FOREIGN TRADE UNIVERSITY

SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS

---------***--------

Logistics and International Transportation

The Relevance to Amazon Logistics’ Services:

Convenience Come First

Course code : TMAE305.1

Group : 8
Instructor : M.Econ Hoang Thi Doan Trang

GROUP MEMBER

No. Full name Student ID

1 Nguyễn Thị Quỳnh Tâm 2113150064
2 Nguyễn Tiến Bảo 2311550703
3 Vũ Minh Hoà 2312550029
4 Nguyễn Thúy Hòa 2113150031

Hanoi - 2024
Table of Contents
Introduction.................................................................................................................... 3

CHAPTER I: The general introduction to Amazon Logistics....................................4

1.General introduction about Amazon..........................................................................4

2.Key Areas of Amazon's Business................................................................................4

3. Opportunities and Impacts.........................................................................................5

4. Challenges and Criticisms...........................................................................................6

CHAPTER 2: The business activities in Amazon Logistics in reality ....................6

1 Definition of E-Logistics...............................................................................................6

2. Types of goods participating in Amazon's E-Logistics .......................................... 7

3. The Logistics Facilities Model of Amazon Commerce.............................................7

4. The stages in Amazon Logistics’ mechanism........................................................... 8

Stage 1. Amazon's process of receiving goods from sellers ........................................ 8

Stage 2. Amazon's warehouse and storage operation process ................................... 9

Stage 3. Technology applied in Amazon's E-Logistics ............................................. 11

Stage 4. Amazon's order shipping process................................................................. 13

Stage 5. Multi-transportation Shipping...................................................................... 14

Stage 6. Order cancellation, return, refund policy………….....................................15

5. Advantages that the E-Logistics system brings to Amazon ................................. 15

Chapter 3: Recommendations to stimulate productivity in logistics activities........16

1.Working tendencies in Amazon for the upcoming 3 to 5 years..............................17

2.Solutions and suggestions based on Amazon’s future plans...................................19

Conclusion .....................................................................................................................21

References ......................................................................................................................22
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Introduction

Amazon is the world's largest online retailer with a market capitalization of

approximately $1,600 billion. With such a large global scale, Amazon's Logistics plays
a very important role in the operation process of this retail giant. As one of the
companies with leading technology trends, digitizing the Logistics process is a vital
factor that helps Amazon.com become the most popular e-commerce website in the
United States.

Amazon's E-Logistics model is extremely complex, specialized and worth learning by

e-commerce companies because of its effectiveness. Therefore, group 8 has spent time
researching and learning about Amazon's E-Logistics model, with the hope of providing
an overview and details of each stage of operation in this model. Through the research
and learning, group 2 hopes to bring important and useful knowledge to readers.

However, with limited knowledge, the group's article may contain mistakes. Group 8
looks forward to receiving comments and suggestions from you and your friends to
make the article more complete. We sincerely thank you.

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 CHAPTER I:

I.Introduction to Amazon
Amazon is a globally recognized multinational technology company headquartered
in Seattle, Washington. Founded by Jeff Bezos on July 5, 1994, Amazon began as an
online bookstore and has since grown into one of the largest and most influential
companies in the world. Today, Amazon's operations span various sectors, including e-
commerce, cloud computing, digital streaming, and artificial intelligence.

1.General introduction about Amazon

- Amazon is an American multinational technology company

- Headquarters: Seattle, Washington.

- Field: cloud computing, digital streaming, artificial intelligence and e-commerce.

- Amazon website: Amazon.com - official website of the company

Amazon.com Inc. was established to serve the shopping needs of the US market -
one of the largest retail websites today.

- Established: July 5, 1994, Bellevue, Washington, USA

- Founder: Jeffrey P. Bezos

- Scope of operation: Global

- Products: books, toys, cosmetics, furniture, household appliances, fashion, food,

technology, cloud computing services providing businesses with solutions for storage,
computing power, databases, networking, analytics, developer tools, security,
virtualization, ... through the Amazon Web Service (AWS) platform.

Currently, Amazon still maintains its position as the world's largest e-commerce
company in terms of revenue. And one of the reasons for Amazon's success in the e-
commerce field is its extremely effective E-Logistics operations with the powerful
support of information technology.
2. Key Areas of Amazon's Business
2.1 E-commerce:
• Amazon operates one of the world's largest online marketplaces, offering
a vast array of products, from books and electronics to clothing and
household items.
• The platform connects millions of customers with third-party sellers,
creating a comprehensive and convenient shopping experience.

