7, December 2017
How Amazon is Changing American Manufacturing
It's no secret that Amazon is changing the way American manufacturing works. But
there's more to the issue than just the idea that retail is different. People are buying things online much more today, instead of shopping local. That's changing whether some companies can stay in business, and is a problem especially for smaller stores and shops that cannot compete with Amazon's prices or selection. Looking beyond that, though, to manufacturing, means considering much more than just the retail sector. Here are three important issues to consider when it comes to how How the "Amazon Effect" is Changing the American Manufacturing Industry Forever.
Orders Have to be Produced and Shipped Faster
There is less room for companies that manufacture goods to take five or 10 days to get
those goods produced and shipped out to people who have requested them. Instead, these goods must often be produced quickly and in large quantities, so they are ready to go whenever they are ordered. Then they have to be shipped right away. Getting orders in one to three days is much more expected than it was in the past. For manufacturing
companies that cannot do this, there is little room to compete. They must be able to
provide what customers need, when they need it. When they fail to do this, people stop
buying from them.
Amazon succeeds, in part, because they get orders to people quickly. The sellers and
manufacturers who work with Amazon are focused on being sure items go out fast. They
are dedicated to meeting customer needs and expectations. When sellers fail to do this, or when manufacturers struggle to provide products in a timely manner, they end up not
working with Amazon. They receive poor ratings from customers, too, and that affects
how successful they are in working on the Amazon platform. That puts more pressure on
manufacturers, to keep them focused on producing and shipping as fast as possible.
Products Are Being Sold All Over the World Today
Because manufacturers now have the option to ship things to sellers all over the world,
they are often asked to provide more goods than they used to. They also need to send
these goods out faster than in the past, to meet seller and consumer demand—and this
may factor into the decision to buy or rent space for these companies due to how quickly
needs change. If they fail to get these products out quickly enough, they will be passed
over the next time. Instead, a different manufacturer will be used because they may be
able to provide what the seller and, therefore, the customer, is asking for. Shipping to faraway places costs money, and it takes time. Manufacturers who anticipate that and plan accordingly are seeing a higher level of success in the Amazon era than manufacturers that failed to prepare themselves for this eventuality.
Smaller Manufacturers are Trying to Keep Up
One of the biggest challenges for American manufacturing as Amazon continues to
expand is the way in which smaller manufacturers are being pushed out of the
marketplace. Trying to compete with much larger manufacturers is becoming far less
realistic, because smaller manufacturers struggle to produce goods as quickly. They also
cannot produce as large of quantities as their larger counterparts, so they may have
trouble fulfilling orders if sellers or consumers suddenly request a lot of whatever they
are creating. While it is good to be asked for a large number of goods, if they cannot meet expectations for the order it may be that they will not be asked to produce goods again. They receive fewer orders, and that hurts their bottom line. In the Amazon era, many manufacturers that cannot adjust and keep up will simply be left behind.