Shipping handled directly by Amazon might spell the end for FedEx, UPS, and others.
Last week Amazon announced that it will experiment with a new delivery service to expand offerings of free two-day shipping. This will have a huge impact in the coming future.
Amazon will oversee the process of picking up packages from warehouses and shipping them to customers. This will directly compete with the current major package delivery services of UPS, FedEx, and the post office. They started this concept about two years ago in India and saw success. So they are now trying it out in the United States. Check out the full article here.
Just the beginning
Mark my words. This is only the beginning. Amazon will start with the major urban centers in the United States with this new delivery service, but soon will roll it out to as many locations as possible. The main concern is control. Amazon is probably tired of promising delivery by a certain date, only to have their word thwarted by late deliveries and mis-deliveries by third party shipping companies. If Amazon controlled the whole user experience from ordering to fulfillment to delivery, then they can instill confidence in customers and have no one to blame, but their own processes. This is very enticing for Amazon.
The end result
The overall effect of removing millions of Amazon packages from the shipping stream will adversely effect the bottom line of UPS, FedEx, and the post office. It will take a few years for Amazon to perfect its new system, but as we have seen in other areas (online shopping, eBooks, smart speakers, etc.) the company is determined to conquer the competition. The downside for shipping companies is the loss of revenue and possibly market share if Amazon starts shipping products not specifically purchased on Amazon. For consumers it means, faster and more reliable delivery of products. Only time will tell if this new venture pays off for Amazon, but it is certainly an interesting concept to think about.
Ethan Hausmann is currently the Vice President of Marketing and Community Outreach for Successtar Enterprises LLC. He is an author, professional speaker, and seminar/workshop instructor. Ethan has extensive knowledge and experience in marketing, customer service, leadership, and other small business related concerns.