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 2.2 Amazon Prime:
• Amazon Prime is a subscription service that provides members with
numerous benefits, such as free two-day shipping, access to streaming of
movies, TV shows, and music, exclusive shopping deals, and more.
2.3 Amazon Web Services (AWS):
• AWS is a leading cloud computing platform that offers a wide range of
services, including computing power, storage, and databases.
• It is a crucial component of Amazon's business, serving millions of
customers worldwide, including startups, enterprises, and government
agencies.
2.4 Consumer Electronics:
• Amazon develops and sells various electronic devices, such as the Kindle
e-reader, Fire tablets, Fire TV, and Echo smart speakers powered by
Alexa, the company's voice-activated virtual assistant.
2.5 Digital Streaming and Entertainment:
• Amazon Studios produces original movies and TV series, which are
available on Amazon Prime Video.
• The company also owns Audible, a leading audiobook service, and
Twitch, a live streaming platform primarily focused on gaming.
2.6 Grocery and Physical Stores:
• In 2017, Amazon acquired Whole Foods Market, expanding its presence
in the grocery sector.
• Amazon Go, the company's cashier-less convenience stores, offer a
seamless shopping experience using advanced sensor technology and AI.
2.7 Logistics and Delivery:
• Amazon's sophisticated logistics network includes fulfillment centers,
delivery stations, and a fleet of delivery vehicles, ensuring efficient and
rapid delivery of goods.
• The company is also exploring innovative delivery methods, such as
drone delivery through Amazon Prime Air.
3. Opportunities and Impacts
Amazon's emphasis on innovation and customer-centricity has revolutionized
various industries:
• Retail market: Amazon's e-commerce platform has transformed traditional
retail, offering unparalleled convenience and competitive pricing.

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 • Technological Advancements: Through AWS, Amazon has pioneered
advancements in cloud computing, making it easier for businesses to scale and
innovate.
• Logistics and Delivery: The company's investments in logistics have set new
standards for delivery speed and efficiency.
4. Challenges and Criticisms
Despite its success, Amazon faces several challenges and criticisms:
• Labor Practices: The company has been scrutinized for working conditions in
its fulfillment centers and treatment of employees.
• Market Dominance: Amazon's significant market share and influence have
raised concerns about monopolistic practices and fair competition.
• Privacy Issues: The use of data by Amazon's devices and services has led to
debates about consumer privacy and data security.
Amazon's journey from an online bookstore to a global technology giant
exemplifies its commitment to innovation and customer satisfaction. The company's
diverse operations, from e-commerce and cloud computing to consumer electronics and
logistics, highlight its ability to adapt and lead in various sectors. Despite facing
challenges, Amazon continues to shape the future of technology and commerce, setting
new standards and pushing the boundaries of what is possible.

Chapter II: The business activities taking place in

Amazon Logistics in reality at present
I. Definition of E-Logistics

E-Logistics refers to the application of information technology to logistics operations.

In other words, it encompasses all activities that support the movement of goods from
the point of supply to the point of consumption through electronic transactions. This
includes the use of warehouse management software, shipment tracking, and the
application of smart devices, mobile devices, and partial or full automation of logistics
processes.

The most significant difference between E-Logistics and traditional logistics is that both
inbound logistics (procurement) and outbound logistics (fulfillment) are handled through
information technology and automated processes to meet the demands of large order
volumes, sometimes reaching millions of orders per day and hundreds of thousands of
different products, with fast delivery times and high accuracy.

II. The kinds of products taking part in E-Logistics from Amazon .

1. Ship From And Sold By Amazon:

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These are items that are sold and shipped directly by Amazon. These products are
sourced directly from suppliers by Amazon, thoroughly inspected, and then listed on the
website.

2. Sold By "…" And Fulfilled By Amazon:

These are products sold by a third-party seller but fulfilled by Amazon. These sellers
have partnered with Amazon to store their products in Amazon's fulfillment centers.
Amazon then picks, packs, and ships these orders.
3. Ships From And Sold By "…":
These are products that are sold and shipped by a third-party seller. These sellers create
their own listings on Amazon and handle all aspects of the sale, from packaging to
shipping. Amazon does not take responsibility for the origin, quality, or any disputes
related to these products.

III The Logistic Model of Amazon.

Figure 1: Logistics Facilities Supporting E-commerce

(1) An inbound cross-dock (IXD) facility These facilities are strategically located near
ports and rail yards to handle incoming shipments of imported goods. They perform a
similar role than the import distribution centers established by major retailers from the
1990s to accommodate the growing quantities of foreign goods supplying retail.
(2) E-fulfillment centers (EFC) Large warehouses where products are stored and
orders are processed. Automated systems pick, pack, and ship orders efficiently. These
centers are often highly automated, using robots and advanced technology to optimize
operations.
(3) Parcel hubs and sortation centers These centers receive shipments from
fulfillment centers and sort them based on their final destination. They prepare packages
for delivery by grouping them according to specific regions or zip codes.

