Amazon to get even faster with this new move

It's sending workers directly into supplier warehouses to fill orders for diapers and other items on the spot.

By InvestorPlace Oct 15, 2013 12:37PM
Amazon.com logo © Spencer Platt/Getty ImagesBy Christopher Freeburn

iplogoAmazon (AMZN) is testing out a new way to accelerate the delivery of common household items.


The Internet shopping giant has set up small distribution units inside the warehouses of major consumer goods manufacturers, including Procter & Gamble (PG).


Amazon workers receive goods directly from the manufacturer and fulfill customer orders on the spot. Amazon calls the program "Vendor Flex." By leveraging the manufacturers' distribution systems, the retailer reduces its own logistics costs, The Wall Street Journal notes.


Sources say that Amazon is currently in talks to open fulfillment operating in the warehouses of other companies including Georgia Pacific and Kimberly Clark (KMB).


That cost cutting allows Amazon to compete with discount retailers like Wal-Mart (WMT) and Costco (COST) on price, while also trimming delivery times.


While Amazon is trying to boost consumer goods sales, everyday household items still comprise a tiny portion of online sales -- just 2%, according to analysts. However, the market has the potential to grow sharply in coming years.


Shares of Amazon fell nearly 1% Tuesday to trade at $307.65.


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Tags: AMZNPGWMT
8Comments
Oct 15, 2013 5:34PM
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My experience with Amazon as of late seems to be that their service has slowed. 
Oct 15, 2013 5:55PM
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Amazon is crooked so is Bezos. With an article less  than a week ago talking about how bad it would s to work there you honestly think this is gonna help . 
Oct 15, 2013 6:48PM
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Amazon has been getting slower and slower. Used to be an item would be shipped out the same or next day it was ordered. Now it often takes several days before it goes out of their doors unless you buy Prime for about $80 per year. So I pay extra to get the same shipping speed I used to get for free.
Oct 15, 2013 6:09PM
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Amazon is the on-line version of Wal-Mart...small and medium size local retail business will keep closing, job's lost forever, all until it's too late to change. If you really want to make a change, screw Amazon and support a local business.
Oct 15, 2013 6:37PM
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Amazon needs to get faster. I have to wait a month to get my holographic sight for my AR15. That's unacceptable since it'd deer season and I need to get my deer.
Oct 15, 2013 5:08PM
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And what's to stop them from sneaking a peak at their competitor's invoices while they're in their distribution centers?  Seems like that must be part of the motivation for starting this venture.
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