Unformatted text preview: OM517: Case Paper #2 – Amazon.com Amazon.com started with only one, small DC in Seattle, where small inventory of best-selling books were stocked and customer orders purchased from a few wholesalers were picked, packed, and shipped to the customers via the US Postal Service or UPS. As the volume increased, Amazon initiated direct purchasing from publishers and added new DCs across the nation to increase its order-fulfillment capacity and be closer to the key markets and suppliers. Amazon expanded its product lines, including music, video, DVD, and toys—a mix of which was carried in each DC to handle multi-item orders. Wholesalers were now mostly used for slow-moving, low demand items or as a safety net. To reduce inventory costs, in 2001, Amazon started drop-shipping from wholesalers, who shipped the products directly to the customer, mostly for high-price or hard-to-handle items. In later years as it launched the marketplace activities and partnership with other companies, Amazon diversified its SC model and further delegated order-fulfillment and...
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- Spring '09