Amazon is building a full-fledged delivery service for businesses that could rival UPS and FedEx. The company plans to roll out its “Shipping with Amazon” service in Los Angeles over the next few weeks, with further expansion planned this year.
The company will send Amazon’s drivers to pick up shipments from a company’s office or warehouse and then deliver them to customers or clients, according to a report from The Wall Street Journal. What this means for customers will depend on where you live. This, for the most part, concerns third-party businesses, so it likely won’t affect your Prime delivery options. But, in specific areas it’s possible Amazon would be delivering your packages whether you ordered through its marketplace or not.
Amazon currently spends north of $21 billion a year on shipping, a number likely to decrease as in-house options increase. Cutting out the middle men and passing the savings on to customers sounds like a win-win, but it’s more like a win-win-lose.
Businesses whose products aren’t sold through Amazon likely won’t see as much benefit as those whose are, which just serves to make Amazon’s shadow even larger.
And of course there’s the threat to UPS and FedEx. Currently, both companies are playing it cool. According to The Wall Street Journal FedEx isn’t worried about losing Amazon’s business — or business to Amazon — and it’s confident the decades it spent building a global shipping network will keep it in the delivery game.
But Amazon has a habit of using money to speed up the development process like some sort of real world microtransaction to skip the wait time for building new units.
Just ask Waldenbooks, a company founded in 1933. It existed as a popular bookstore for 87 years. Then along came Amazon and, in a little over a decade, it was out of business.