Amazon offers a variety of services to help sellers and businesses manage inventory and logistics. Two of these services are Amazon FBA (Amazon Logistics) and Amazon AWD (Amazon Warehousing and Distribution). While both services are designed to streamline supply chain and logistics processes, they have different features and use cases.

What is Amazon Warehousing and Distribution (AWD)

AWD (Amazon Warehousing & Distribution) is a new feature released by Amazon in September 2022, which, according to the official statement, is specifically designed to solve the challenges of replenishing sellers on the US Amazon site.

When the seller's FBA warehouse has no capacity, it can be shipped to the AWD warehouse, and once Amazon monitors the capacity of the seller's FBA warehouse, it will automatically replenish the goods to the FBA warehouse without the need for the seller to manually operate again. It is equivalent to Amazon's official "Overseas Warehouse Large Goods Transshipment" service.

There is no cost to join the program. You will only have to pay when you send your inventory to warehousing and distribution facilities.

If you choose to ship to an Amazon AWD warehouse and automatically replenish to an Amazon Operations Center via AWD, there are no FBA Inbound Configuration Service Fees, Warehouse Utilization Surcharges, Low Inventory Level Fees, or Inventory Warehouse Overage Fees.

What is the difference between AWD and FBA warehouses?

FBA is relatively more expensive, especially for peak storage, and sellers have less control over the delivery process and branding.

AWD is not suitable for distributing individual customer orders; it focuses on bulk storage and distribution. Operationally it requires additional steps to move inventory from AWD storage to a distribution center.

Benefits of Amazon AWD for Sellers

1. Cost savings

AWD offers economical bulk storage options that are cheaper than traditional storage, especially for large inventories.

Centralized storage and efficient distribution reduces overall logistics costs.

Reduce costs associated with moving inventory between storage locations.

2. Inventory optimization

Ensure efficient distribution of inventory to Amazon distribution centers or other locations based on demand, preventing out-of-stocks and overstocking.

Enhances the ability to manage inventory levels across multiple locations to ensure products are available when needed.

3. Scalability

AWD can handle varying inventory levels, allowing operations to easily scale based on demand.

Provides the infrastructure needed to support growing inventory levels and distribution needs.

4. Improved Supply Chain Efficiency

Centralized storage and distribution simplifies supply chain operations, reducing complexity and increasing efficiency.

Enables faster replenishment of inventory to Amazon distribution centers, ensuring products are always available to customers.

5. Increased Flexibility

Provides flexible storage and distribution options to meet sellers' specific needs.

Can be used in conjunction with other distribution methods, such as FBA, to provide a comprehensive logistics solution.

Points to note

• Replenishment from AWD warehouse to FBA warehouse is subject to additional transportation charges in cubic feet.
• If your FBA warehouse is out of stock, shipments from AWD warehouse will not be automatically replenished to FBA warehouse.
• Overstock in FBA warehouse cannot be deployed to AWD warehouse.

Simply put, the advantage of AWD warehouse is that you can replenish unlimited shipments, provided you can pay the storage fee for each replenishment.

Amazon AWD Seller FAQ

1. How can I begin using Amazon AWD?

To get started with Amazon AWD, you need to sign up for the service through your Amazon Seller Central account. Once registered, you can create shipments and send your inventory to Amazon's AWD facility.

2. How does Amazon AWD integrate with other Amazon services?

Amazon AWD integrates seamlessly with other Amazon services, such as Freight Forwarding by Amazon (FBA). Inventory stored in AWD can be efficiently distributed to Amazon's logistics centers for FBA processing, ensuring a smooth and cohesive logistics solution.

3. What are the costs associated with Amazon AWD?

The costs of Amazon AWD include warehousing and distribution fees. Warehousing fees are based on the amount of inventory stored, while delivery fees depend on the amount of inventory to be delivered and the destination. Detailed pricing information can be found in your Seller Center account.

4. Can I use Amazon AWD if I don't use FBA?

Yes, you can use Amazon AWD even if you don't use FBA. AWD provides large-scale storage and distribution solutions that complement other distribution strategies, including self-delivery or third-party logistics (3PL) providers.

5.Can I Outsource Order Fulfillment to a 3PL?

Yes, of course, sellers can outsource order fulfillment activities to a third-party logistics (3PL) provider. This eliminates the need for in-house infrastructure investment and your logistics journey is in safe hands.

6. Can I track my inventory in Amazon AWD?

Yes, you can track your inventory in Amazon AWD through your Seller Central account. Amazon provides detailed inventory reporting and tracking information so you can monitor inventory levels and delivery status in real time.

7. How does Amazon AWD handle returns?

Returns are typically managed through the distribution service responsible for final delivery to the customer. If you use FBA in conjunction with AWD, returns are handled through Amazon's standard FBA returns program. If you are using other delivery methods, returns will need to be processed according to your specific return policy.

8. Does Amazon AWD have minimum storage requirements?

Amazon AWD does not have specific minimum storage requirements, so it is flexible to accommodate businesses of all sizes. However, it is designed to provide the most cost-effective solution for bulk storage and large inventories.