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I work for a similar company. Amazon knows that a certain percent of people in a certain area all demand xyz items, so they place those items as close to the consumers as possible. Therefore, they can offer fast and affordable fulfillment. I wouldn't mind leaving and doing something else, the whole industry is an absolute mess.
The industry is a mess but you could probably clean up $$$ taking SCM knowledge to real world applications to fix this mess.
My local cafe / restaurant had this message on the menu:
”Due to supply chain shortages and increasing inflation, we have added 4% to your bill.”
😂😂😂
I'm thinking of filling a furniture niche and I hate to say it but Amazon's "Fulfilled by Amazon" program looks really enticing as a potential small business owner. They take care of storage, packaging, and shipping (for a price, of course), and, of course, the online retailing platform, but you basically get a professional back office with no overhead cost. All I have to do if focus on my cool furniture designs and sourcing materials.
The pricing actually isn't that bad. Looking at my spreadsheet, on a 20 lb, $190 furniture item (gross price), it costs me approximately $42 to do business with Amazon, but they take care of everything. I'd have to really scale up to be able to knock my indirect costs down to $42 per item.
When a large part of your business model is simply using pre-existing and (to a large part) publicly managed infrastructure (the post office), it's not as complicated as it looks. Also, I would imagine they rely strongly on the classic optimization problem of the traveling salesman to optimize their internal distribution networks.
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