Lean supply chains tend to favor scale. In this way, they can take advantage of economies of scale by working with foreign suppliers and then working with logistics companies to move the suppliers’ products to their destination.

The problem with the large-scale view of supply chains is that it often eliminates smaller boutique suppliers, and in the online retail business this can limit the product line. The reason is that smaller boutique supplies are an expensive addition to the product line.

But Amazon just took a different direction.

Amazon has started a fulfillment company that is specifically focused on working with boutique vendors overseas, consolidating shipments from these vendors, and in the process offering products to its buyers that are only available in domestic retail boutiques that charge high prices.

A belt that sells for $ 400 at a boutique clothing store, but is sold in small volume, can now be purchased from a boutique manufacturer in China, consolidated with other boutique purchases, and shipped to Amazon’s distribution centers throughout. the world. The retail cost on your site, $ 125.

Which is the message.

The usual approach to Lean is to maximize efficiency. But this often limits the choice to a few strategic supply chain partners capable of delivering high volume at low cost. If the objective is broadened to also consider revenue, it may be appropriate to incur slightly higher supply chain costs. The higher cost network of the higher revenue supply chain can improve the shopping experience, attract new customers and enhance the brand of online retailers.