Amazon is doing a great job of creating innovative ideas that allow them to directly compete with large corporations like UPS or FedEx. The introduction of new shipping techniques will lead to a surplus of employment opportunities domestically and globally and a surplus of positive impacts on communities that surround its warehouse. Amazon is continuously improving their supply chain to meet consumer needs that benefit their busy lifestyles. Supply chain and purchase management has also been affected by Amazon’s new innovations causing other corporations to make alterations.
Small businesses, entrepreneurs, and merchants that partner with Amazon will benefit substantially from an increase in profits as well as upselling their existing customers to keep their consistent reputation. An increase in delivery options and delivery vehicles has led to Amazon being a strong competitor within the ecommerce industry. Both globally and domestically Amazon is making influential as well as profitable changes to help other industries like the automobile industry due to their continuous purchases of new delivery vehicles.
Amazon is striving to keep their customer needs in mind when revamping their delivery strategies and improving merchandise quality. Due to being a domestic based company in the United States, it works hard to contribute to its surrounding economy.
Amazon is a Fortune 500 e-commerce company that was founded by Jeffrey Bezos and is headquartered in Seattle, Washington. Amazon is known for its utilization of innovative technology and logistics within its supply chain to ensure its customers and partnering companies are satisfied with their order experience as well as the merchandise purchased.
The daily lives of consumers and businesses play a very important role on how Amazon sets up their supply chain to meet their needs. The shipping strategies and clever innovations of delivery methods of Amazon has allowed it to be the largest ecommerce company in the United States of America. A busy lifestyle among consumers seems to be a common factor on why fast shipping at the best price is needed. Many individuals are constantly searching for the best deal at the right price, therefore Amazon partners with various merchants to get products to consumers in a way that keeps them satisfied. In order to fulfill orders in a timely manner Amazon has found new ways to increase delivery response time while making an impact in the automotive industry and in the lives of its consumers.
As a company Amazon takes pride in their mission statement and business tactics to reach set principles each day. The four principles that Amazon ensures must be met are to establish customer obsession rather than competitor focus, develop a passion for invention, have a strong commitment to operational excellence, and maintain long-term thinking. Upon conducting further research on Amazon, it was clear that their mission is to provide a positive impact on their customers, employees, and small businesses. They also maintain a strong bond with communities to increase social responsibility while utilizing the economic factors of each location. In order to compete with other organizations like UPS or FedEx they study Amazon studies their customer purchasing techniques to increase the purchasing power among returning consumers, while capturing the attention of new consumers. Amazon recognizes that their customers have individual preferences for the merchandise they seek as well as particular shipping techniques that best fit their daily needs.
In response to finding a way to better meet the needs of their customers, Amazon has made it a priority to continuously improve its supply chain logistics, delivery methods, and optimize warehouse space to increase its reputation among consumers and competitors. Many online merchants have noticed that ecommerce is moving towards shopping being done on smartphones, therefore partnering with Amazon to meet consumer needs is a profitable idea. By changing their shipping time to a faster alternative, it will allow for companies that conduct business through Amazon to benefit as well. Amazon’s shipping methods are dramatically impacting the economy due to the numerous benefits consumers receive when applying for Prime Shipping. As a company they have dramatically impacted domestic economic activities such as within the United States. They have also created economic ripple effect for other corporations to follow that benefits their consumers as well. According to Amazon (2019) as a company “Amazon invests in building a world-class delivery network to provide fast, free shipping to our customers…through programs like Amazon Flex and our network of Delivery Service Partners, to help get packages to customers where and when they want them”(p.1). They have recently invested in ordering 20,000 Mercedes-Benz Vans for New Delivery Service. The concept of purchasing more delivery vehicles will allow Amazon to contribute to economic growth due to their surplus of direct and indirect job creation like delivery drivers, warehouse workers, logistic managers, and customer service representatives. The increase in delivery vehicles will also create a surplus in investments Amazon provides with getting merchandise in a fast way that is just a click away.
Amazon’s purpose of purchasing 20,000 vans is to establish small deliveries to the local communities that surround the businesses. Due to delivery being the main aspect that allows them to beat their competitors they have established the main goal of the new delivery vans is to help maintain their social responsibility while creating a surplus of benefits for small businesses. According to Stevens writer for the Wall Street Journal (2018) “As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses…empower new, small businesses to form in order to take advantage of the growing opportunity in e-commerce package delivery.”(p.3). The use of Mercedes-Benz Sprinter vans is part of Amazon’s originality that helps the company be unique among competitors as those are the vehicles associated with the brand image. The order of the vans has created a surplus of business domestically within the United States due to having them manufactured in North Charleston, South Carolina. The purchase of the 20,000 vans has made Amazon the world’s largest customer of Sprinter van.