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(4) Parcel delivery stations Smaller facilities located closer to customers. They receive
sorted packages from sortation centers and prepare them for final delivery. Delivery
stations are often optimized for last-mile delivery.
(5) Pickup locations and local freight stations are used when deliveries are not made
directly to the final address. These small-scale facilities, located at accessible high-
density locations, are serviced with urban adapted vehicles. In most cases, a store-like
facility is used, but an emerging trend has been the usage of freight stations composed
of locker banks where customers can pick up their parcels by using a code (e.g., credit
card, QR code).
(6) Fast delivery hubs are designed to service the growing requirements for fast
deliveries of high demand items, usually within a lead time of 48 hours. To do so, these
small to medium-sized facilities are located within large metropolitan areas carrying an
inventory of a limited number of high demand items. The inventory is therefore pre-
positioned ahead of the expected demand and made available immediately for delivery
upon order.
IV. The stages in Amazon Logistics’ mechanism.
STAGE 1. Amazon's Process of Receiving Goods from Sellers
• First, the goods from the seller must be packaged according to Amazon's
requirements. Items that are not packaged properly will prolong the delivery
time, be damaged, or be delivered to the wrong location at the fulfillment center.
• When the goods from the seller are delivered, Amazon employees will scan the
barcode on the package to ensure that the item has a shipping ID in the system
and arrives at the correct fulfillment center.
• Then, Amazon employees will open the package from the seller and check the
barcode of each product in the package sent. The products in the package sent
from the seller must have a scannable barcode, each product only must have one
barcode. Products with two or more barcodes or no barcode will be labeled by
Amazon's Problem Resolution Center.
• Next, Amazon employees will assess whether the item needs any additional
preparation, to ensure that it will not be damaged during the storage and
transportation process to the customer. For example, if a seller sends Amazon a
box of dishes but the packaging is not up to par, which may cause breakage
during storage and transportation, then Amazon employees who receive the item
will have to send it to Amazon's Problem Resolution Center for repackaging.
• If the item requires additional preparation, it will be labeled with special
handling and the time it takes for the item to be placed in Amazon's warehouse
will be extended from 2 hours to 2 days.
• The items that meet the requirements or do not need special handling will be sent
to the conveyor belt and will be inspected again on 6 sides and labeled. If the
product label and product do not match, the item will be sent to Amazon's
Problem Resolution Center.
• Finally, the items that meet the labeling requirements will be gathered and neatly
placed on the shelves. These items are all labeled with their location.

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 • For items that do not meet the requirements and are sent to Amazon's Problem
Resolution Center, they will be thoroughly and thoroughly inspected, and then
will be resent to Amazon's warehouse if they pass the inspection.
Stage 2. Amazon's warehouse and storage operation process
2.1. Introduction to the Amazon warehouse system
- Amazon is currently a giant retail website with a worldwide scope of operation, with
revenue in 2004 (after 10 years of operation) reaching 7 billion USD, more than any
other retailer. And the highlight and the condition for success for Amazon is the
warehouse system. The warehouses built by Amazon are not in the usual way but are
invested in technology. It uses high technology that requires many lines of coding to
operate as complex as the Amazon website.
- Amazon's automated warehouse system applies the following technologies:
• Computer system to receive and process orders
• Information distribution station
• Cabins containing goods
• Conveyor system, optical sensors, containers, ...
2.2. Warehousing Process
* Warehousing Areas
- At Amazon, warehouses are divided into five storage areas:
• Library storage area: stores books and magazines.
• Pallet storage area: stores full-package and high-demand goods.
• Case flow storage area: stores high-demand goods and goods selected in less than one
package.
• Stock area: suitable for storing irregularly shaped items and low-demand goods.
• Random storage area: used to store goods that are in demand
at the moment or goods that are small in size
* Amazon's warehouse operations
- When an order is placed, the computer sends information to the employees so they
know which items to pick up, then they will pack the packages according to that item
for shipping.
During the shipping process, the computer will encrypt the data and the operators will
have to check this process. This is the difference between Amazon and other retailers.
2.3 Amazon's order processing process in Warehouse:
• Step 1: Check the location on the computer after the customer places the order.
Determine whether the order is fulfilled by Amazon or the company's partners. If
Amazon fulfills, the order will be transferred to the information sources
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corresponding to the warehouse.
• Step 2: The information receiving department at the points will receive the orders and
automatically distribute them to the employees.
• Step 3: The packing staff will walk along the warehouses and use computers to avoid
confusion.
• Step 4: The goods are placed in boxes and then placed on a conveyor belt more than
10 miles long running around the warehouse. The conveyor belt has 15 points reading
the goods codes to ensure accuracy. Then it will follow the belt to the packing staff.
• Step 5: The cartons are carefully packed, matched with the corresponding orders
then transferred to trucks for transportation
2.4. Amazon's Warehouse Operations
* Stocking and Sorting
- Amazon's database system will tell you where there is empty shelf space and fill it as
quickly as possible to maximize efficiency. Electronic scanners will notify employees of
the location they are looking for. Placing products in any empty space is actually a very
effective way to save warehouse space. At the same time, it also saves time searching
for goods to pack.
- It sounds counterintuitive, but finding a randomly placed product is much easier than
finding the right area to find it. If there is a separate toothpaste area, employees may
have to walk hundreds of meters to get to that area. But if toothpaste is in 50 random
locations, employees are more likely to find it sooner.
* No need to stock large quantities but need to stock a variety of goods:
- Amazon often predicts customer demand, that in the near future, which products and
items are likely to be purchased in which location, by whom and in what quantity.
Therefore, Amazon always imports a certain quantity of goods in advance, not a large
quantity, but always diversifies the imported items.- The warehouse contains a huge
amount of goods of all kinds, which can be shipped at any time, but no item will be
stored too much. They cannot have a warehouse large enough to store everything, but
each item has a large quantity.
- The modern warehouse system stores a variety of items and arranges them in a
<scientific= way, ensuring to fully meet the increasing needs of consumers, especially
in large consumer markets. allowing easier management, when customers can order
anything in Amazon's warehouse.
2.5 Storage of goods
- Amazon stores inventory in bulk or in multiple individual locations. Traditional
products are stored on low-density, corner-facing, library-like shelves to avoid abrasion
from contact with the shelf surface. Special items such as food or high-value goods may
be placed in secure or environmentally controlled areas specifically for that item at the
Fulfillment Center as appropriate.

