Amazon is preparing its
own delivery service and will be competing with UPS, FedEx and U.S. Postal
service. “Shipping with Amazon,” as the service is called, will pick up
packages from businesses, initially the company’s third-party sellers, and
deliver them to customers. Deliveries are reportedly set to begin in Los
Angeles in the coming weeks and expand from there” By doing this will allow
amazon to speed up delivery time and convince more people to buy Prime memberships.
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http://fortune.com/2018/02/09/amazon-delivery-service/
7 comments:
I think this shipping service would result in a more competitive market and make USPS improve their service or move towards privatization.
Additionally, I feel like this is a step for Amazon to get even more ahead in the industry. Recently Walmart has started to insert itself into territory that was before exclusively dominated by amazon. This step to Amazon's own delivery service provides the business to remain on top.
I believe that Amazon is doing well to keep far ahead of the rest of the industry. Having faster delivery always looks pleasing to consumers, and is pushing the company further ahead. Hopefully, it goes well in LA.
I could see many large companies are trying to integrate their businesses, creating their own products and services ecosystem. For example, Apple sells the smartphone, computer, laptop, tablet and so on. It uses Apple ID to connect all its products so that competitors could not easily motivate Apple users to switch their purchase behaviors. Same as Amazon, Amazon sells products online which highly rely on the delivery service. Amazon is trying to build its own delivery service so that in the future, competitors would be less likely to be able to compete with Amazon.
This vertical expansion by Amazon makes sense. This last link of the product delivery process has been expected as their global reach has continued to grow over the past few years. Implementing this into their business model in many ways is the final frontier in maximizing their cost efficiencies and cutting their delivery time of goods. With all of that said, this expansion is a gamble and should be closely examined as they continue to invest in this element of their supply chain.
This is a great idea for Amazon because if they manage to have a good delivery service, they would be able to cut their costs and not having to depend on delivery services like UPS. The fact that this decreases the delivery time makes their product even more desirable because even if they are at the top now, they are innovating and bringing up more things like this delivery services, which is going to be important when they have to compete against other companies like Alibaba, which is growing in China and looking to expand.
I think this is very interesting for Amazon. I know they continue to grow drastically at over 20% a year but it will be interesting to see how UPS and Fed-ex respond. Also we talk a lot in class about the rise ans fall of Sears and it will be interesting to see if Amazon becomes the Sears of our generation.
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