annual strategy. I spent many years working with Walmart, and their operational capability is highly sophisticated. At Simpactful, we have built a team of experienced practitioners, and we have hands-on experience helping Simpactful clients through this process.” Heather Burgess, former Amazon executive and Simpactful Senior Partner adds, “We have been following this closely for a few years. The expansion of Amazon’s services and Walmart’s fast-follow announcement signal that both retailers see an opportunity of significant revenue and profit potential. As with Retailer Media, expect to see them both selling. Larger CPG companies should assume smaller competitors will increasingly take advantage of these offerings as these services mature and must therefore benchmark their own capabilities to remain competitive.”

Interested in exploring these programs? Simpactful’s team of experts can help! Our experienced Supply Chain and Logistics practitioners can support you in evaluating these new programs and implementing them in your end-to-end operations – or help you benchmark your capabilities vs these options to identify opportunity areas or risks. Contact our team today at contact@simpactful.com or 925-234-6384. Visit www.simpactful.com