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- If inventory is damaged or lost while under Amazon's control (at the Fulfillment
Center or during delivery to or from a customer), Amazon will buy back the inventory
from the seller.
- In Amazon's warehouses, shock-absorbing panels are always used to ensure the quality
of goods when packaged. This helps minimize the risk of breakage when impacted
during transportation. This is almost a mandatory requirement.
2.6 Security and speed control
* Strict security control:
- Workers at Amazon warehouses are not allowed to bring anything into the warehouse,
including cell phones. As a way to increase security, workers must go through an
airport-like security checkpoint every time they leave the warehouse. This ensures
security and strictly controls the loss of goods.
- Employees will enter empty-handed and leave empty-handed. Charlee Mided, an
employee at an Amazon warehouse in Phoenix, Arizona, said: <If you bring your phone
into the warehouse without permission, the security will confiscate it and you will have
to go to the security department at the end of the working day to get it back. Then you
will have to go home very late. So no one wants to violate this.=
* Speed control:
- The workers who take items from the shelves to complete your order are called
pickers. During their work, they are constantly monitored for speed and accuracy.
- My only daily job is to take 2 large yellow plastic bins, put them in a two-tiered cart,
and fill them with items that the scanner reports. At peak times, I can pick about 120+
items, but that performance is still considered good enough- a former picker shares
about his job.:
Stage 3. Technology applied in Amazon's E-Logistics
3.1. Amazon's web services
Through reliable and powerful web services, Amazon has created a global dominance..
Every second, the CRM (Customer Relationship Management) system gets information
from millions of customers through searches, data mining, etc. Whatever the customer
buys or does not buy, it provides information to the information system..
3.2. Transaction Processing System (TPS)
Amazon's transaction processing information system allows customers to make
purchases with just one click while still ensuring the security of their payment card
information. To do that, Amazon requires each customer to create a personal profile on
Amazon.com to buy any product. Thanks to machine learning technology, Amazon has
personalized the customer's profile and suggested products that match their needs.
3.3. Recommendation system
Amazon has developed an intelligent recommendation system to suggest products to
customers based on their shopping habits and search history. Every click of the
customer's mouse, every search action of theirs is tracked and recorded to suggest to
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customers. The recommendation system has improved the search experience for
customers and brought more profits to Amazon

3.4. Supply chain management system (SCM)

In 2004, Amazon achieved great success in the market thanks to the supply chain
management system. In 2000, Amazon spent a lot of money to build automated
warehouses and automated supply chain management systems. All supply chain
activities are controlled by the CRM system (customer relationship management
system).

