Back to top

Image: Bigstock

Amazon (AMZN) Unveils Supply-Chain Solution for Sellers

Read MoreHide Full Article

Amazon (AMZN - Free Report) unveiled a solution named Amazon Warehousing & Distribution (“AWD”) for sellers in a bid to solve their supply-chain issues.

AWD is a pay-as-you-go service, which reduces storage costs and saves time consumed in the inventory management process.

AWD enables sellers to store their bulk inventory in Amazon fulfillment centers and avail of automated distribution. AWD users will be able to move their inventory from upstream facilities to Amazon facilities seamlessly. They can consolidate their global inventory as well.

The underlined solution will help sellers to decrease their inventory-management expenses and improve their operational efficiencies.

The latest move bodes well for the e-commerce giant’s growing efforts toward delivering a better business experience to the sellers on its platform on the back of its technically advanced solutions.

AWD is available to sellers using Amazon’s program, which allows them to outsource order fulfillment to the company.

Amazon.com, Inc. Price and Consensus

 

Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Move to Benefit

We believe that Amazon will gain solid momentum among sellers on the back of the above-mentioned benefits of AWD amid the pandemic, wherein supply-chain constraints have become the prime problem of businesses.

Hence, AWD is likely to bolster the seller base of Amazon, which remains crucial for its retail business. This is also expected to strengthen Amazon’s relationship with third-party sellers, which will contribute to the company’s financial performance.

This, in turn, is likely to instill investor optimism in the stock in the days ahead.

In second-quarter 2022, sales generated by third-party seller services rose 9% on a year-over-year basis to $27.4 billion.

Coming to the price performance, Amazon has lost 23.3% on a year-to-date basis against the industry’s decline of 25.3%.

Fulfillment Strength – Key Catalyst

Amazon’s strengthening fulfillment network remains a major positive. Its growing investments in fulfillment centers, which act as giant warehouses that help online retailers store and ship products and handle returns quickly, are noteworthy.

Expanding distribution, as well as sorting centers around the world, is another positive.

The strengthening delivery system of Amazon remains the key catalyst for the company.

The above-mentioned factors have become crucial for Amazon to drive the customer momentum of the sellers on its platform and deliver an enhanced shopping experience to customers. This, in turn, will aid it in sustaining its dominant position in the e-commerce market.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the retail-wholesale sector are The Kroger (KR - Free Report) , Dollar General (DG - Free Report) and Rush Enterprises (RUSHA - Free Report) . All companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Kroger has gained 7.4% over a year. The long-term earnings growth rate for the KR stock is currently projected at 11.3%.

Dollar General has gained 3% on a year-to-date basis. The long-term earnings growth rate for the DG stock is currently projected at 11.24%.

Rush Enterprises has returned 15.9% on a year-to-date basis. The long-term earnings growth rate for the RUSHA stock is currently projected at 15%.

Published in