It’s No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party GMV.

“We already have made these investments, technologies,” Witcher said, speaking from Amazon’s perspective. “How do we create incremental revenue by applying those sunk costs to new opportunities for others to take advantage of those costs where we can benefit in a financial way? This has been part of Amazon’s strategy for quite a while.”

Andy Jassy, Amazon’s CEO, spoke about different SaaS initiatives on a recent earnings call with investors for its fiscal third quarter ended Sept. 30, 2023.

Amazon’s fastest-growing sectors are ads and seller services, said James Risley, research data manager and senior analyst at Digital Commerce 360.

It shows that “while Amazon’s online stores are still growing well, its third-party sellers are the real growth leaders for the company,” Risley said. “Online stores only grew 2.0% in the first half of the year, though, and grew 7.0% in Q3, so the momentum is strong for first-party sales as Amazon potentially shifts its focus ahead of government pressure and a more savvy consumer who prefers direct relationships with sellers.”

Supply Chain by Amazon changes the fulfillment game

Two key Amazon software-as-a-service programs Jassy addressed were Supply Chain by Amazon and a growing generative AI initiative. New Amazon generative AI technology gives merchants the ability to create web pages and product imagery “with nearly endless flexibility,” calling it, along with Supply Chain by Amazon and AWS “the democratization of technology.”

Jassy said the company has seen “very positive early response from sellers to Supply Chain by Amazon.”

Supply Chain by Amazon is a fully automated set of services in which the mass merchant handles:

• Inventory pickup
• Shipping
• Customs clearance
• Ground transportation
• Inventory storage
• Replenishment

Amazon has been making “huge investments” in supply chain for more than a decade, Witcher said. The idea was that Amazon would eventually reach scale and those investments would pay off, he added.

“I think you’re starting to see that now, particularly because they’re starting to outsource delivery as a service,” Witcher said.

Amazon already has the infrastructure in place, so these are sunk costs, he said.

Amazon software as a service (SaaS) can change the game for third-party sellers

“Generative AI developments should be given more weight than Amazon let on,” Witcher said. “Using this innovative technology really gives Amazon the operational efficiencies in inventory planning and route planning that they need to realize the ROI of all these investments they made in supply chain.”

Witcher said AWS was the proof of concept that Amazon can create incremental revenue from its existing services and offerings. He said Fulfilled by Amazon (FBA) “clearly” works for a lot of sellers.

“Now, Amazon’s removing the pain points of being a small-business seller,” Witcher said. “Nobody gets into the retail business saying, ‘I can’t wait to build web pages’ or do photoshoots. That’s not why they get into selling products. They want to sell products. Amazon understands this, and so they’re using this in a way to make it easier for third-party sellers to have that Amazon relationship and make more reasons to say why they should have the Amazon relationship. I think that’s really what this comes right down to.”

Generative AI technology and the Amazon ecosystem

Witcher said Amazon understands that mom-and-pop shops and small companies don’t necessarily have the time or skill set to generate web pages and product imagery.

“The ability to use generative AI just helps those sellers,” Witcher said. “There’s a compounding effect to this, which is: The easier it is for me to build websites, the easier it is for me to upload product pages. Then, it’s easier for me to sell on Amazon. Well, if I’m already selling on Amazon, then it’s easier for me to give Amazon my supply chain, pay for them to do my supply chain, pay for them to have Amazon Pay on my website. It just bakes you deeper into the ecosystem of Amazon as you start to find value in the things Amazon offers.”

He added that this is “certainly a differentiator” for Amazon compared with other marketplaces. However, he said, he expects other retailers to follow suit.

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Bachir Kassir, founder, MyTradeZone.com

“We know that 40% of B2B marketing budgets are spent on trade shows and that over 95% of marketers use social media content in their campaigns,” he says in his promotional material, adding: “So why is there no social network specifically dedicated to B2B trade?”

That’s where MyTradeZone fills the gap in B2B commerce, he adds.

“On MyTradeZone, each business can both market its products/services and source what it needs, all within the same platform,” he says.