Amazon also uses Oracle as its enterprise resource planning (ERP) system. It has a large
database of customers. The customer ordering process is automated by automatically
searching for the nearest distribution center for delivery. The system has integrated the
order fulfillment process with order tracking and minimizes product delivery errors.
3.5 Amazon Inventory Management software tools include:
∙ Sellics: This tool does product research, review management and monitors the
competitor’s growth and products.
Algorithm Amazon Machining Learning (ML), highly robust cloud-based services
that have simplified the work of developers with the machine learning technology.
∙ Forecasting: This tool charts out the snapshots and monthly inventory and provides
inventory automation. This gives a clear outlook on the ranking of sales.
∙ Manage by Stats: Based on real stats, web platform defines an important business for
smart prediction and alerts.
∙ Stitch Labs: This tool provides complete inventory control, enhance transparency and
accurate forecasting, multiple channel growth and high complex order fulfillment.
∙ Restock Pro: This works by converting the FBA data to better quality inventory
utility. This tool helps to monitor the sale velocity, competitor listing, and expected
management.
∙ Ecomdash: It features data syncing, free update, highly informative dashboard,
inventory automation, multiple sales channels and provides an amazing support overall.
3.6 Artificial Inteligence:
As globalization stays, organizations have improved flexibly chain efficiencies with
embracing AI. AI enhances the crucial elements of supply chain management.
Figure 2 describes the advantages provided by the AI for point

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.

Stage 4. Amazon's Order Shipping Process

Amazon not only ships its own orders, but also hires other shipping units. According to
data in 2020, in the US, Amazon ships 72% of orders itself, the remaining 17% of
orders are shipped by USPS - United States Postal Service, 9% of orders are shipped by
UPS, and the remaining 2% are shipped by other shipping units. How each Amazon
order is shipped depends on the size of the order.
4.1 Fulfilling orders at Amazon's fulfillment centers
Amazon's fulfillment centers are Amazon's order fulfillment centers. With modern
technology, this is where goods are gathered, classified, and packaged before they are
delivered to customers. Currently, Amazon owns a huge fulfillment center system with
more than 175 branches worldwide and tens of thousands of workers to be able to
complete millions of different orders each year.
4.2 Amazon's fulfillment centers include 3 types:
+ Small sortable fulfillment centers - small sortable fulfillment centers: where most of
Amazon's orders are fulfilled and shipped, in charge of items smaller than 30x40x15 cm
and weighing less than 11kg. The completion of these orders is automated with
automatic robots (typically Kiva) and conveyor systems.
+ Large sortable fulfillment centers - large sortable fulfillment centers: in charge of
items larger than Small sortable fulfillment centers and weighing no more than 27kg.
With large orders, operations at these centers are manual and less automated

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+ Large non-sortable fulfillment centers: in charge of bulky or large orders such as
furniture, outdoor equipment, etc. With these orders, order fulfillment is even less
automated than in large non-sortable fulfillment centers, and workers sometimes have to
create their own packaging boxes for these bulky items.
Stage 5. Shipping via Multitransportation
After being packed, most orders from Large non-sortable fulfillment centers will be
shipped directly to third-party suppliers, which means using a 3PL, typically XPO
Logistics.
Meanwhile, the remaining orders will continue in Amazon's shipping process. They will
be shipped to Sortation centers. This is a giant automated facility that sorts orders
according to their final destination. The result of this stage is pallets - shelves, on which
packages go to the same place, one area.
* For orders from far away: delivered by plane
- Pallets will be transported by trucks to
the airport, where Amazon Air planes are waiting there, to ensure orders are delivered to
local Delivery stations - shipping stations at the fastest speed.
- In addition, with a huge number of orders, Amazon also rents planes from outside
carriers such as USPS, FedEx, UPS, ... From local delivery stations, orders continue to
be transported by truck to the final destination.
* For orders in nearby areas: delivered by truck
- From Sortation centers, they are taken to Delivery stations - shipping stations.
Here, orders will be loaded onto smaller delivery trucks of Amazon itself or of shipping
partners to transport to the final destination.
- For orders in urban areas and large cities, Amazon is often responsible for transporting
orders from start to finish.
- For orders in rural, mountainous, and less populated areas, the size and quantity of
orders are not enough for Amazon to deliver the last mile. Therefore, orders will be
transported by Amazon to local post offices and from there, transferred to the United
States Postal Service - USPS system. USPS charges Amazon a cheaper rate than other
delivery units, plus it serves most locations across the United States, so wherever
Amazon needs to deliver, USPS will go there.
- However, there are remote areas with extremely low density, to the point where it is
not enough to fill a truck to deliver to the local post office, or there are obstacles in
speed, transportation capacity, ... Amazon will use UPS - United Parcel Service - a US
multinational supply chain management and freight forwarding company. Although the
shipping cost
will be high, this is a must if Amazon
wants to serve all customers across the United States.

