12 Feb Amazon package-delivery service to compete with FedEx and UPS #SWA #eCommerce #disruption #RetailApocalypse
Amazon will launch a package-delivery service called Shipping with Amazon, or SWA, The Wall Street Journal reported. The service is designed to compete directly with UPS and FedEx. SWA is expected to roll out in Los Angeles over the next few weeks, then spread to other cities in the US during the year. Sourced through Scoop.it from: uk.businessinsider.com
WHY IT MATTERS: this is not a surprise as delivery fees are close to 15% of Amazon costs. I wrote about this in the past numerous times and it looks like Amazon is moving in the direction of competing with large delivery providers. Again, Amazon only needs to break even on delivery costs, it does not need to make a profit. Moreover, going into grocery eCommerce can provide additional volume and predictable routes (think milkmen routes) to put trucks on the roads, pay for their fixed costs, and effectively make delivery “free” for all other product categories. When self-driving cars -or more likely autonomous vehicles – become a reality, Amazon will be there to reap the benefits. Another attack of established retail and distribution industry that Amazon is famous for.
- Amazon says it won’t compete with FedEx-UPS interview (june 2016):
- Amazon vs UPS and Fedex (2016 but still relevant):
- Oct 2015 article on BI raises the possibility that Amazon starting parcel delivery solution: