Procurement and Supply Chain Management Analysis

The assignment requires analyzing Amazon's 'Fulfilment by Amazon (FBA)' service and its implications on procurement and supply chain management. It involves reviewing the main arguments presented in a public news article and summarizing the claims related to this service. The analysis also includes justifying the supporting arguments for the benefits of FBA to both individuals and businesses, and concluding with an overall summary of the key findings.

Running head: PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
Procurement and Supply Chain Management
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1PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
Table of Contents
Introduction......................................................................................................................................2
Review of the main arguments........................................................................................................2
Summary of the claims....................................................................................................................3
Justification for supporting the arguments......................................................................................4
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

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Introduction
The discourse of the study is aimed at highlighting the Amazon’s “third-party logistics
(3PL) service” paper written by “Charles Pauka. This article was published in “Transport &
Logistics News (http://www.tandlnews.com.au/) on February 27, 2018”. The review of the
discussions is able to identify the benefits of the new strategy implemented by Amazon
associated to “Fulfilment by Amazon (FBA)”. The main aspects of the critical review have
discussed on implementing a differentiated approach in shipping of the items when an order is
placed by the customer (Tranpost & Logistics News, 2018).
Review of the main arguments
The important discussions of the paper can identify the services in form of the 3PL
service “Fulfilment by Amazon” which is available to the Australian suppliers. Through this new
supply chain strategy, the different types of the businesses registered under the “Amazon’s
Australian Marketplace” will be able to gain access to the “Fulfilment by Amazon (FBA)”
services. Based on the statement provided by the company, the businesses will be able to gain a
considerable amount of the benefits in terms of the responsiveness and efficiency to reach the
customers across Australia (Bolton, 2017). As per the main discussions of the study, the
individuals will be able to avail of logistics services such as “packing, and dispatching
themselves, businesses selling via Amazon” instead of warehousing, picking and performing
performing the other operations by themselves. This facility will be available to all the business
personnel’s who wishes to ship their products through FBA to the distribution centre of Amazon
and at the time when the customer places the order. The introduction of the new strategy will be
able to ensure that Amazon will “pick, pack and ship the product on behalf of the business”. This
consideration will be able to save time and business efficiency. This is because the businesses no
longer need to individually purchase the shipping materials. This will be also able to gain access
to the lower freight structure, thereby given Amazon a chance to handle the customer returns
(Tranpost & Logistics News, 2018).

3PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
It needs to be also understood, that the service is not limited to size of the company and
individuals selling out their home will be also able to make use of the service in an appropriate
manner.
In addition to this, as per the statement by “Amit Mahto, head of FBA in Australia”, size
is not the factor for the digital economy and Amazon will be able to help reduce the conflicts
when business growth needs to be taken into consideration. The main attentions have focused on
assisting the Australian businesses of all sizes with technology available at Amazon, and FBA is
an appropriate example for this. It needs to be also understood that the customers shopping on
“amazon.com.au”, will be able to access to an ever growing and unique range of the products
accompanied with the fast delivery and best in class customer service (Turban et al., 2018).
The FBA is able to provide the customers the option for free delivery on the eligible
orders which are more than $ 49. Moreover, the launch of Amazon Prime will be able to provide
additional shipping discounts. It needs to be seen that the business in Australia can pay a
monthly fee of “$49.95 for the right to sell their products on Amazon” (Ishfaq & Raja, 2017). In
addition to this, the commission on sales is taken into consideration with the 6% to 15%.
Amazon is also seen to charge $1.76 up to $25.48 from the third parties for the bulky orders
which weigh up to 30 Kgs for picking and packing of the order. Furthermore, the company
charges $ 7.76 for an order of 3 Kgs (Nardelli, 2016).
Summary of the claims
The main claims in the public news paper is recognized with the facets of the benefits
considered with the customers and businesses in form of the “Fulfilment by Amazon (FBA)”.
Some of the main summary has been able to depict that the main benefits with achieving the
logistics capabilities with more efficiency and timeliness. The company is able to state that
instead of “warehousing, picking, packing, and dispatching themselves” the business has the
scope of the implementation of the several types of the other strategies related to take these
strategies with the help of Amazon (Jalilipour Alishah, Moinzadeh & Zhou, 2015). The overall
discussions of the strategies can focus on the improved supply chain strategies and save time and
money for the business. This is mainly seen with accessing of lower freight charges given by
Amazon. The disclosures given by the company is also able to state that this service is not

4PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
limited to a size of the company. In addition to this, business of all sizes and individuals will be
able to make the best use of this facility (Kawa, 2017).
Justification for supporting the arguments
The justification of supporting the arguments is considered with the stating about the
various types of the benefits of “Fulfilment by Amazon (FBA)” to both individuals and
businesses. Some of the main improvements in the article needs to be done with the presentation
of details related to differentiate the supply chain benefits for customers and individuals
separately. In addition to this, the scope of the discussions needs to also include the various
considerations on how the pricing benefits are differentiated in the bulky orders for third party
and Amazon (Nardelli, 2016).
Conclusion
The important discussions of the article associated to the review of the main arguments
shows the benefits from the new supply chain strategy to the different types of the businesses
registered under the “Amazon’s Australian Marketplace” will be able to gain access to the
“Fulfilment by Amazon (FBA)”. The summary of the claims has shown that instead of
“warehousing, picking, packing, and dispatching themselves” the business has the scope of the
implementation of the several types of the other strategies related to take these strategies with the
help of Amazon.

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References
Amazon launches 3PL service in Oz. (2018). Tranpost & Logistics News. Retrieved 12 March
2018, from https://www.tandlnews.com.au/2018/02/27/article/amazon-launches-3pl-
service-oz/
Bolton, A. (2017). Amazon FBA: 12 Steps To Become Amazon Best Seller And Earn Good
Money With Less Efforts.
Ishfaq, R., & Raja, U. (2017). Evaluation of Order Fulfillment Options in Retail Supply
Chains. Decision Sciences.
Jalilipour Alishah, E., Moinzadeh, K., & Zhou, Y. P. (2015). Inventory Fulfillment Strategies for
an Omni-Channel Retailer.
Kawa, A. (2017). Fulfillment service in e-commerce logistics. LogForum, 13(4).
Nardelli, B. (2016). Amazon FBA: A Comprehensive Guide to Start Selling Private Label
Products on Amazon.
Nardelli, B. (2016). Amazon FBA: A Comprehensive Guide to Start Selling Private Label
Products on Amazon.
Turban, E., Outland, J., King, D., Lee, J. K., Liang, T. P., & Turban, D. C. (2018). Order
Fulfillment Along the Supply Chain in e-Commerce. In Electronic Commerce 2018 (pp.
501-534). Springer, Cham.