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4.3. Track your order with Amazon Map Tracking
During the delivery process, customers can track their order location on a map with
Amazon Map Tracking with a unique identifier provided for each order
If the package is being sent via UPS, FedEx, or the United States Postal Service (USPS), the
buyer will not be able to use Amazon
Map Tracking. You can only track thedelivery progress in the traditional way: when the order
was placed, when it was shipped, etc., like Shopee and Tiki in Vietnam.

If the package is delivered by the retail giant Amazon, Amazon will send the customer a
notification allowing them to view the progress of the delivery driver on a tracking map,
available in your account on the app or on the Amazon website. The buyer can also check
the delivery status of their order themselves.

In the case of a package being delivered when the buyer is not at home, the Amazon
driver will take a photo of the package upon delivery. With the photo, they will usually also
leave a short description of exactly where they left the package. The buyer can then view the
photo in the Track Package section of the Amazon app or website.

Stage 6. Order cancellation, return, refund policy

Like other e-commerce platforms, Amazon also allows buyers to cancel orders, return goods or
get a refund if the order is defective or the product is defective
Orders shipped from Amazon.com, allow buyers to return within 30 days of delivery. However,
there are some types of goods that cannot be returned such as: Laptops, desktops and Kindles
more than 30 days after delivery, Items classified as hazardous materials or using flammable
liquids or gases, Some jewelry orders, Some health and personal care orders, etc.
Of course, if the order is returned, the customer will be refunded. There are many refund
methods offered by Amazon for customers to choose from: credit cards, debit cards, gift cards,
cash, etc.
4. Advantages that E-Logistics system brings to Amazon
1. Efficiency
For Amazon, technology development plays the most important role in bringing satisfaction to
customers and the success of the company. Therefore, in order to effectively transform input
factors into output, Amazon has focused on developing technology and building the most
efficient supply chain, to bring customers the most popular products in the shortest time with
the most optimal cost. Therefore, Amazon's E-Logistics competitor is at a disadvantage
because Amazon is the leader in applying technology to logistics, so their costs are always
lower than their competitors, allowing Amazon to sell goods, along with lower prices.
This proves that developing technology for better service has made the company more and
more famous and able to maintain lower costs than competitors, providing services to its
customers more and more cost-effectively and in the way of shopping for goods, and this is an
advantage that Amazon has over its competitors.

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2. Quality
Currently, Amazon.com is in a strong enough position to maintain the title of champion of a
global retailer with almost no worthy competitors. By applying technology to its business
model and outstanding features in warehouse design; Amazon has saved a large part of its
service costs for customers and brought
customers a fast service, in accordance with the specifications and time promised, while
providing convenience in the ability to create a comfortable feeling of buying and being able to
buy anytime, anywhere, with fast delivery. With the ability to meet this high demand, Amazon
has attracted a large number of customers to its service.
* Innovation:
With Amazon, investment research and development is always highly focused and considered
as a strategic action in improving products to become a real provider in e-commerce services.
Amazon's innovation is focused on two goals:
+ Innovation to improve product quality
+ Technology innovation to reduce costs, improve service efficiency, reduce the range of
movement Amazon does this by continuously adding features that make the delivery process
faster and the ordering process more attractive to customers, such as providing product
information and customer reviews to
each other. This outstanding feature has quickly brought customers to, such as inside the books
before buying it, reading customer ratings of interest rate products, and buying products at the
lowest price.
The internal and external infrastructure has also improved simultaneously between the fully
automated large warehouse and the online <warehouse= also becoming a single place where
they can pull all the data together to improve customer service and reduce costs, becoming the
intermediary between buyers and sellers. Together with the automated and increasingly
developed warehouse, it is these things that allow Amazon to cut on inventory costs and
ultimately offer customers cheaper prices. Both the warehouse and the location data warehouse
are the keys to Amazon's competitive advantage.

Chapter 3: Recommendations and suggestion to help stimulate

productivity in logistics activities.
Amazon is a more complex phenomenon than a highly successful marketplace selling
its items and enabling the third-party vendors to use its platform and sell its products. It
is a multinational technology company relying on e-commerce, cloud computing, digital
streaming, and artificial intelligence. To maintain the reputation it has been enjoying, it
is a must to make room for extra innovation in the infrastructure.

Currently, the company strives to be an innovative force and explore new ideas to allow
them to expand into different untapped markets. The core of the company is strong
leadership principles. This involves being owners of the short-term sacrifices for long-
term results and learning to be curious by always self-improving themselves and others
around them.

