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Bricks and Mortar 2.0: Amazon Fulfillment is a RW Platform and API

Amazon, reports the NYT, is blurring a lot of boundaries. With the “Fulfillment By Amazon” Business Solution, Amazon is creating a real-world platform with a physical set of API’s - taking the strategy of developing, surfacing, sharing, and selling back-end services that has worked so well online, and porting into the physical world. Fulfillment lets any merchant selling anything online anywhere tap Amazon’s warehouse infrastructure for storage, packing, and shipping.

Fulfillment by Amazon (FBA) is a new program that makes delivering your Pro Merchant Program and WebStore orders a snap. You send your new and used products to us, and we’ll store them. As orders are placed, we’ll pick, pack and ship them to your customers from our network of fulfillment centers. [from FBA]

And why not? Amazon recognized long ago that the systems and processes they use to make their online store work could be extended beyond the store via API users to drive business back to Amazon, create brand equity, create a revenue stream, reduce per transaction costs, and make everyone’s lives easier. The offline world is no different - except that the packets are in brown cardboard boxes instead of TCP/IP, and flow through warehouses and post-offices, not routers and gateways.

“We have this beautiful, elegant, high-I.Q. part of our business that we have been working hard on for many years,” he said. “We’ve gotten good at it. Why not make money off it another way?” [from NYT]

Amazon Fulfillment works in four steps:

1. Send your inventory to Amazon
2. Amazon warehouses it
3. Amazon fulfills it - finding it, packing it, combining it with other items, and shipping it
4. Amazon manages customer service (returns)

…and that is just spectacular. Its like the equivalent of Ning for bricks and mortar commerce. It makes it easy for merchants, creates a new monetization stream for Amazon, keeps Amazon’s resource utilization and per transaction costs down, and largely is built on sunk investment. Of course, fulfillment is not new to Amazon, as they’ve done it for Target, Borders, Toys R Us, and others. But extending it out to anyone in Web 2.0 style is.

At the end of the day, Amazon is leading the way in what I consider to be “3.0″ processes and technologies - things that consolidate the physical and online worlds and make moving between the two seamless. There will no doubt be bumps along the road (as the NYT article notes), but ultimately Amazon has seen the future and positioned itself to be the platform on which its built.

amazon, api, ebay fulfillment

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