Kassir notes that he founded and launched the site quietly several years ago, building a base of about 50,000 users through word-of-mouth.

A toolset with CRM and email marketing

But he recently publicized MyTradeZone’s official launch in a press release and is considering taking on investment partners to spur growth. He adds that he expects the site to begin generating revenue in the first quarter of next year.

MyTradeZone.com provides built-in features ranging from site search, product listings, and online video chats to email marketing and CRM software applications to help buyers and sellers find and build business relationships with particular types of trading partners.

It offers limited access to these features at no charge under its basic membership plan. Premium plans will provide the same features and higher site search rankings for monthly fees from $20 to $50 based on the volume of activity.

In addition, the top premium plan will let participants earn fees from online ads placed on the social network site. MyTradeZone will take a cut of those ad fees.

MyTradeZone.com does not operate as a conventional ecommerce marketplace hosting product and services sales transactions among participating buyers and sellers, who complete those transactions outside the networking site. But it will let users monetize business communities, such as by setting up industry organizations and charging membership fees through the Stripe online payments system. In that case, MyTradeZone will charge a fee based on a percentage of the membership fees.

Kassir says MyTradeZone has been gaining about 100 members daily — a figure he wants to grow to about 1,000.

To get there, he says he’ll continue to invest in “lots of business tools” available to members and offer premium membership deals to trade shows, business networking groups and trade associations. He adds that while he has mostly self-funded MyTradeZone, he may consider outside investors.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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The move is timely. It puts the global software company into a broad market push to help businesses facing supply chain challenges capitalize on AI advantages in procurement and supply chain activities. SAP provides widely used business operations software.

“GenAI is being embraced and adopted at a rapid scale, including in procurement,” says Jeffrey Rajamani, a senior analyst at Forrester Research. He covers procurement and sourcing technology and strategy. “It’s good to see that SAP has joined the bandwagon in bringing GenAI innovations in spend management. Sourcing and procurement functions in organizations are being disrupted, as the C-suite is tasking them with more strategic imperatives.”

SAP announced at its Connect Live event in Vienna, Austria, this week that it will soon make available procurement software applications embedded with GenAI to help procurement professionals.

The new SAP GenAI applications will help to:

• More quickly build comprehensive product categories through SAP Ariba Category Management.
• Improve spend management to identify cost-saving opportunities and more efficient purchasing practices through the SAP Spend Control Tower application.
• Expedite how they assess the risk of dealing with new suppliers through SAP Ariba Sourcing, SAP Ariba Contracts and SAP Ariba Buying software as AI helps to uncover suppliers’ reputations related to product quality and delivery service.
• More quickly identify new suppliers that meet their purchasing requirements related to product specifications and other criteria through SAP Ariba Sourcing. SAP recently integrated Ariba Sourcing with Scoutbee Discovery, an AI-powered supplier search application.

Christian Klein, CEO, SAP SE

Last month, SAP announced its release of Joule, a natural-language, generative AI tool it describes as a GenAI copilot. SAP will embed it into its applications for:

• Supply chains
• Procurement
• Customer experience
• Human resources
• Finance

SAP says Joule is designed for “quickly sorting through and contextualizing data from multiple systems to surface smarter insights.”

Joule has almost 300 million enterprise users around the world working regularly with cloud solutions from SAP, says SAP CEO Christian Klein.

And it “has the power to redefine the way businesses — and the people who power them — work,” Klein says.

SAP has room to grow with AI applications

When it launched Joule, SAP noted how a company might use it to check the cause of a sales decline.

“Imagine, for example, a manufacturer asking Joule for help understanding sales performance better. Joule can identify underperforming regions, link to other data sets to reveal a supply chain issue, and automatically connect to the supply chain system to offer potential fixes for the manufacturer’s review.”

Rajamani says SAP is off to a good start with AI-powered send management, which Forrester refers to as “supplier value management” or SVM. But he suggests it has room to grow with AI.