The purpose of placing such a large order of van is to increase profits and purchasing management between Amazon and small business or entrepreneurs. The small business or entrepreneurs chosen for partnership to utilize the vans are those who are already established with a large existing customer base. Amazon’s plan behind the mass purchase of vans is to lease Sprinter vans to the companies or entrepreneurs that seek them to allow them to provide delivery of the last mile. The company will not own any of the vans, instead it will farm them out to fleet management companies that will buy them and lease them to the small delivery-service providers. For the small businesses of entrepreneurs that consider this idea it will mean a new opportunity for them to be part of an organization that is the second trillion-dollar company in the United States. The partnership would benefit both partners due to social responsibility that is recognized by consumers or a delivery method that meets their needs. The partnership will also boost the domestic economy as an increase of profits will be made from the businesses that can meet delivery times fast and efficiently. Amazon views its new delivery approach as an initiative to help it control costs in a more efficient way while delivering packages to the last mile, which is usually the most expensive piece of an order. In addition to increasing its number of delivery vehicles, Amazon is also creating one day shipping to continue to positively impact the domestic economy and control its shipping infrastructure.
The main industry that will benefit from Amazon revamping the delivery services is the automobile industry. To stay in competition with other leading shipping services Amazon has established around 30,000 last-mile delivery trucks and vans since it has created an independent delivery network in 2018. The constant expansion of its shipping infrastructure means automobile manufacturers who produce gray vans will receive an increase in profits and the economy will receive more employment opportunities. The automobile manufacturers Amazon has established a partnership with to produce the vans and trucks would include Ford Motor Company, Daimler AG’s Mercedes-Benz, and Fiat Chrysler Automobiles NV. Many automobile manufacturers have been coping with a declining demand from consumers, therefore conducting business with a major company like Amazon will help establish brand recognition to potentially increase revenue. According to Gabrielle Coppola, business and economics reporter for Bloomberg News, it was found that Cox automotive reported that in 2019 “e-commerce logistics costs in the U.S. have grown 19% this year to $168 billion, about half of which is spending on transportation. Commercial vehicle sales totaled more than 734,000 through November of this year, an 8.7% increase from the same period a year ago” (2019, p.6). This is a prime example of how Amazon’s innovative shipping strategies are making a difference within the domestic economy of the United States as an increase in automotive sale will create a surplus of jobs and money. Amazon has also taken its innovative ideas to a new level by providing customers who are Prime members the ability to use one day shipping. One day shipping has created some controversy for the company due to more money being spent to achieve it than what was estimated but will put the company ahead of its competitors.
Despite the money the company has lost by building warehouses to support the one day shipping it will all pay off in the long run due to not having to depend on third party services like FedEx or UPS. During a conference call Brian Olsavsky, Amazon’s chief financial officer stated that ‘We expect we’ll be working through that for a number of quarters, but when the dust settles, we will regain our cost efficiency over time,’ (Aten, 2019, p.2). As a business strategy, Amazon continues to spend money upfront to put in place systems like one day shipping or a mass order of delivery vans in order to give it a competitive advantage. Although the new day shipping is counterintuitive, the fastest delivery speeds will generate the least carbon emissions which affects the economy in a negative way. By creating less carbon emissions will allow the company to be socially responsible and increase its outreach to consumers that pride themselves in buying from a business that does its part to minimize pollution levels. The creation of less carbon emissions will be due to products being shipped from fulfillment centers close to the customers delivery address. In order to boost the economy Amazon will also be aggressively improving as well as expanding Amazon flex, its contract delivery service. The company has also found new ideas to bring to supply chain and purchasing management such as robotic ground delivery or drones for delivery by air.
Amazon is causing big changes to the supply chain and purchasing management due to the impact it has had on the retail industry. Upon conducting further research, it was found that Amazon has been the fastest company to reach $100 billion in sales revenue, which only took the company 20 years to achieve. The company has grown between 2018 and 2019 by 30 percent and accounts for more than 13 percent of gross sales form global ecommerce. Amazon incorporates a combination of advance information technology that is paired with a large network of warehouses that holds various amounts of inventory to make its supply chain strong as well as efficient. The company continues to chain supply chain management due to its large dependency on the outsourcing of its inventory. Amazon’s successful delivery options of two- or one-day shipping is possible due to how it relies on its own company logistics. Both domestic and global economies benefit from Amazon’s change to supply chain management because of the precise way each warehouse is strategically stocked near metropolitan areas. The strategy of being closer to well populated cities may result in the company utilizing push strategy that forecasts the demand for each specific area. As the company continues to grow, the economy will positively be affected domestically as more than 75 fulfillment centers are to be placed in North America which created around 125,000 full time employment opportunities for its consumers. Amazon is forcing its major competitors to invest more in supply chain automation, lessen the overall product delivery time, increase the number of warehouses, and even engage in product manufacturing. The growth that continues to happen within the company has forced its competitors like FedEx to improve as well as invest more in their supply chain automation, while attempting to lessen the delivery time of merchandise.
Amazon is a large company that excels quickly to reach new levels of growth. As the retail industry changes Amazon continues to create new innovative ideas to meet customer needs. The company has made influential impacts to its partnering industries like the automobile industry. Amazon has created a surplus of employment opportunities and revenue that benefits the economy of the United states while remaining in strong competition with other corporations. A key factor that has contributed to the company’s growth is the creation of new supply chain and purchasing management strategies that force competitors to make changes. Amazon is growing rapidly and despite the controversy of some of their innovative ideas like one day shipping it has continuously prospered past expectations. Amazon remains as one of the largest retailers due to its persistent innovation and rapid growth in ecommerce.
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