Amazon fully upgrades its logistics system! Listing rankings will also change

In the United States, Amazon operates a national delivery network with warehouses in cities across the country. If a Detroit customer buys a product that is not in stock locally, Amazon will dispatch it from warehouses in other regions.

However, long-distance transportation is costly for Amazon and also increases logistics time.

Amazon CEO Andy Jassy said how to get orders from Amazon warehouses to customers faster while reducing costs is a "critical challenge" for the company.

In response to this situation, Amazon divided its distribution system in the United States into eight regions, hoping that this way it could deliver packages over shorter distances.

“Each region has a deep inventory mix that allows it to be largely self-sufficient while still being able to support other regions of the country if necessary,” Jassy said in an April letter to shareholders.

At the same time, the changes could affect the results consumers see when searching for products on Amazon.com, with Amazon saying that items that are closer to customers will appear higher on the search results page.

Jassy said that in the future, the number of products that can be delivered on the next day and the same day will increase, and Amazon is expected to achieve the fastest Prime delivery speed in history in 2023.

But it’s unclear how important same-day delivery will be to customers after several fast-delivery startups emerged to offer groceries and convenience store products within 30 minutes, many of which have failed.

However, for Amazon, the more direct benefit may be cost cutting.

The e-commerce giant has cut about 27,000 jobs after overexpanding during the pandemic, its most significant cost-cutting and efficiency-enhancing achievement in recent months.

In addition, Amazon is now charging for services that were previously provided for free. For example, consumers will be charged $1 if they choose a UPS station when returning goods.

In terms of e-commerce, Amazon has begun to label products with high return rates as "frequently returned", probably to make consumers think twice before placing an order, which can also reduce its own return costs.

With this combination of measures, Amazon's financial report does look better, but whether it can build on its success remains to be seen.

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