(Last Updated On: January 5, 2020)
Amazon Set to Launch Its Own Delivery Service
Amazon.com is an American electronic commerce based in Seattle, Washington. It is the world’s largest online retailer and a prominent cloud services provider. It has dozens of locations around the world.
Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking
They are preparing its own delivery service that would compete directly with services like FedEx and UPS. The service is likely to expand to other cities as well.
“Shipping with Amazon,” as the service is called, will pick up packages from businesses, initially the company’s third-party sellers, and deliver them to customers. The service can expand to other businesses, putting Amazon in direct competition with delivery companies.
Amazon delivers its items timely from its own warehouse. But when a customer orders from a third party, their Prime membership is fairly useless. So when Amazon handle its delivery then it can speed up its business. Customer will also get their items on time.
Amazon currently records big losses on shipping. Last year, the company spent as much as $20 billion ensuring its products made it to customers. By taking some (or all) of that in-house, Amazon could conceivably better control those costs, especially if drone delivery becomes as widespread as the company hopes it will.
Neil Saunders, managing director of GlobalData Retail said,” An Amazon entry would “send shivers down the spines of the traditional delivery companies”
The delivery companies are likely to lose business from Amazon. And if Amazon starts delivering to businesses, it may undercut the incumbents on rates. Analysts estimate that UPS gets up to 6 percent of revenue from Amazon deliveries compared to about 3 percent for FedEx.
Amazon is trying this trend to create faster, lower-cost delivery choices.