“While SAP seems to have addressed the supplier discovery, spend analytics, risk management and expense management parts of SVM, there are other areas where I think the demand for AI/GenAI has exploded exponentially: contract life cycle management and procure-to-pay,” he says. “It would be good for SAP to think through these important components, too, such as a GenAI bot to negotiate contracts.” (Procure-to-pay software manages and records commerce activity from the point a buyer begins the procurement process through payment.)

SAP conducted its Connect Live event Oct. 9 to 11. It did not immediately return a request for additional comments about its AI plans.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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It took a significant step in that direction yesterday in announcing several appointments to key positions including vice presidents in ecommerce and omnichannel development, customer and supplier relations, and national retail sales.

“These teams continue to evolve under the National Accounts umbrella, enabling Southern Glazer’s to remain the strategic thought partner to grow these categories and gain market share,” Southern Glazer’s said in statement.

Southern Glazer omnichannel development

Robyne Eldridge, vice president, omnichannel development, Southern Glazer’s Wine & Spirits

Robyne Eldridge is the new vice president for omnichannel development. In addition, she will continue to lead digital B2C operations, development of ecommerce business priorities, and supplier integration.

Included among her duties is leading “B2C deliverables for digital-first eCommerce Business Priorities development,” the company says, adding: “The B2C Omnichannel team creates targeted goals to grow ecommerce sales and share for our suppliers. Digital allows us to support suppliers’ brick-and-mortar program priorities and also amplify support with digital-only opportunities.”

“Robyne oversees a team of B2C omnichannel ecommerce sales directors that work closely with our national accounts teams to find ways to grow sales and share for our suppliers at our most ecommerce enabled national accounts,” a spokeswoman says. “Robyne also oversees a new digital Center of Excellence to provide digital insights in this fast-evolving space and also support the integration of omnichannel capabilities throughout the 100+ person national accounts organization.”

Eldridge joined Southern Glazer’s in December 2019 and most recently served as vice president, B2C ecommerce for national and regional accounts.

Eldridge will report to Chris Williams, executive vice president of national accounts.

Reporting to Eldridge will be:

• Sam Raia, senior director, omnichannel development;
• DarShanna Smith, senior director, Amazon sales;
• Sarah Twitchell, director, liquor channel;
• Brennan Duke, director, mass market, club and drug channels;
• Jennifer Bailein, director, grocery sales.

Customer and trade development

Ryan Saas has been promoted to vice president of customer and trade development for national retail sales and on-premise sales. In his new role, he will drive supplier relations and manage Southern Glazer’s NRS business with support from customer development category experts. Saas will report to Williams.

National retail sales

JR Allen has been promoted to vice president, NRS Commercial Operations. He will work on demand forecasting, inventory and execution.

Nicolle Nottingham has been appointed senior director of GoBrands. She will work on strengthening and fostering national strategy with national retail sales suppliers.

Allen and Nottingham will report to Scott Moore, senior vice president of national accounts off-premise.

Center of Excellence

Adam Byrne has been appointed vice president, customer planning and development for Southern Glazer’s Center of Excellence. His duties will include focusing on the COE’s Elevate program, which recommends branded merchandise to customers. He will report to Williams.

In July, Southern Glazer’s hired ecommerce veteran Alan Wizemann as its chief digital officer. In prior roles, he worked in digital operations for Munchkin Inc., Target.com and Lululemon Athletic.

Southern Glazer’s racked up $3 billion in digital sales last year on its B2B ecommerce platform SGProof.com.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Emily Newton

Integrating a supply chain with a maintenance, repair and operations program requires dedicated effort and critical skills. People who excel in this role must have strong digital capabilities and be open to using various technologies — including emerging ones.

Here are four top skills that will set people in this industry apart from their peers and ensure success in their careers.

1. Artificial Intelligence

Artificial intelligence has rapidly emerged as a notable technology, particularly as people grapple with item shortages and demand fluctuations. However, anyone who currently works with MRO-integrated supply chains or plans to soon should get some AI skills under their belt and progressively work to improve their competencies.

