Amazon Expands Delivery Trial That Could Hurt FedEx, UPS
Amazon.com is is expanding a service launched to make more groceries, cleaning supplies and other products available for quick delivery directly from merchants without overwhelming the e-commerce giant’s warehouses with additional inventory, according to documents reviewed by Bloomberg. The trial pushes Amazon’s logistical reach beyond its own facilities and into those of its merchants, encroaching on services of long-time delivery partners United Parcel Service Inc. and FedEx Corp. Amazon is enticing sellers who use the company’s online marketplace with lower delivery costs, logistics software, warehouse inspections and recommendations.
Total Retail's Take: Already recognized as the industry leader for its logistics expertise, Amazon is looking to extend that reach to its many merchant sellers while at the same time decreasing costs from having to pay UPS and FedEx to handle deliveries from its warehouses to customers’ homes. In essence, Amazon is cutting off the middleman — in this case, UPS and FedEx — by picking up packages directly from its third-party merchants. In addition to saving Amazon, the online retailer is selling this to its merchants as a way for them to save on delivery costs as well. This latest announcement is yet another step to Amazon becoming its own full-fledged logistics and delivery company, a thought that must keep execs from UPS and FedEx up at night.