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Mammoth containers filled with dehumidifiers in the Pacific Ocean offer a look at how the pandemic and Amazon could change shopping as we know it.
Earlier this year, a company called Aterian was struggling with its homeLabs dehumidifier brand. You may have read about how difficult and expensive it has become move goods around the world, and Aterian felt the pain.
The company was quoted prices of $ 25,000 or more to transport a container of products from factories in China to its buyers in the United States. The shipment itself typically costs around $ 3,000, Aterian chief product officer Michal Chaouat-Fix told me. So Amazon got in touch and offered to install dehumidifiers on chartered cargo ships in the Pacific at a significantly lower rate.
“It was a huge relief,” said Chaouat-Fix. Amazon brought the goods to port, and Aterian made arrangements to transport them from there to its US warehouses. Those dehumidifiers were then available for purchase on Amazon, as well as from Walmart, eBay, and the homeLabs website.
I keep an eye on Amazon, but I didn’t know until Aterian told me that the company leases cargo ships for some of the merchants they sell in its digital mall. by Amazon sea transport service And not new, but it has become more relevant since global shipping went haywire this year. Amazon has also added new options to what the company told me is still a relatively small service available to a few merchants.
Amazon’s adventures on the high seas are an intriguing wrinkle in the war to get products to our door. It is also another example of Amazon’s growing network from stores, package hubs, trucks, airplanes and delivery vans that demonstrate that the company is becoming a force across the entire lifecycle of products from factories to our homes.
Aterian told its investors this week that Amazon’s shipping service has helped it “secure very competitive shipping rates” for products that are expected to generate half the expected sales over the next year. (Aterian’s best known product, the squat potty, is made in the U.S. No cargo ships required.)
Amazon and merchants like Aterian have a shared goal: making sure there are enough products on the virtual shelves to be able to buy. Amazon has the money and the weight to manipulate shipping companies so that its merchants can ship their products at an affordable price.
The shipping service is one of the many options that Amazon offers to millions of merchants, be it a small one Texas toy company or the Chinese anchoring of the electronic conglomerate – who sell products to their buyers. For additional costs, they can store their inventory in Amazon’s warehouses, ship their products through its delivery network, and pays Amazon for major online displays.
Traders often find these options useful, but also a source of frustration sometimes because of the cost and the feeling they get trust so much on a sometimes fickle business partner. Aterian CEO Yaniv Sarig has been pragmatic about the power of Amazon and other huge consumer gateways. “This is a reality of our world,” he told me.
It will be interesting to see what happens with Amazon’s shipping ambitions. It once seemed absurd to imagine that Amazon was in the same league as FedEx as one of America’s largest package shipping companies. And now.
This Amazon logistics machine is rapidly expanding is a superpower for the company, and to understand transportation from Asian factories it’s a logical next step. Sarig and some other keen Amazon watchers said they wondered what the company could do next, like managing their own U.S. commercial port or shipping fleet. (Amazon declined to discuss this speculation with me.)
The coronavirus pandemic and the growls over global products it helped cause will (hopefully!) Be temporary. But this may be a time that will permanently change shopping and shipping.
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Before you go…
The Chinese government silences a shopping party: Singles Day, the annual shopping holiday invented by Chinese e-commerce titan Alibaba, is normally a wild extravaganza of consumerism. My colleague Ray Zhong writes that the government’s crackdown on large Internet companies has forced a quieter singles day aimed at consuming “with care”.
VERY EXCITED for computer chips: Farhad Manjoo, New York Times Opinion columnist, explains why Apple’s self-designed computer chips supercharged its laptops and represent an important step forward in technology.
Government digital payments that don’t stink: Togo, one of the poorest countries in the world, has instituted pandemic-related emergency benefits for its citizens and has been able to make money instantly available to people via their cell phones. Bloomberg News explains how Togo got its digital payments system up and running in less than two weeks. (Subscription may be required.)
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