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Opinion: A Crack In Amazon’s Armor?

by Jon Eickman on 2019-12-18 08:42:32

Retailers and fulfillment companies alike have spent years working to keep up with the standards Amazon has set and that consumers have therefore come to expect. Amazon has made massive investments into their fulfillment infrastructure and recently into their own private parcel delivery arm. With Amazon’s large footprint and war chest, some have questioned if Amazon can be beat or if sooner or later all retailers are going to need to fall into the Amazon line.

iStock-1155722333However, we have seen over the past weeks, a crack in the Amazon armor. Shipmatrix is reporting that Amazon’s on time delivery rate fell to 93.7% following Cyber Monday, well below acceptable industry standards and a far cry from their 98.2% the week prior. Amazon disagrees with this data in a public statement (Amazon is notoriously secretive about shipping and sales data) but the public outrage they have faced on social media tells a different story.

In the Amazon Facebook post comment sections, you can find 100s of consumers complaining about delivery delays and saying other retailers are not having the same issues that Amazon’s deliveries have been experiencing. These comments are from an Amazon post advertising free returns on December 13.

 

“Returns?? It would be nice to actually get the items first!! Your deliveries are the worst I have ever seen! I have items just floating around out there, every day it says my delivery is expected on a different day! I have some items that were supposed to be here Thursday and I still do not have them and it was medication for my dog, very important! I have other items that went from the post office in the city I live in to another post office outside of my city, that was Monday, I still do not have them! In my opinion, you guys have totally screwed up this year! I ordered something from Walmart and got it the next day!”

“Have to get the product in order to return it. Your shipping this year is absolutely terrible. Missing orders, wrong orders just terrible. I writing this while once again waiting for a response from customer service who so far knows very little how to help in any way”

“I’m extremely disappointed with Amazon. Amazon has gone completely downhill in the last couple months. You guys were always reliable, absolutely not anymore. I’ve been waiting on 3 packages since Thursday. Yesterday it showed they were on the delivery truck and then at 5pm, it was put back into a delayed status. These were all gifts for a party this weekend. No longer reliable.”


Succeeding this holiday season is critical for Amazon’s delivery network. Amazon’s delivery vans are now handling a lion’s share of amazons shipments and this is the first year that Amazon is facing the holidays without its large partner, FedEx. FedEx canceled its air and ground agreement with Amazon this year when Amazon announced “One Day Shipping”.

Considering this is Amazon's first real holiday doing their own deliveries, it is expected that they would have some challenges. However, this delivery misstep isn’t the only crack in the armor. Reports of overworked amazon workers, high turnover, and warehouse injuries seem to come out of Amazon’s fulfillment centers with more and more frequency. It may be that Amazon has put the horse before the cart, promising faster and faster delivery without the processes and practices needed to achieve those goals. Unfortunately, it’s the consumers, retailers, and warehouse workers that pay the price.

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Fulfillment by Amazon doesn’t have to be the de-facto standard and until it’s a requirement of the platform, retailers can take advantage of amazons marketplace through seller fulfilled prime without the risks of using Amazon’s fulfillment and delivery services.

There are a lot of reasons to consider Seller Fulfilled Prime. Retailers working with seller fulfilled prime have greater control over their inventory, their processes, and widely report a far greater customer service from 3PLs over Amazon. Amazon has simply grown too large and disjointed to provide the level of care to their workers and their clients in an effective way and that may be their greatest weakness of all.

At IDS, we are dedicated to our employees and our clients. Throughout the year, we are constantly looking for process improvements and optimizations to continually exceed the expectation of our clients and their customers. We have been talking about how this holiday season was going to be an unique challenge for the fulfillment industry given the record breaking sales numbers and the record short number of delivery days. Thanks in HUGE part to the people that make us great (our amazing warehouse staff) but also to our processes, we were able to hit all of our client delivery goals this season, despite the surges in deliveries.

These will continue to be interesting times for fulfillment and ecommerce, but the future world that some have painted, with Amazon dominating over all seems further away after the hiccups Amazon has seen in 2019. Retailers should know that they have options and shouldn’t feel pigeon holed into working with Amazon fulfillment. After the holidays is a GREAT time to evaluate if your current fulfillment provider is hitting the mark and a great time to ask what can IDS do to take the stress out of fulfillment.

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