Marketplace Briefing: Why Amazon is extending its logistics muscle to competitors like Shein and Walmart
This is the latest installment of the Marketplace Briefing, a weekly Modern Retail+ column about the ever-changing e-commerce marketplace landscape. More from the series →
At Amazon’s annual Accelerate conference in Seattle on Tuesday, Sept. 16, thousands of sellers filled the convention hall for the company’s annual showcase. In a rare appearance, CEO Andy Jassy took the main stage for a half-hour fireside chat — his first time at the event since 2021, when it was still held virtually. Jassy used the session to look back on Amazon’s choice two decades ago to open its website to outside merchants — a move that, at the time, divided company leaders. In the end, he said, “You can’t really fight gravity.”
The same gravitational pull now appears to be guiding Amazon’s logistics strategy. On Thursday, at the Accelerate seller conference, Amazon announced that its third-party logistics service, Multi-Channel Fulfillment, will expand to handle orders for Walmart, Shein and Shopify — companies that are, on paper, among Amazon’s most formidable competitors, as they all compete for the same merchants. Overall, millions of merchants sell on Amazon, accounting for more than 60% of its retail sales and $156 billion in commissions and fulfillment revenue in 2024.
Walmart, Shein and Shopify already command huge and growing customer bases, and merchants increasingly want to sell across them rather than tie themselves to a single marketplace. For Amazon, refusing to serve those channels risks losing merchants to competitors. It’s better to supply the infrastructure and keep collecting fees, even if some sales shift elsewhere.
The new integrations mean sellers can use the same inventory they store with Amazon’s Fulfillment by Amazon program to ship products sold on rival platforms. A Shein merchant, for example, will soon be able to download an app that routes orders through Amazon’s warehouses. Shopify merchants can now plug Amazon’s third-party logistics service directly into the Shopify Fulfillment Network, while Walmart Marketplace sellers can also tap into Amazon’s logistics backbone.
Peter Larsen, vp of Amazon Multi-Channel Fulfillment and Buy With Prime, acknowledged that the partnerships may look unusual at first glance.
“Maybe it’s a little counterintuitive to hear us talking about these other marketplaces right next to Amazon.com, which is fair,” he said. “But it’s a brave new world out there. We think it’s possible to compete against each other from a marketplace perspective, but to work with each other from an enabling sellers perspective.”
Larsen framed the expansion as a response to merchant demand. “If we’re going to store our inventory in the Amazon network to use for our Amazon orders, we want to use that same pool of inventory to fulfill our off-Amazon orders,” he said.
That doesn’t mean the partnerships are without risk. By helping competitors improve their fulfillment, Amazon could cede some retail sales. But Neil Saunders, managing director at GlobalData Retail, said the overlap is limited.
“The appeal of Amazon and Shein is actually very different,” Saunders said. “Yes, this may help Shein to some degree, but it doesn’t necessarily replace Amazon. Shein is going to be there anyway, so it’s better for Amazon if they’re in the room. They get a piece of that pie.”
Indeed, a material share of Amazon customers also shop at rivals like Walmart and Shein, according to Consumer Intelligence Research Partners, a market research firm. According to a survey of Amazon customers conducted by CIRP in November 2024, around 93% of Amazon users have also shopped at Walmart, while 22% have shopped at Shein. For customers under 35, 53% also shop at Shein.
On the merchant side, Walmart has been beefing up its marketplace strategy as a serious competitor to Amazon. Walmart Marketplace now hosts over 200,000 active sellers, with some 44,000 new merchants joining in the first five months of 2025 alone — that’s nearly matching all of 2024’s growth in just a third of the time, per Marketplace Pulse. Walmart now lists more than 420 million products online — as many as 95% of them come from third-party sellers, according to Marketplace Pulse. Brands are also increasingly branching out beyond Amazon, and one of the fastest-growing platforms is Walmart Marketplace, Modern Retail previously reported.