Predictive algorithms help professionals know which supplies to order and when, greatly reducing the chances of stockouts. Executives are also realizing AI is essential to their operations, which suggests they should see it as an in-demand skill when hiring new team members.

A 2023 poll of C-suite members found that 90% were using AI to achieve better operational resilience. Additionally, 88% depended on it for supply chain enhancements. The potential uses span from interacting with a chatbot to place an order to getting predictions from algorithms about when specific products will sell out or start to run low.

2. Data Analytics

Data analytics skills are also proving essential. Professionals in these roles use them to evaluate the sensor data associated with a piece of equipment or estimate when the current stock of a vital component will be depleted. Knowing how to use data analytics platforms is increasingly important as the number of products moving through supply chains rises.

For example, during a single year, the supply chain for technology brand Lenovo included 2,000 suppliers working to deliver more than 130 million devices. An MRO-integrated supply chain specialist might use a data analytics tool to determine the most reliable suppliers according to their performance across several key performance indicators.

Even if someone doesn’t have strong data analytics skills, they can set a goal to gradually improve in that area. Besides making them more of an asset to their employers, this plan could increase job satisfaction by providing a well-defined career path and growth opportunities. Notably, a 2023 survey found that 84% of employees said clear career paths strengthened their commitments to employers.

3. Cloud Computing

Many leading industrial apps run in the cloud. Authorized users can access them from anywhere, making it easy to check statistics, communicate with stakeholders and more. People also use the cloud to store paperwork or streamline its distribution, such as to approve repairs on specific pieces of equipment or keep track of when maintenance occurred.

Another handy thing about cloud computing platforms is they support remote working arrangements. Even if someone doesn’t work from home all the time, it’s increasingly likely they will eventually. One 2023 survey of Americans found they spend 27% of their workdays at home on average.

Cloud computing tools have some similarities, but people must also learn to work with brand-specific features. It’s helpful for those working with MRO-integrated supply chains to dedicate themselves to learning the ins and outs of cloud software. That might mean using built-in help guides or signing up for provider-offered online courses.

People who grow their skills might spend time mentoring peers or encouraging colleagues to embrace the organizational changes that cloud computing products often bring. This enables employees to become crucial parties that show others how these apps can improve their workflows.

4. Project Management

A continuing commitment to digital skill growth will also put MRO supply chain professionals ahead of their peers. Roles increasingly include time spent with various internet-connected tools and platforms, and many suppliers and distributors prefer digital-only transactions.

Digital project management tools simplify tracking what responsibilities people must handle and when. They also enable smoother communication between various stakeholders, allowing people to comment, upload images or documents, and assign subtasks to other parties.

Once people improve their cloud computing skills, they’ll likely find significant similarities associated with using project management tools. That’s because most of them work in the cloud to make it easier for people to get things done in on- and off-site locations.

Commit to Ongoing Growth

These four skills are among the most necessary in today’s fast-paced and digital-centric world. Anyone involved with MRO-integrated supply chains should stay aware of emerging technologies that could become more prominent in their industry.

Some companies are experimenting with augmented reality to support workflows and improve training. Others use mobile robots to carry supplies around distribution centers and other large facilities. People should pay attention to what’s new in their companies and the industry and be ready to capitalize on new learning opportunities. That will help them prepare for whatever’s ahead while setting good examples for others, bringing their company to the forefront.

About the author

Emily Newton is an industrial writer reporting on how technology disrupts industrial sectors. She’s also the editor-in-chief of Revolutionized, covering innovations in industry, construction, and more.

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RoadEx then delivers them to retailers looking to quickly get trendy furniture and merchandise into showrooms and store shelves or to consumers’ doorsteps. RoadEx is a trucking and logistics services company.

Lisa Wan, executive vice president, RoadEx America

“A lot of ecommerce customers are looking for containers delivered more quickly to their warehouses for a faster turnaround. They need to empty them and have cargoes they ship to their stores or direct to consumers,” says Lisa Wan, executive vice president of operations, RoadEx America.

