alt Hacker NewsThe text in that attached screenshot is the key giveaway, "Now that most sellers maintain inventory levels that keep products close to customers..."
This looks like a signal that Amazon's fulfillment network has reached a saturation point where the 'distributed cache' model of commingling is no longer necessary for speed. Ten years ago, commingling was a necessary optimization. If seller A (county A) and seller B (county B) both sold the same widget, Amazon treated them as a single distributed liquidity pool to guarantee 2-day prime shipping nationwide without forcing every small seller to split their stock across 10 warehouses.
Now that Amazon has moved to a highly regionalized fulfillment model (where they aggressively penalize sellers who don't have stock distributed across regions), the computational and reputational overhead of commingling outweighs the diminishing returns on shipping speed. For all intents and purposes, they have traded the operational complexity of physical sorting for the software complexity of forcing sellers to manage regional inventory better.
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> Ten years ago, commingling was a necessary optimization. If seller A (county A) and seller B (county B) both sold the same widget, Amazon treated them as a single distributed liquidity pool to guarantee 2-day prime shipping nationwide without forcing every small seller to split their stock across 10 warehouses.
I don't see why that required commingling. When I click on a Foo in my Amazon search results show me the Foo from whichever of A or B is close enough to meet the 2-day shipping guarantee. If I care which of A or B it actually comes from I can click the option to see other sellers and decide if giving up 2-day shipping is worth getting my preferred seller.
Or a signal that Amazon has reached the required level of incumbency that it doesn't need to worry about speed any more.
Here in Germany, Prime delivery increased from one day to two days. Makes it also easier.
> They have effectively traded the operational complexity of physical sorting for the software complexity of forcing sellers to manage regional inventory better.
Also total warehouse capacity and warehouse-warehouse freight capacity. +X% inventory duplication (to achieve regional inventory) at Amazon-scale, along a long tail distribution of products, must be non-negligible.
In my recent experience Prime is isn’t two day often enough for Amazon to be concerned about where they ship from.
My recollection (admittedly worked for Amazon >19 years ago) is that there was never any computational overhead to commingling. In fact, the opposite was true: there was a computational overhead to tracking which vendor a specific piece of inventory of a given product came from instead of assuming that all inventory of that product was fungible.
This affected returns as well. For multi-sourced products, we could never guarantee that overstock or damaged items were returned to the original supplier—only that the product matched. Suppliers complained about this a lot.