In a bid to wring more profit from its muscular global fulfillment network, Amazon.com Inc. will rent out space in its distribution centers to startup companies through a program called Amazon Launchpad, the company said Tuesday.
Companies that sign on to the program will get custom product pages, a marketing package, and access to the giant retailer's fulfillment network, which operates in 26 states. Together, those services could help startups to launch, market, and distribute their products to hundreds of millions of customers across the globe, the Seattle-based company said.
"Amazon Launchpad gives customers access to a dedicated storefront featuring a variety of innovative new products from emerging brands," Amazon vice president Jim Adkins said in a statement.
"For startups, we handle inventory management, order fulfillment, customer service, and more, allowing them to focus their efforts on the innovation that results in more cool products," Adkins said.
By selling space in its vaunted fulfillment operation, the company is following a similar pattern to Amazon Web Services (AWS), the division it launched to rent space on the Internet retailer's vast cloud-computing platform. That division has attracted business from public-sector clients such as the U.S. Department of Agriculture and the University of California at Berkeley, startup companies such as Airbnb Inc. and Spotify AB, and major corporations such as Hess Corp. and Novartis International AG.
Amazon has also been expanding its physical-distribution operations and adding distribution centers in a bid to maintain its lead over e-commerce rivals like Wal-Mart Stores Inc. and eBay Inc. By adding product volume to its logistics channels, the company could gain efficiencies by operating the growing facilities at full scale—and open a new revenue stream at the same time.
The Amazon Launchpad site currently features a limited array of products sorted into the categories of body, food, gadgets, and house, all promoted with the logo, "we curate the cutting-edge so you can discover unexpected and fresh new products from today's brightest startups."
In a nod to the Internet startup culture and crowdfunding techniques, the site also has a dedicated page for selling products supported by the global fundraising site Indiegogo.com. Amazon is soliciting additional clients for the Launchpad program by collaborating with venture-capital firms, startup accelerators, and other crowdfunding platforms.