RoadEx has been expediting its container pick-up and delivery service with new web-based software. The software lets it know when its clients’ incoming containers will be available for pick-up at a port terminal. It also uses complementary drayage-management software to route its container-carrying trucks. The software does so in a way that puts them at that terminal at the scheduled pick-up time, Wan says.

The web-based drayOS drayage management system, from PortPro, also lets RoadEx optimize the routing of its container trucks. In addition, drayOS offers an online portal for customers to check the expected delivery time of their containers and access shipping invoices.

Providing the Uber experience in shipping

“Nowadays, our customers are expecting more visibility to the point of comparing it to Uber,” where they can see who their driver is, what vehicle they’re in, and when they’ll arrive, Wan says.

That expectation is likely to only increase as ecommerce accounts for more container shipping, she and others say.

Ecommerce orders of products ranging from electronics and food to cars and chemicals is driving up business at U.S. ports. It’s sparking demand for “port-to-door” transportation-management systems, according to a new report, 2023 State of Drayage.

The U.S. drayage market — transporting goods from container ships to distribution centers, retailers and end customers — is on course to grow. It’ll go from $6.1 billion last year to $8.3 billion by 2027, according to figures the report cites from market research firm Technavio. Globally, the drayage services market will grow from about $25.2 billion last year to more than $28.2 billion in 2027.

Michael Mecca, CEO, PortPro

Michael Mecca, CEO and founder of PortPro, says that as companies source products through global supply chains and ship them to customers, they face the challenge of getting shipment visibility and status and sharing it with their trading partners.

“This lack of visibility leads to costly headaches like containers and equipment being double-handled, and drivers stuck waiting in line at marine terminals,” the report says. “It also causes a whole host of operational inefficiencies that ripple across the enterprise for drayage carriers.”

A spokeswoman says that PortPro produced the report based on information derived from logistics services companies and research firms. PortPro provides transportation-management software for drayage trucking companies.

RoadEx uses PortPro technology to fill a void

Mecca says web-based digital drayage management systems, such as PortPro’s drayOS, help fill a void of shipment visibility between ports and final destinations.

Mecca notes that PortPro is on course to double its revenue this year after tripling last year. He founded it in 2019. PortPro raised $12 million in funding late last year from Avenue Growth Partners. And it’s using the funds to continue developing its software for managing drayage operations.

At RoadEx, Wan says she expects to rely on drayage-management systems even more in the years ahead. She notes that the systems will be crucial to deal with market disruptions. For example, the COVID-19 pandemic caused severe back-ups at port facilities. And with systems that help container carriers expedite deliveries and provide arrival times, retailers and other shippers may forego air freight for less costly if far slower ocean container routes, she adds.

PortPro primarily works with trucking companies in the United States and Canada. But recently, it expanded into Europe, offering its software to drayage firms serving Rotterdam, Netherlands.

“Rotterdam to New Jersey is a really common shipping lane now,” Mecca says. He adds, “We’re working on moving into more continents, more countries.”

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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The company is eyeing new growth by providing its buyers and sellers with national logistics services under an expanding arrangement with Flowspace, a fulfillment software and infrastructure provider with more than 150 fulfillment locations across the United States, including temperature-controlled facilities operated by farm produce supplier Fresh Del Monte.

“With our accelerating growth from coast to coast, we need a partner with the best warehousing capabilities in the most sought-after retail grocery markets in the U.S.,” says Peter Gialanztis, senior vice president of sales and operations for Pod Foods.

Nationwide Sprouts Farmers Market joins the Pod marketplace

Pod’s network of participating grocery retailers includes such names as goPuff, Dom’s Kitchen & Market, Plum Market and, most recently, the national chain Sprouts Farmers Market.

Pod’s digital marketplace, PodFoods.co, connects these and other merchants with emerging brands. Those include:

• SANS meal bars
• Blue Elephant Soup Ready to Eat
• Beanitos Bean Chips
• 505 Southwestern Roasted Green Chile
• Sati CBD Soda
• Altitude Functional Beverages’ Functional Oat Milk Lattes.

