Amazon sellers can now store U.S.-destined inventory in bulk at the e-commerce giant's new distribution center in the manufacturing hotspot of Shenzhen, China, according to an April 9 announcement. The Global Warehousing and Distribution (GWD) location will allow sellers to "seamlessly replenish" goods for Amazon's U.S. fulfillment network when needed. GWD is positioned as a low-cost storage option at a product's manufacturing origin, with cross-border transportation serviced via Amazon Global Logistics (AGL).
Benefits to using the Shenzhen facility include storage costs up to 45% lower than its U.S.-based bulk storage services, Amazon Warehousing and Distribution (AWD). Sellers can also get inventory to U.S. fulfillment centers up to seven days faster through the Shenzhen storage and AGL combination. Amazon called the services powered by the Shenzhen facility the first step in its ambition to help merchants sell their goods "globally from day one." The e-commerce giant is facing steep competition from rival Walmart, which has been scaling its own international logistics services for merchants.
Sunny Jain, worldwide head of Fulfillment by Amazon (FBA), said in a LinkedIn post that the Shenzhen location enables sellers manufacturing in China to store inventory closer to the origin point, and then bring products into the U.S. only as demand builds. "It's about cash flow, flexibility, and the ability to test new regions without excessive risk," Jain said. "The response has been immediate. Within two days of our announcement, sellers are already booking shipments." According to the South China Morning Post, Amazon plans to extend its GWD model to China's Yangtze River Delta region and expand distribution to Europe and Japan. China-based sellers represent roughly half of Amazon's global active seller base, per Marketplace Pulse research.
Key Takeaways:
1. Amazon opened the Global Warehousing and Distribution center in Shenzhen.
2. Storage cost is up to 45% lower than U.S.-based AWD service.
3. Cross-border transport integrated via Amazon Global Logistics.
4. China-based sellers represent roughly half of Amazon's global active seller base.
5. Expansion planned to Yangtze River Delta, Europe and Japan.
