Amazon held Accelerate last week in Seattle. It's the annual conference for marketplace sellers, and most of the coverage out there is written for Amazon sellers who live in Seller Central day in and day out. If you don't know how to spell Seller Central, but your CPG or DTC brand sells on Amazon or is planning to, keep reading.

The biggest story from Amazon Accelerate isn't really about the marketplace itself. Amazon wants to be the warehouse behind good old-fashioned brick-and-mortar retail. Yes, you read that right. Amazon is selling the back end of retail now - warehousing, shipping, retail distribution, the Prime badge - and not only to its sellers.

Amazon says its supply chain services business will grow more than 70% this year. The customers it put on screen were P&G, General Mills, 3M, American Eagle, Lands' End and Vitamin Shoppe, which tells you who it's going after. If you use a third-party logistics (3PL) company for warehousing, Amazon wants to replace it.

So how exactly will it work?

  • You ship your inventory into Amazon's warehouses - AWD for bulk storage, FBA for individual orders.
  • From AWD, that inventory can now fill purchase orders from Target, Walmart, Home Depot, Chewy, CVS and TJ Maxx.
  • Shoppers on your Shopify site can choose Prime delivery at checkout, and Amazon ships the order.
  • A new hub, still a small pilot, lets sellers manage Shopify, Walmart, eBay and TikTok Shop from inside Amazon's tools.
  • There are discounts for putting more through Amazon: up to 25% off fulfillment, and 35% on TikTok Shop orders.

Where it gets complicated

In theory, it sounds amazing. Then again, a lot of things Amazon launches sound great in theory. In practice, try shipping your inventory to AWD right now. You're lucky if it checks in within 4 weeks.

Then there's the bigger question. One company holds your inventory, ships your orders, fills your retail POs and sees your sales everywhere. What happens if there's a problem? What happens if Amazon wakes up tomorrow and decides to double the cost of this service? I've worked with Amazon since 2011, and fees have gone mostly one way.

Last but not least, one inventory pool sounds efficient until a DTC promotion or a TikTok moment empties it, your Amazon listing goes out of stock, and the ranking you spent a year building goes with it.

When it's worth it

I know I just listed a number of reasons NOT to use this. When it comes to my best friends from Seattle, I tend to be somewhat suspicious. But that doesn't mean you shouldn't use the program. It can be a good deal if you don't have real fulfillment yet, or your 3PL can't ship fast enough, because two-day delivery and the Prime badge do move conversion. It's also a cheap way to test a new channel. In Amazon's own case study, Clean Skin Club grew TikTok Shop 200% on Amazon's logistics without hiring logistics staff. And if your inventory already lives in Amazon's network, using it for other channels means fewer warehouses and less cash stuck in transit.

One more thing to consider: packaging. Most multichannel brands pack differently for each channel. Retail gets cartons with retail-ready packaging. DTC customers usually get a nice shipper box. Amazon customers depend on the brand - some brands have Amazon-specific packaging, some ship in bulk, some ship in shipper boxes. What's allowed and what isn't in packaging going to Amazon customers is a brand-by-brand conversation. But if your DTC brand lives on the unboxing and the post-purchase experience, figure this out before you move a single unit.

What I'd do this week

Find out what share of revenue and fulfillment runs through Amazon today, and what it would be after. Price Amazon against your current 3PL with peak-season fees included. If inventory is going to be shared, set a floor for Amazon stock that other channels can't touch. Read the data terms before you connect Walmart or Shopify to Amazon's dashboard. And ask your ops lead one question: if we had to move off Amazon's logistics in 90 days, could we?

Then decide with a spreadsheet open, not because the setup took five minutes.

Part 2 next week: Amazon's AI wants to run the account for you.