Pod started rolling out Flowspace logistics services in 2022 for an initial location in Ocala, Florida. It has since expanded the arrangement with Flowspace to cover facilities in:

• Atlanta
• Denver
• Sacramento
• California

Additional locations are in the works, Gialantzis says.

“The opening of the Denver, Atlanta, and Sacramento warehouses this summer are just the beginning,” he says. “With this flexible capacity, we are able to expand our distribution footprint into key new geographies to keep pace with all of the new brands and retailers joining the Pod Foods supply chain.”

Erik Lucas, an executive of LifeAid Beverage Co., a supplier on Pod’s marketplace,  says it has helped to expedite getting products on grocery store shelves.

“We were able to roll out a nationwide promotion from first conversation to the shelf in less than four weeks,” he says in Pod Foods press release.

Analytics data on sales metrics

Pod Foods also provides retailers and suppliers with analytics based on such data as

• Total number of orders
• Cases sold
• Monthly sales by location

In addition, it offers such services as consolidating deliveries and invoices, processing rush orders, and customer service.

Pod Foods asserts that its business model is designed to provide brands with higher profit margins, as detailed in a sample pricing structure on its website, compared with more traditional distributors.

Pod Foods has raised $18.6 million in funding, according to Crunchbase. Larissa Russell, the CEO, and Fiona Lee, the chief product officer, co-founded it after they launched the Green Pea Cookie baking company in 2014.

“Our story is the story of the brands on our catalog,” Russell and Lee say in a blog on the Pod Foods website. “Like so many, we were faced with a common distribution dilemma. We could self-distribute to a limited set of direct retail accounts, or we could attempt to work with the big traditional distributors that were conceived decades ago. We knew they could easily squeeze us out with their high cost and opaque operations.

“Three years later, we decided to stop making cookies and create a tech-enabled grocery supply chain designed for brands first. We needed Pod Foods, so we created it. In nature, a pod creates an environment for peas to grow and thrive, and that’s what we’re doing for brands small and large, near and far.”

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Carla DeSantis, Operations Transformation Principal, PwC US

Modern technologies are introduced every day, and while executives may believe investing in new offerings is the right choice for supply chain growth and stability, a more complex supply chain presents a greater opportunity for delays, increased risk and added costs. Executives looking to invest in supply chain technologies should do so with a careful and nuanced perspective on strategy and implementation.

Identifying goals & tracking results

The options for technologies to expand supply chain operations grow every day.

From generative AI to robotic process automation, there are numerous innovations executives can adopt and plan to invest further in to enhance their supply chain.

But how effective is investing in the newest technology as it relates to impact?

According to PwC’s 2023 Digital Trends in Supply Chain Survey, only 17% of executives say their company’s investments in supply chain technology have fully delivered the expected results. That’s down from 20% in the previous survey.

Explanations included:

• Needing more time to conduct investment plans (cited by 21% of executives)
• Unclear tracking benefits (7%)
• Undefined ownership and vision (4%)

Streamlined processes and cost savings

Efficient supply chains are critical to meeting customer needs.

Matthew Comte, Operations Transformation Leader, PwC US

As supply chains become more complex, the pressure increases to streamline processes, deliver results, and reduce costs. When asked about their priorities in the next 12-18 months, more than half of surveyed leaders picked increasing efficiency (58%) and reducing costs (54%) as top priorities. Meanwhile, only 23% chose increasing responsiveness and resilience among their top three.

Many leaders may think reducing costs is a separate goal from increasing resilience or efficiency. However, the reality is that simplifying your supply chains and streamlining your processes in the initial stages of investment and adoption will help do exactly that. Data is central to initiating the simplification process.

From metrics to analytics, data is a powerful source. It helps streamline supply chains for faster, high-quality, and more accurate operations. Leaders who enable a data-driven approach to simplifying such operations have a greater opportunity to make informed decisions. They can also better identify risks and enhance workflow, which leads to cost reduction.

