Some of the main distributors to Amazon included Engram Micros and Cell Star 20 Cell Star azon had external distributors for most of books ers. In August 2001, Amazon entered into an agreement with Ingram Micro Inc., the largest wholesale dealer of electronic goods and supply chain management services to provide logistics and order-fulfillment services for desktops, laptops and other computer related accessories at the computer store at n's electronic store. Said Carl Gish, Amazon.com. Ingram Micro was also vice president of electronics at Amazon.com., shares our customer obsession, and they have deep expertise in the highly complex skill of distributing computers and related products. We know they will provide timely and accurate delivery of orders that customers enioy Commented Kevin Murai, president, Ingram Micro U.S, "The and Om. customized fulfillment services we are providing to Amazon.com's computer store will minimize the number of touches to the product, while ensuring a seamless shopping experience for Amazon's customers from start to finish. He added that Ingram Micro had the strategic expertise to maximize operating efficiencies, streamline supply chain logistics and reduce inventory costs "It's faster to ship to customers this way," Amazon spokesman Bill Curry said. "We also don't have to receive it into the warehouse, put it on a shelf, take it off the shelf, put it in a box, and send it to the customer Amazon planned to extend the drop-shipment model to all other categ owever, there was a major disadvantage with this model. If the customers ordered onR helpful the But if a single order had seveTal Items such as a Was e agame stocked by Amazon, then the following procedure was book stocked by adopted: mgram sent the book to Amazon, Amazon added the game and then forwarded the whole box to the customer. This reduced the overall efficiency of the process. Since almost 35 percent of orders placed at Amazon were from different product categories, the drop-shipment model was not very effective. In early 2001 Bezos came up with the idea of including the products of competing retailers and used itema on their website. Amazon earned almost the same profit selling on commission as prices of Amazon's products vis-avis those of other retailers. So not need to advertise its low prices. Said Bezos, "Giving people ice. They are not going to hurt themselves with that for the customers. Give go choice we have tell us that customers who buy used books from us go on to buy more new books than they have ever bought before. They may not want to plunk down $25 for a brand new author theyve never tried. This lets them experiment. By 2003, Amazon handled orders for 19 The largest global wholesale provider of technology products. The company operates in 36 countries and technology solution providers and 1,700 manufacturers. 20 The world's leading global provider of innovative, value-enhancing logistics. It serves customers through a global network of locally based operations in the Asia-Pacific, Latin American, North American and European regions. 21 www.ingrammicro com 22 www.ingrammicro.com 23 www.zdnet.com 24 Fred Vogelstein, "Mighty Amazon Fortune,26 May,2003