Amazon Taps Merchants for Warehouse Space to Expand Inventory

Warehouse capacity issues and the cost of new facilities helped increase Amazon’s order fulfillment spending 34 percent.

Bloomberg
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Amazon.com Inc. is turning to merchants who sell on its marketplace for extra warehouse space, a less-costly way to expand inventory available for quick delivery.

Inventory available for delivery within two business days expanded by 6 million items under the Seller Fulfilled Prime program, the company announced. Amazon earlier this year introduced the program, which lets independent merchants sell goods on Amazon as Prime Eligible even if Amazon isn’t handling packaging and delivery.

It’s the latest sign the world’s biggest online retailer can’t build facilities quickly enough to meet demand for an ever-expanding assortment of goods that customers want delivered fast and free. Warehouse capacity issues and the cost of new facilities helped increase Amazon’s spending on order fulfillment 34 percent in the third quarter. The big expenses caused the Seattle-based company to miss analysts’ profit projections, driving down shares 8.8 percent since the results were reported Oct. 27.

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