As budget spending is no longer overly allocated to the maintenance of unnecessary technologies, addressing errors, or dealing with the aftereffects of disruption can take center stage. Additionally, a data-driven approach allows leaders to analyze and reflect on previous data. This helps identify inefficiencies in their supply chain and anticipate any risks.

Looking ahead with investment and value capture in mind

The past three years have shown that disruption is difficult to predict, yet always around the corner.

When asked about their top objective for supply chain technology investment, 53% of surveyed leaders cited driving growth as a top objective. For leaders prioritizing growth, it is critical that they understand how simplification, risk mitigation and cost savings are connected to growth. If executives continue to adopt and pour money into modern technologies, their supply chains will only grow more complex. In turn, this demands additional attention to avoid disruption, which could impact expected results.

 Adopting and investing in innovative technologies is a piece of the puzzle when it comes to generating growth and reducing costs. These help to support growth but require intentionality during both planning and implementation. A complex supply chain presents a greater opportunity for complications. Those include: potential delays in operations, increased risk of error and added costs.

Successful strategies require leaders to carefully consider what they are hoping to receive from such investments. Whether they wish to reduce costs or create a more resilient supply chain, investing in supply chain technologies at an early stage and simplifying operations can help create higher quality data. That can then support mitigated risk, increased cost-savings, and long-term growth.

Carla DeSantis is operations transformation principal for PwC US. Matt Comte is PwC’s US operations transformation leader. 

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Palouse was operating with a hybrid shipping model, using Fulfillment by Amazon and fulfilling some orders itself. That system couldn’t scale up fast enough to meet demand, Mader says. 

“We needed a solution that would allow us to ship semi loads to a distribution center and then have it go straight from that distribution center. … We could not keep up with order demand and stock them fast enough,” she says.

Then, Palouse’s long-standing relationship with USPS fell apart when the carrier changed package sizes, and Mader knew she needed another solution. 

What is a 4PL?

3PLs, or third-party logistics companies, are logistics providers used by retailers to outsource aspects of fulfillment for their businesses. Fourth-party logistics companies (4PLs) take it one step further, and manage relationships between retailers and 3PLs. 

“Historically, when you think about Fortune 500 companies, major brands, unless you’re one of those folks, you probably have to piecemeal [carriers] together,” Ware2Go CEO Steve Denton says. “What we do is we simplify that [relationship] both on the fulfillment and the logistics side, by connecting with warehouses. We’ve got 36 of them in our network right now. We connect them through one common technology platform,” he says.

Ware2Go is a UPS 4PL company that began working with Palouse Brand in 2022. The “sweet spot” for retailers that work with Ware2Go is between $5 million and $250 million in gross merchandise sales, Denton says. 

The logistics vendor allows clients to upload a year of shipping history and where their warehouses are located, then runs an analysis with recommendations for them, Denton says. The analysis shows information including the average cost and transit time. Ware2Go recommends where the retailer should place another warehouse, for example, to reduce transit time and costs based on average orders. 

Ware2Go has leverage as part of UPS to find lower rates for clients, Denton says.

“So as a UPS company, we got pretty good rates; we’re aggregating hundreds and hundreds of merchants. Typically, we are the largest client with any of these warehouse partners we’ve been working with,” he says. 

That translates to an average savings of 20% to 30% on fulfillment costs, per Denton. Part of the savings comes from what he calls an “Uber model,” where retailers only pay for warehouses and workers when they’re actively using them, rather than owning the warehouse themselves.

Palouse shaved 20% off its fulfillment costs

Palouse was up and running with the 4PL just two weeks after starting the process, Mader says. 

The retailer discontinued its use of Fulfillment by Amazon, and switched to the Seller Fulfilled Prime model, operated by Ware2Go. 

“For us, protecting our Prime badge is key,” Mader says of the distinction placed on some Amazon products denoting that they come with free one- or two-day shipping to Prime Members. Palouse kept its Prime badge with Ware2Go, and offered free two-day delivery to orders made from PalouseBrand.com, too.

