When we go shopping, we do the picking function, shipping function, and outbound transportation for the retailer. Think about online order fulfillment costs. Considering the scale of Amazon, market distribution channel trends, the cost of picking and shipping individual small items, the echo, drones, robots, etc., will online fulfillment centers continue to expand? Will they replace all or most stores in the future?
It just doesn't seem efficient to have small items delivered to our doorstep. The "last mile" of delivery is generally considered to be expensive. Consider the costs of retail store supply chains and online fulfillment centers. What are the key costs for each, and how do the two channels stack up in the long term? Of course, Walmart, Target, and Macy's have online fulfillment channels too, so this discussion should not be limited just to Amazon.
Post your initial thoughts and respond with quality to at least two other posts. Although the numbers are not known and hard to estimate, consider and compare the relative cost of the supply chain components of the supply chains. Also consider that as volumes increase there may be further economies of scale or diseconomies of scale. Our first considerations may be the cost of transportation and warehouse and retail operating costs, but don't forget the costs of reverse logistics and the costs associated with the inventory investment - inventory carrying costs.
The purpose of this discussion is to consider the relative importance of the different supply chain costs and to consider the comparison of costs for competing supply chains. The costs are changing so rapidly, that intuition may be the best way to consider these questions in the long term.
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