Amazon Pallet Program, Delivery Race, Bottlenecks
Pallet Ordering at Amazon
We have heard Amazon’s pallet ordering program come up more frequently over the last month. This program enables manufacturers to sell Amazon pallet quantities in exchange for a discount. The value of such a program will depend on several company-specific factors (discount required, potential savings, etc.), however there are a few watch outs worth highlighting. Some manufacturers have found issues around price differences between eaches and pallets, with some having to set up a different vendor account to manage. We have also seen some manufacturers have to engage with their vendor manager to ensure item set up is done correctly. On the positive side, we have heard manufacturers in the program benefiting from Amazon rounding up its order quantity to meet the pallet size and also giving vendors in the program preferential status in the fulfillment centers. Like many Amazon programs, we recommend vendors think big, but start small with a test of a handful of ASINs on this program if they see merit, and then expand based on those early learnings.
Walmart and Target Offer Faster Fulfillment Options in Response to Amazon One-Day Shipping
Both Walmart and Target unveiled faster fulfillment options this week following Amazon’s recent announcement that it would move from free two-day delivery to free one-day delivery for Prime members. Walmart announced this week that it would provide free NextDay delivery to customers without a membership fee (minimum $35 order), offering a selection of 220k items (roughly aligns with the assortment at a supercenter). This service will start in Phoenix and Las Vegas, then expand to Southern California, and the company expects to reach 75% of the US population by the end of the year. Target then announced that it is expanding their Drive Up pickup service to 1,250 stores, in addition to the 1,500 stores with same day delivery powered by Shipt.
Potential Delays at SIOC Testing Facilities
Polling from our recent LiveCast event indicated 50% of brands are concerned about the potential for bottlenecks to develop at SIOC testing facilities, while 13% are already experiencing delays as the August 1st deadline approaches.
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