Amazon didn't invent the 3rd party warehouse idea. They were just the first 3p marketplace to offer it as an added value service.
For comparison, your average Wal-Mart distribution center has ~100k SKUs and one 'user' (Wal-Mart).
> For comparison, your average Wal-Mart distribution center has ~100k SKUs and one 'user' (Wal-Mart)
You seem to be deliberately comparing apples and oranges here.
You claim Amazon has 42 million Prime-eligible SKU's, and them compare that to how many SKU's exist in an average Walmart warehouse... forgetting that Prime-eligible SKU's don't all reside in Amazon warehouses... a 3rd party seller can warehouse that inventory on their own.
You also don't state how many warehouses Amazon has, nor the average number of SKU's in their warehouses, nor how many warehouses Walmart has, nor account for Walmart stores that serve dual purpose as warehouses. That makes your comparison useless, really.
At a point, it becomes sub-optimal to store more SKU's in a single warehouse, so they open a new distribution center and shuffle products around based on expected demand in the region (closer warehouse to the customer means faster delivery at less expense).
I'm not trying to be rude, but I think you have a misunderstanding of how third-party Prime eligibility works.
Virtually all Prime-eligible SKUs reside in Amazon's warehouse. That's how the FBA program works. There is a very new initiative called Seller-Fulfilled Prime (where the inventory resides in the seller's warehouse), but this is an extremely small percentage of the 42m SKUs.
I work for a distributor and e-commerce retailer... we've been involved heavily with Amazon (both AFN and MFN) for about 7 years... I'm intimately familiar with how Amazon, Prime, FBA, et al work. Of course it's impossible to know everything about what Amazon does... but I am in the trenches, so to speak.
> There is a very new initiative called Seller-Fulfilled Prime
That's not new... it's been around for years. Big retailers have been doing it for a long time, as they already have their own fulfillment network (see my original post regarding companies that do nothing except fulfillment). It was invite only for quite some time... perhaps that's why you thought it's new.
Another thing you're not accounting for, is of the claimed 42 million SKU's in the Prime program... the overwhelming majority do not sell. This became such a problem, Amazon had to start charging for "dead stock" to motivate sellers to remove dead inventory or not send "slow-movers" in the first place.
You also didn't account for Walmart's drop-ship vendor program. Walmart will take an order, and you drop-ship it on their behalf (Walmart being your customer, not the individual making the purchase). Walmart doesn't need to store all the items in their warehouses...
Amazon has a similar program, but instead of you drop-shipping the items, they buy them from you up front and you ship the inventory to Amazon.
All this doesn't say Amazon's warehouse logistics aren't impressive... because they are... but the FBA mechanism is not something special, and it certainly can be replicated fairly easy (and already has been for the most part). What is unique is the fanfare Amazon receives for every new warehouse that's opened... most companies just open new warehouses as business-as-usual sort of things... no articles are written about those things.
I don't think they're suggesting that Walmart will inevitably overtake Amazon in e-commerce any day now.
If it were that easy Walmart would already have it. FBA has been around for a decade. Walmart still doesn't have anything that comes even close to it, despite having an incredible dev team (Walmart Labs) a ton of money AND the distribution network to make it very feasible.