Amazon’s latest approach marks a departure from how it previously tried to compete head-on with these rivals. In January 2024, Amazon lowered the referral fees it charges merchants on low-cost apparel, a move designed to lure more fashion sellers and chip away at Shein’s dominance in budget clothing. Last year, Amazon also launched Haul, a Temu-like discount storefront now rolling out in international markets. Those initiatives sought to outflank competitors on their own turf. By contrast, Amazon’s logistics expansion suggests Amazon is increasingly willing to profit from their growth rather than fight it outright.
At the same time, Amazon has steadily reframed itself as a logistics company as much as a retailer. Amazon’s third-party logistics service already supports sellers on eBay, Etsy, Temu and TikTok Shop. Larsen said merchants who consolidate inventory with Amazon typically see a 19% boost in sales and a 12% improvement in turnover rates. “It’s really not about where the sale happens anymore for Amazon,” he said. “It’s more about making sure that we enable merchants to succeed in whatever channels they happen to be operating in.”
Amazon said the service is gaining momentum. So far this year, the number of large online retailers using Amazon’s third-party logistics service has grown 40% compared to 2024, with brands like Adidas, Laura Mercier, Dexcom, Steve Madden and Bloom Nutrition among the additions. The network is also getting faster, with 25% more items delivered the same day or next day. And the selection of products fulfilled through Multi-Channel Fulfillment has expanded by roughly 750,000 items over the past year.
In effect, Amazon is betting that even if merchants sell more on other sites, they will still pay Amazon to store, pack and ship those goods. It’s a strategy that mirrors Amazon Web Services, the company’s cloud-computing unit, where the focus is on controlling the infrastructure, even if the applications that sit on top belong to rivals.
The company has been exploring other ways of keeping a hand in transactions outside its own marketplace. Its Buy with Prime program, for example, extends Prime’s checkout and delivery benefits to merchants’ own websites, helping Amazon capture more off-Amazon sales. Earlier this year, Amazon began testing a “buy for me” feature that lets shoppers purchase items from external websites without leaving the Amazon app. And Amazon also partnered with social media sites including TikTok and Pinterest to enable users to buy items from Amazon via shoppable ads on those platforms.
For Walmart, Shein and Shopify, the calculus is equally pragmatic. Building out world-class fulfillment networks is capital-intensive and time-consuming. “Why would you, as Walmart, reinvent the wheel when it exists already? You might as well just piggyback onto something that exists,” Saunders said.
The partnerships also offer strategic cover for companies like Shein, which have been squeezed by U.S. trade policy. Since President Donald Trump halted the so-called “de minimis” exemption allowing low-cost packages to enter the U.S. duty-free, Shein has seen a drop in sales, as well as a pullback in spending on advertising. Modern Retail previously reported that Shein has had to raise prices. While Shein has raced to build U.S. warehouses and shift more fulfillment stateside, tapping Amazon’s vast logistics network could help the fast-fashion giant insulate itself from those headwinds, ensuring faster delivery to American customers while mitigating the cost shocks of cross-border shipping.
Still, guardrails remain. Walmart, for instance, does not want Amazon-branded vans showing up at customers’ doors. Instead, packages fulfilled through Amazon Multi-Channel Fulfillment are delivered in unbranded boxes, often routed through third-party carriers, according to Walmart’s shipping & fulfillment policy.
All told, from Amazon’s vantage point, enabling rivals’ sales is better than being cut out entirely. As Larsen put it, “Whatever channels the merchants are using — if we’re a supply chain provider, which is what we increasingly are — we’ve got to be where they want to be.”
What I’m reading
- Retailers including Target and Best Buy are once again hosting parallel sales in October to compete with Amazon’s Prime Big Deal Days event.
- The newest addition to Amazon’s Essentials private label assortment is a collection of denim pieces aimed at Gen Z consumers, according to RetailWire.
- The U.S. and China have struck a framework deal to spin off TikTok’s U.S. business into a new American-controlled company, owned by investors like Oracle and Andreessen Horowitz, per The Wall Street Journal.