Ware2Go also set Palouse up with five warehouses across its sales area. The vendor has a 48-hour service-level agreement (SLA) with Palouse, Mader says, meaning that products are available for sale online within 48 hours of arrival at the warehouse. That’s a major change up to 90 days faster than at other warehouses Palouse used in the past, she says.

“There’s a huge lag from when it leaves your building to when the shipments close,” Mader says. Every additional day of transit and processing time costs Palouse more money. Ware2Go has changed Palouse’s whole business, Mader says, because “we aren’t having such huge inventory carrying costs because we can turn it so much faster.”

15 months after implementation, Ware2Go cut Palouse’s fulfillment costs by 20%, Mader says. Time in transit is down 40%, and 98% of customers are within a two-day shipping radius. 

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Shein and Temu, owned by PDD Holdings Inc., are two of the rising powers in online retail. They are growing threats to the likes of H&M and Zara. The lawsuit offers a rare glimpse into the business models of the two secretive companies — and their fierce competitive practices.

Shein Group Ltd. ranks No. 2 in the Asia Database. That’s Digital Commerce 360’s rankings of the largest online retailers in Asia by web sales.

Pinduoduo offers an app-only marketplace to Chinese consumers but does not operate an ecommerce website, so it is not included in Digital Commerce 360’s Asia Database rankings. Temu, which launched in September 2022, did not have a significant impact on Pinduoduo that year. Moreover, it didn’t have a high enough gross merchandise value (GMV) to make the global online marketplace rankings this year.

Temu and Shein are growing rapidly in US market

Shein has grabbed more than 75% of the U.S. “ultra fast-fashion” market since entering the market in 2017, according to the suit. After Temu entered the U.S. in 2022, Shein responded by forcing clothing manufacturers into supply arrangements that excluded Temu, the suit alleged.

“Shein has engaged in a campaign of threats, intimidation, false assertions of infringement, and attempts to impose baseless punitive fines and has forced exclusive dealing arrangements on clothing manufacturers,” according to Temu’s complaint filed July 14 with the U.S. District Court for the District of Massachusetts.

The allegations come after Shein sued Temu in the U.S. Shein alleged trademark and copyright infringement as well as “false and deceptive business practices.”

Shein led the way in pioneering ultra fast-fashion. It offered consumers the latest fashion products at bargain prices, with shirts and swimsuits as low as $2. That helped the company become one of the most successful startups in the world, with a valuation of $66 billion, according to the market research firm CB Insights.

“We believe this lawsuit is without merit and we will vigorously defend ourselves,” a Shein spokesperson said in an email statement.

Allegations in Temu Shein lawsuit

Temu alleged that Shein engages in at least four strategies to stifle competition. Those include levying fines and penalties on suppliers that work with Temu and forcing suppliers to sign “loyalty oaths.” Shein also issues “public penalty notices and imposes extrajudicial fines on disobedient manufacturers for supplying product to Temu.”

Temu alleged in the suit that, as of May, “Shein has required all of the approximately 8,338 manufacturers supplying or selling on the Shein Platform to execute Exclusive-Dealing Agreements, which prevent those manufacturers from offering products on the Temu Platform or supplying products to sellers on the Temu Platform.”

The 8,000-plus manufacturers that supply Shein represent 70% to 80% of the total number of merchants capable of supplying ultra-fast fashion, Temu said.

Temu said merchants have pulled more than 10,000 listings as a result of Shein’s actions. In the lawsuit, the PDD unit cited examples of clothing manufacturers that had cut their presence or stopped business on the platform, “to appease” Shein.

“Shein knows that manufacturers need Shein’s volume and its access to the U.S. market and it is, therefore, able to coerce manufacturers into arrangements that force manufacturers not to do business with Temu,” the company alleged.

The case is Whaleco Inc. v. Shein US Services LLC, D. Mass., No. 23-cv-11596, 7/14/23

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