Distribution systems and strategies do not guarantee the success or growth of e-commerce and e-business in the distribution industry. However, recognising the importance of distribution systems and strategies and developing and continuously improving distribution systems significantly affected the current success of Amazon. Recognising that "distribution systems will be one of the things that will separate the winners from losers", Amazon from early on in 1999 "decided to take command of inventory and shipping activities themselves". Amazon recognised that all the best websites, marketing, or other features would be useless if the products were not delivered on time. It then determined that the expansion of its own distribution centres would increase efficiency and decrease shipping costs, and by 2001, operated an aggregate of over 4 million square feet of fulfilment facility spaces in Delaware, Kansas, Kentucky, Nevada, North Dakota, and Washington in the United States and abroad in United Kingdom, France Germany, and Japan. Currently, Amazon operates an aggregate of over 138,825,900 active square feet of warehouse spaces in 28 states throughout the United States and Canada, Mexico, United Kingdom, Germany, France, Italy, Spain, Czech Republic, Poland, China, Japan, India, and Brazil. In the beginning, Amazon packages were typically picked up by UPS, FedEx, or the U.S. Postal Service at one of the fulfilment centers. However, in addition to the cost issue, these third-party delivery companies have not always been reliable, and when UPS and FedEx failed to deliver thousands of packages guaranteed to be delivered by Christmas. Amazon was forced to revamp and make strategic moves to gain more control over its delivery system: To "increase capacity for package delivery", Amazon purchased thousands of semi-truck trailers "to transport packages between fulfilment and sort centres around the country."
Distribution systems and strategies do not guarantee the success or growth of e-commerce and e-business in the distribution industry. However, recognising the importance of distribution systems and strategies and developing and continuously improving distribution systems significantly affected the current success of Amazon. Recognising that "distribution systems will be one of the things that will separate the winners from losers", Amazon from early on in 1999 "decided to take command of inventory and shipping activities themselves". Amazon recognised that all the best websites, marketing, or other features would be useless if the products were not delivered on time. It then determined that the expansion of its own distribution centres would increase efficiency and decrease shipping costs, and by 2001, operated an aggregate of over 4 million square feet of fulfilment facility spaces in Delaware, Kansas, Kentucky, Nevada, North Dakota, and Washington in the United States and abroad in United Kingdom, France Germany, and Japan. Currently, Amazon operates an aggregate of over 138,825,900 active square feet of warehouse spaces in 28 states throughout the United States and Canada, Mexico, United Kingdom, Germany, France, Italy, Spain, Czech Republic, Poland, China, Japan, India, and Brazil. In the beginning, Amazon packages were typically picked up by UPS, FedEx, or the U.S. Postal Service at one of the fulfilment centers. However, in addition to the cost issue, these third-party delivery companies have not always been reliable, and when UPS and FedEx failed to deliver thousands of packages guaranteed to be delivered by Christmas. Amazon was forced to revamp and make strategic moves to gain more control over its delivery system: To "increase capacity for package delivery", Amazon purchased thousands of semi-truck trailers "to transport packages between fulfilment and sort centres around the country."
Chapter14: Marketing Channels And Supply Chain Management
Section14.2: Procter & Gamble Tunes Up Channels And Transportation
Problem 2C
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Distribution systems and strategies do not gaurantee the success or growth of e-commerce and e-business in the distribution industry. However, recognising the importance of distribution systems and strategies and developing and continuosly improving distribution systems significantly affected the current success of Amazon. Analyze these statements and advise Amazon on the factors to consider when selecting a distribution channel.
Transcribed Image Text:Distribution systems and strategies do not guarantee the success or growth of e-commerce and e-business in the
distribution industry. However, recognising the importance of distribution systems and strategies and developing and
continuously improving distribution systems significantly affected the current success of Amazon. Recognising that
"distribution systems will be one of the things that will separate the winners from losers", Amazon from early on in 1999
"decided to take command of inventory and shipping activities themselves". Amazon recognised that all the best websites,
marketing, or other features would be useless if the products were not delivered on time.
It then determined that the expansion of its own distribution centres would increase efficiency and decrease shipping costs,
and by 2001, operated an aggregate of over 4 million square feet of fulfilment facility spaces in Delaware, Kansas,
Kentucky, Nevada, North Dakota, and Washington in the United States and abroad in United Kingdom, France Germany,
and Japan. Currently, Amazon operates an aggregate of over 138,825,900 active square feet of warehouse spaces in 28
states throughout the United States and Canada, Mexico, United Kingdom, Germany, France, Italy, Spain, Czech Republic,
Poland, China, Japan, India, and Brazil.
In the beginning, Amazon packages were typically picked up by UPS, FedEx, or the U.S. Postal Service at one of the
fulfilment centers. However, in addition to the cost issue, these third-party delivery companies have not always been
reliable, and when UPS and FedEx failed to deliver thousands of packages guaranteed to be delivered by Christmas.
Amazon was forced to revamp and make strategic moves to gain more control over its delivery system: To "increase
capacity for package delivery", Amazon purchased thousands of semi-truck trailers "to transport packages between
fulfilment and sort centres around the country."
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