Amazon’s Holiday Logistics Nightmare

As I was sitting here, kicking my own butt for procrastinating my holiday shopping, I started to wonder about Amazon and what a monstrous holiday logistics nightmare their distribution operations must be.

But hey, somehow they seem to have a handle on it mostly. It still makes me wonder…

How do they do it? What does their distribution network spend on transportation? [Yikes.] How much revenue is lost when merchandise goes out of stock? Or when overstock has to be clearanced out?

Any why is it that Amazon’s top 3 competitors – eBay, Apple and Walmart – don’t even come close to Amazon’s share of the U.S. ecommerce retail market when combined?

It made me remember some fascinating Amazon statistics I ran across earlier in the year:

• 197 million people get on their devices per month to visit Amazon
• In 2018, Amazon’s share of the US ecommerce market hit 49% (wonder what is now after a pandemic has lime-lighted ecommerce?!)
• This accounts for 5% of all retail spent across the entire country
• 9 out of 10 consumers price check a product on Amazon
• Amazon sells more than 12 million products (gonna need a really good supply chain planning solution to handle all that administrivia!)
• Each year the average Amazon Prime member spends $1.4k

That’s a whole lot of trucks to fill. A hefty transportation tab – especially considering the returns. Planning and replenishment mayhem. Unwieldly legwork to interpret seasonal demand trends for next year. Probably a lot of pricing inconsistencies that cause lost sales, too.

I’m sure Amazon’s holiday logistics do not quite match Santa’s challenge on December 24^th – but it’s probably pretty close. Speaking of which, don’t miss tomorrow’s special holiday blog post. Follow Blue Ridge on LinkedIn or Twitter for updates.

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