Amazon Logistics Has Arrived and already fulfills 50% of orders delivered -they are solving the last #eCommerce issue: delivery via @Rakuten_Intel HT @benedictevans

Retailers that try to take Amazon head-on will fail – unless they’re willing to dedicate nearly a decade to invest in their distribution networks while maintaining the volume needed to support those investments. The only link in the chain that Amazon has yet to completely integrate is manufacturing. However, that space could be next on the horizon as it’s already begun to push private label products across many categories.

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WHY IT MATTERS: delivery is the last issues that plagues eCommerce because of high costs and delays. Delivery accounts for 14-15% of Amazon revenues. Reducing it will have a huge impact on profit and customer satisfaction.

I argued in the past that grocery retail is for Amazon the way to address delivery costs. Grocery effectively makes delivery a commodity. Having trucks roam the streets delivering groceries (repetitive, predictable, …), the other order items on the truck can be delivered at marginal cost. 

Farid Mheir