Amazon is not only a gigantic e-commerce platform, but it also has a gigantic logistics network. Ever since Amazon's breakup with FedEx, it has grown its own logistics network extensively, especially during the pandemic. Today, Amazon has more than 40,000 delivery trucks, 400,000 drivers worldwide, 30,000 cans, and 70 cargo planes. In fact, one of the recent biggest investments is the $1.5 billion Amazon Air hub opened in Kentucky.
According to 2021 stats, Amazon is shipping up to 72% of its own packages, which was just 46.6% back in 2019. In fact, Amazon has even begun fulfilling online orders via other marketplaces.
This raises the important question of how sellers can leverage Amazon Global Logistics service. That's exactly what we will tackle in this article. So, let's uncover everything you should know about Amazon global logistics.
- What is Amazon Global Logistics?
- Pros and Cons of Amazon Global Logistics
- Should You Consider Amazon Global Logistics?
- Steps to Setup Amazon Global Logistics on Seller Central
- Conclusion
What is Amazon Global Logistics?
Amazon Global Logistics (AGL) is a freight service owned and operated by Amazon. It provides a direct and seamless way to import products directly from Chinese suppliers to different Amazon marketplaces. This means that you don't have to deal with third-party logistics service providers to get your products shipped from China to Amazon marketplaces.
Commonly, when sellers import from Asia, they have to deal with service providers to get their inventory moved from one touch point to another until it reaches the Amazon warehouse. However, Amazon Global Logistics minimizes your supply chain touch points, which mostly include third-party freight forwarders and logistics services. This helps reduce the lead time and makes your inventory checked faster.
Amazon sellers can easily sign up for Amazon Global Logistics (AGL) and order shipments from Seller Central. The service is currently available for sellers shipping inventory into the US, EU, UK, and Japan. AGL provides air freight, fast ocean, and standard ocean as its primary services.
Although AGL was launched in 2018, it has been expedited recently due to the pandemic, higher sea freight costs, and prolonged production times due to significant supply chain disruptions.
Pros and Cons of Amazon Global Logistics
Amazon Global Logistics looks exciting and an ideal freight service for Amazon sellers, but it also comes with pros and cons, as follows:
Pros
- Ship directly to Amazon warehouse
- Faster clearance of shipment into stock compared to third-party service provider
- Better tracking of shipment
- Seller Central becomes the one-stop platform for ordering shipments
- Reduced lead time and touchpoints in your supply chain
Cons
- Amazon gets deeper information about your supply chain
- Costly (20-30% more costly than other freight forwarding services)
- Increased dependence on Amazon
- Not useful for products requiring special handling/logistics
Simply put, there are three main benefits of using AGL. First, you can not only ship goods directly to Amazon FBA center but can also ship to an optimal destination warehouse. This means that you can utilize Amazon freight to get shorter shipment routes, especially in peak seasons. Secondly, you get faster clearance of shipment into stock compared to third-party service providers.
Third, you get great convenience with AGL. Everything related to shipment is manageable from Seller Central. This is very handy for new sellers who want convenience or for sellers with sophisticated multiple brands or huge order volumes.
The major downside of AGL is its expensive nature. It can cost 20-30% more than other popular freight forwarding services. However, many sellers have observed improvements in quotes, which has led them to opt for AGL.
Besides that, another major issue with AGL is that Amazon gets a lot of information about your products, suppliers, and supply chain. Amazon has a history of using seller information to compete with third-party sellers on the marketplace. Therefore, many sellers are seen as concerned about the extra amount of information Amazon will get if they choose AGL.
Should You Consider Amazon Global Logistics?
From the above benefits and drawbacks of Amazon Global Logistics, it is evident that AGL is not useful for all sellers. It seems useful for those sellers who have oversized items to ship because AGL can ship them directly to Amazon fulfillment centers.
On the other hand, AGL is not very useful for sellers selling in the grocery category, for products with short shelf lives, or for products that need special handling.
AGL brings convenience, which is what new sellers who have no experience dealing with freight forwarding service providers need. However, sellers that have years of experience and good relations with third-party freight forwarding providers can save significant dollars by avoiding using AGL.
Steps to Setup Amazon Global Logistics on Seller Central
The steps to sign up and make a shipment with AGL are explained in detail in Amazon's onboarding guide. You can go through the guide thoroughly to learn all the steps you have to follow to make your first shipment with AGL.
However, let's quickly brief out the main steps you have to follow:
- Go to Seller Central and create an Amazon Global Logistics profile.
- Complete the onboarding process by specifying the payment method, setting the importer of record (IOR) and customs bonds, and uploading the other documents.
- Once you receive approval of IOR, you can create your first AGL shipment. For that, use the Send/Replenish inventory option and ensure that you select "Yes, I want to ship freight with Amazon".
This way, you can easily set up AGL through Seller Central and start leveraging it for your future shipments.
Conclusion
Ever since the pandemic, the global supply chain hasn't recovered fully. That's why Amazon Global Logistics (AGL) can be a handy choice for you if you want to accelerate the supply chain process and want to stock up and sell your inventory faster. However, there are concerns about AGL, too, as it gives Amazon more access to your products/suppliers. In fact, many consider AGL to be another move by Amazon for global domination.
Overall, using Amazon Global Logistics is your choice. If you believe you can benefit from it, then it's worth trying.
