We have been telling you how Amazon has been innovating and using the first mover advantage to spearhead the Indian ecommerce space. All set to improve its logistics and back-end infrastructure, the crux of any ecommerce chain, Amazon has announced plans to open its second Fulfillment Center in India near Bangalore.
Spread over 150,000 square feet, it will be operational by February with both inbound and outbound services. The new, modern, multilevel, secure facility equipped with Amazon’s world-class and state-of-the-art warehousing systems and processes will be able to stock and store millions of products of all sizes across several categories from sellers using Fulfillment by Amazon.
Amazon Fulfillment Centers are warehouses where online retailers who use Fulfillment by Amazon (FBA) services, stock their inventory of their products. When using FBA, sellers across India send their products to Amazon’s fulfillment centers and once an order is placed, Amazon packs and ships the order to the customer without the sellers having to do anything. This enables the seller to concentrate on their core competency i.e. sales, rather than have the headache of logistics or returns management.
FBA advantages to customer: Fulfilled by Amazon items can be identified with a special badge. These items are- Eligible for FREE Delivery, Eligible for Cash on Delivery, Packed and Dispatched by Amazon, Delivery tracking to your doorstep, Returns eligible for FREE pick-up.
Advantage to Sellers: Sellers save money by replacing their upfront capital expense with low variable cost and pay only for the storage space they use and the orders Amazon fulfills. They always have the flexibility to choose the number of products they want to have fulfilled by Amazon and scale according to their business requirements. Globally, sellers converting items to FBA generally see a 30-40% uplift in sales.
Amazon’s first and current Fulfillment Centre is located on the outskirts of Mumbai, in Bhiwandi, and is also spread across 150,000 square-feet area. The Fulfillment Centers should be geographically located in a strategic manner, so after covering the financial heart of India, Amazon has set its eyes on South India.
Why this investment? Ecommerce space is heating up. With dozens of websites offering discounts to woo customers, timely delivery is one thing which will cater to the impulsive buyer. Hence we see the war for same day delivery. Once the brand is registered in their minds, customers would prefer it during the next transaction.
This investment is part of Amazon’s continued and relentless focus on enhancing online shopping experience for consumers in India and enabling Small and Medium Enterprises (SMEs) to get a scalable and robust national platform using Fulfillment by Amazon.
The new facility will provide existing and new retailers form South India closer access to Amazon’s world-class fulfillment capabilities. Customers can expect broader selection across categories available for immediate shipment and eligible for Amazon’s Next-Day Guaranteed service.
Clearly a win-win situation for all, the sellers, the customers plus the Government who is happy with the increased employment rate due to such investment by foreign retailers. With the entire hullabaloo around FDI in retail, if this is what it will lead to, it should surely be welcome.
