Amazon Doesn’t Have Enough Route Density for Its Own Delivery Service
Donald Broughton, Broughton Capital managing partner, discusses the news that Amazon is testing its own delivery service to rival FedEx and UPS.
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FedEx Corp. provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $44 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively,…
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Amazon is testing an expansion of its delivery operations, including overseeing pickup and delivery of items from third-party seller warehouses to customers, possibly taking over some of the functions of long-time shipping partners like the United Parcel Service and FedEx, according to a Bloomberg News report.
Amazon didn’t specifically deny the report but issued a statement to GeekWire in response to questions about the reported plans, saying “We are using the same carrier partners to offer this program that we’ve used for years, including UPS, USPS, and FedEx.”
The program referenced by Amazon is Seller Fulfilled Prime, a service that lets third-party sellers slap the Amazon Prime two-day shipping badge on their products, with the caveat that they must meet Amazon shipping requirements.
The goal of the program Amazon is reportedly experimenting with, which Bloomberg reports began in India two years ago and is being tested in western U.S. states, is to expand the breadth of items available under Amazon Prime. By better utilizing third-party warehouses, the program could also clear up logjams at Amazon’s growing network of fulfillment centers.
Bloomberg reports the name of the program is Seller Flex, and it is another example of Amazon’s push to help third-party sellers speed up their deliveries. It would go along with programs like Seller Fulfilled Prime and Fulfillment by Amazon, which lets third-party sellers send their goods to Amazon warehouses and get them under the Prime rapid delivery umbrella.
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