Amazon supply chain

Amazon business model and supply chain

The business model of Amazon has nine building blocks.

The first comprises of customer segments that defines what customers the stuff is being sold to.

Revenue streams that determine where the revenue would come from?

Third is encompasses of cost structure that finances the components of retail chain,

forth component is cost structure that determines what to be spent and where?

Fifth component is customer relationships that build on dealing with long term satisfaction and customer retention.

Sixth component is Key partnership that enhances the importance of key partners in the supply chain.

Seventh is Channel management that considers proper delivery of products through each channel

eighth is the key activities component that explains what activities play the fundamental role in business model

Ninth is Value proposition fulfillment that emphasizes the fulfillment of Amazon positioning strategy? The business model makes their supply chain integrated (Anon, 2005).

Challenges to Amazon supply chain

Challenges Amazon face in their supply chain are as under;

Demand supply match: as the growth of e-shopping and the development of e-commerce have made Amazon a rapidly busy supply chain owner, therefore, it is not able to cover the globe and has a limited supply chain only in the first world countries

Dependence on vendor: it is totally contrary to the traditional supply chain models which rested on direct production to delivery method. The supply chain is directly dependent on the vendor, that is, inventory is received in the procurement and processed through Amazon centers. Therefore if the seller is short of the ordered quantity, he has to notify Amazon in the earliest hour (Anon, 2005).

Expanded network: since the dot-com boom is growing every going day. The Amazon supply chain needs expansion to reach the second world and due to not reaching that zone it is losing ...