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3.1. Working tendencies in the business for the upcoming 3 to 5 years in the
company

The decline in its stock price has – unsurprisingly – led many talented people to depart,
and it’s a long road back to the previous growth premium for its stock price. Amazon
will have to start paying people the going rate in cash, and it’s already beginning to do
so. (Palmer A, December 2029)

The next five years at least will be dominated by further efforts to right the ship.
Amazon’s own retail business will continue to shrink, certainly as a percentage of the
whole business and possibly in real terms. If Amazon can find the will to do so, the best
way forward is undoubtedly to plan for the eventual elimination of its retail business
altogether.

This initiative should help it rapidly build out its own delivery network across the
country. The new initiative will give Amazon a visible presence in larger metro areas.

To reduce its reliance on UPS and FedEx, Amazon has launched various initiatives to
improve its fulfillment infrastructures (What Could Amazon Look Like In Five Years?,
2018 July)

• Utilized third-party delivery to a greater degree

• Used its dozens of distribution centers to get packages closer to the customer for
final-mile delivery
• Began developing a drone delivery service
• Started an ocean freight service
• Tested an Uber-like app that would pay people to drive packages to locations
they’re already going toward
• Amazon is rumored to be interested in buying shipping and logistics firm XPO
Logistics
• Launched Prime Air, a cargo delivery service
• Building an air cargo hub in Kentucky for the service.

Therefore, Amazon are going to keep enhance the edges they already have developed
for the past few years:

• Delivery system: Right now, Amazon has been working on a drone delivery
system that is resistant to weather conditions in order to shorten the duration of
delivery as little as 30 minutes for certain items as the company has been famous
for obsessive focus on customers’ demand in the market. At last year’s
Delivering the Future event, the company released a drone design, the MK30.
This year, they revealed the model of MK30, which will launch in 2024. The
MK30 also has new custom-designed propellers that reduce perceived noise by
almost half, is lighter and smaller, and has enhanced capabilities compared to the
current MK27 model. It can fly twice as far, allowing them to serve more
customers in more locations, and it can operate in more diverse weather
conditions, like light rain. (Amazon, October 2023)

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• The usage of AI: Artificial intelligence inside Amazon has been a great help as it
serves to respond automatically and effectively in the customer service line on
what people need online. Moreover, the company with the assistance of AI can
figure out more effective routes for delivery in order to compete with its rival
companies in the delivery system market. In other words, AI consistently points
out the efficient flow of goods and circulates it for a long time better than
humans. (M Law, January 2024) Over the next half-decade, Amazon's retail e-
commerce operations will probably transition into a mature cash cow while new
service-related ventures power the next leg of growth. Generative artificial
intelligence (AI) might be the most promising opportunity.While Amazon is
cutting operational costs, it is also ramping up capital spending into cloud-based
AI projects like Bedrock, a platform designed to help clients train and run their
large language models within Amazon's AWS ecosystem. And it is also
developing its own custom chips called Trainium and Inferentia, designed to
drive cost savings on the AWS platform and reduce dependence on third-party
suppliers like Nvidia. (Ebiefung, W, May 2024)

• Advertisement and brand reputation marketing: This is a clear sign that they
are willing to sacrifice some margin in their attempts to gain market share against
other US supermarkets, especially for delivery services. Leveraging fulfillment
strength is an interesting path to growth for Amazon in this sector. Amazon isn’t
top of mind for consumers when buying groceries at the moment, but they are a
clear leader when it comes to fast deliveries. In response to Amazon's moves,
competitors have launched and expanded their own services to strengthen their
position in the grocery market. For example, Aldi USA has formed a strategic
relationship with Instacart, to enable grocery delivery in 30 minutes. (PYMNTS,
June 2023)

• Stick to the fundamentals: Amazon’s winning formula from Day 1 has always
been putting the customer at the center of everything it does and taking the
friction out of shopping. Company officials will continue to look through the
customer lens, identify pain points, and either buy or build into a category they
see as potentially profitable. Constant focus on improving the end-to-end
customer experience and making it faster, easier, and more convenient to find,
buy and receive products leads to more traffic—from new and existing
customers, and by millions of third party sellers who can reach millions of
Amazon customers globally. This in turn increases the selection available to
customers on Amazon, further improving their experience. At the same time, it
helps us achieve additional scale and a lower cost structure, which we can pass
on to customers in the form of lower prices. This creates a closed loop, self-
sustaining flywheel. (The Imperatives of Customer-Centric Innovation | AWS
Executive Insights)

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 • Increased Focus on Data Privacy and Security: As data becomes
increasingly valuable, companies will need to prioritize protecting customer
information and complying with stricter regulations. Data is relatively scarce, but
according to the University of Florida's 2011 National Retail Security Survey,
employee theft from retailers (including warehouse thefts) amounted to close to
$15.9 billion out of 2010's total inventory shrinkage of $35.3 billion, more than
the $10.9 billion retailers lost from customer shoplifting. Judging by the images
broadcast by Amazon, according to Bloomberg, the retailer has caught workers
with all kinds of contraband: DVDs, iPads, beauty products, phone cases, video
games, a microwave and even a fellow staffer’s lunch. In 2012, Amazon
acquired robot warehouse technology company Kiva Systems for $775 million to
improve its warehouse and distribution efficiencies. As of the third quarter of last
year, Amazon was employing 30,000 bots in 13 fulfillment centers, with plans to
expand. (Why Amazon’s “Big Brother” warehouse theft surveillance is a big
mistake.)

