Amazon is a logistics beast - A detailed teardown

Gain asset scale through supply-side integration

This virtuous cycle constantly strengthens Amazon’s logistics play.

Amazon’s approach to logistics is a masterclass in balancing vertical integration vs openness.

Amazon’s logistics play follows a common playbook that we’ve seen in other parts of Amazon’s business:

Leverage data across the ecosystem to constantly improve prediction models

Leverage supply-side scale to open out asset-as-a-service to ecosystem partners

Gain data scale through demand-side integration

The more asset-as-a-service scales, the larger the ecosystem using Amazon’s logistics infrastructure and the greater the data capture for Amazon to constantly improve its prediction models

Amazon’s logistics playbook involves two mutually reinforcing flywheels: an asset infrastructure flywheel (Increase asset base and offer as-a-service) and a data-driven predictions flywheel (Gather data and improve predictions).