Tectonic shifts in the complex layers of commerce, marketing, advertising and all forms of online sales are now imminent.
Titans in these worlds are now preparing for an ultimate face off and the ecommerce race is rapidly heating up as we head into the homestretch to own the final mile.
Amazon is the leader and up until today at least have been operating with something of an unfair advantage from something that I like to call The Fulfillment Factor.
There are two facets to The Fulfillment Factor, the first is Distributed Logistics which deploys inventory closer to customers to reduce transportation costs and drive more sales. Amazon has hundreds of warehouses spread across the world to support this phenomena.
The second is the estimated $4 Billion profit Amazon earns annually from Fulfilled By Amazon (FBA) 3PL services they provide to Amazon sellers each year. As you can imagine, having these funds as part of the business model, when your competitors don’t, is a significant advantage.
And thirdly, fulfillment gives Amazon a distinct advantage over both Facebook and Google as it means they can provide their Merchant customers with an end to end service which covers the entire customer journey from advertising/discovery all the way to the product being delivered to the consumers home. And now that Merchants are able to also buy advertising from Amazon, the lack of fulfillment capability at Google and Facebook means they’re now operating at a distinct disadvantage and Amazon’s eating their advertising lunch.
Suffice it to say that at this point Amazon is the leader in ‘back end’ fulfillment benefiting greatly from The Fulfillment Factor while both Google and Facebook are still hard at work innovating on the front end.
Google with their Shopping Actions offering which acts as a consolidated shopping cart across multiple seller websites. The Shopping Actions solution consolidates the front end of the commerce process by providing unified shopping cart functionality across multiple brands and retailers.
Facebook has now rolled out Marketplace which in concert with their access and knowledge to your current and aspirational future material needs makes them another potential formidable ecommerce shopping behemoth.
As mentioned these efforts are focused on the front end, with the only publicly visible activity on the back end delivery side being point to point delivery via Google Express.
From a consumer perspective, what this means is even after Shopping Actions has consolidated the shopping cart across multiple online retailers for shopper, most or likely all of the resulting fulfillment will be made separately on an individual vendor by vendor basis.
The investment required to build a back end fulfillment infrastructure the likes of Amazon’s would cost billions, and so perhaps Google and Facebook have already crossed major Distributed Logistics fulfillment off the list of options and consider The Fulfillment Factor unachievable and outside their respective business models and interests.
If the above is actually the case at either Google, Facebook or both firms, I have to tell you a mistake has been made, there are turnkey solution alternatives for either or both to profit in 2019 from both facets of The Fulfillment Factor.
Even more exciting is the fact that the Distributed Logistics solution needed for them to consolidate the back end fulfillment could also easily be provided by them as a service to their Sellers, all with little or no investment!
And don’t dismay if you don’t work for Google or Facebook as there are still plenty of ways ANY seller can also benefit from The Fulfillment Factor.
Distributed Logistics will immediately improve your Customer Delivery Experience, reduce your Transportation Costs (as well as related carbon emissions) AND at the same time getting closer to your end customers will also drive increased Sales!
So if The Fulfillment Factor is something you’re ready to learn more about, as well as have an actual calculation of your potential benefits completed, just talk to me now and we can plan your network.
Happy Holidays All!
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