For a company that has almost everything like Amazon, it is better for now when
they make more adjustments and slowly adapt to the new market while making sure
their current income source remains stable and profitable as a famous online Walmart-
like supermarket by focusing on its third party platform will in the end allow Amazon to
shed its most unprofitable segments, and it will also help Amazon to avoid many of the
current difficulties caused by conflicts of interest between its own retail operations and
the vendor platform.

3.2. Solutions and suggestions based on Amazon’s future plans:

In this strategic analysis, we have identified Amazon's strength as a company and

opportunities for growth. Reviewing Amazon's customer analysis, value chain analysis,
financial information and competitive analysis we were able to put together the
following recommendations.

Some potential areas that could improve Amazon's operations include:

1.Enhancing worker conditions and benefits - There have been ongoing concerns
about working conditions and labor practices at Amazon fulfillment centers. Improving
worker pay, benefits, and workplace safety could help address these issues.

2,Reducing environmental impact - As a large logistics and retail company, Amazon

has a significant carbon footprint. Investing more in renewable energy, optimizing
transportation and packaging, and pursuing other sustainability initiatives could make
Amazon's operations more environmentally friendly.

3.Improving platform governance and seller support - Amazon's position as a

dominant online marketplace has drawn criticism around issues like anti-competitive
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practices, inadequate support for third-party sellers, and content moderation challenges.
Strengthening platform governance and providing better tools and services for sellers
could address these concerns.

4.Enhancing customer service and user experience - While convenient, Amazon's

customer service and user experience have been criticized in some areas. Investing in
improved customer support, personalization, and ease of use could further enhance the
Amazon shopping experience.

5.Diversifying beyond retail - As consumer habits evolve, expanding Amazon's

business beyond its core e-commerce operations, such as further developing Amazon
Web Services, Amazon Prime Video, Alexa, and other growing divisions, may help
drive future growth and innovation.

Some sellers seem to have their accounts verified, while others receive confusing
notifications about VAT-related issues. Despite submitting the required documents,
many of us are left in the dark, uncertain of what's next or how long our funds will be
withheld. This disarray suggests either a significant organizational and communication
breakdown within Amazon or an indifference towards the plight of their sellers -
perhaps it's a combination of both:

1.Establish a Genuine Complaint Procedure: The current appeal process, often

resulting in generic automated responses, is inadequate. We need a system where real
people address our concerns, providing meaningful engagement rather than repetitive,
unhelpful replies.

2.Improve Seller Support: Interacting with bots might be acceptable for initial
inquiries, but there should be a mechanism to escalate unresolved issues to properly
trained human representatives. Effective seller support is crucial for resolving complex
problems that automated systems cannot handle. At the same time, they should be able
to flag potential problems to management, before they get worse.

3.Treat Sellers as Partners: Amazon should consider forming a small group of seller
representatives. These individuals could provide valuable insights before implementing
changes that directly impact sellers. Moreover, it would make sense to establish an
independent online sellers association, possibly including sellers from other platforms,
that could be a powerful voice. Such a body would be more effective than us
individually.

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Conclusion
Ultimately, balancing Amazon's rapid growth and market dominance with improved
social and environmental responsibility, better working conditions, and stronger
platform governance could benefit the company, its workers, customers, and
communities in the long run.

In conclusion, Amazon will continue to monetize its existing customer base and
vendor base, although those revenue sources may be nearing their limits. And it will
back further away from expensive adventures like groceries and retail healthcare.
Amazon has specific competitive advantages in some areas, but those sectors don’t
qualify. Many of us hope for a more collaborative and respectful relationship with
Amazon, more like the partnership Amazon claims we have. If our concerns
continue to be ignored, it's important that we collectively amplify our voices. The
aim is not to be negative but to achieve meaningful improvements. As this fiasco
unravels, we must maintain pressure on Amazon to ensure we are treated better and
we don't feel so vulnerable, constantly fearing that a decision by a bot can destroy
our livelihood.

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Thamma2, E. Daniel Kirby3 1,2,3Robotics and Mechatronics Engineering Technology,
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Amazon Staff. (2023, October 18). Amazon announces 8 innovations to better deliver

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