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Digiday reports on Amazon’s latest effort to become a third-party shipping and logistics provider, competing with the likes of FedEx and UPS. Last week, the story says, Amazon “reportedly offered sellers in the New York City, Los Angeles and Chicago areas the option to use its owned and operated shipping capability (called Amazon Shipping) to ship from sellers’ warehouses directly to customers, and not through its fulfillment centers. It takes Amazon’s delivery capabilities beyond multichannel fulfillment, a service that allows merchants to ship via Amazon’s fulfillment centers.”

The story notes that “a more robust homegrown shipping capability reduces Amazon’s reliance on third-party delivery providers, letting it control more of the experience. It also solves a pain point for some sellers who experience problems when using third-party providers … Looking longer term, with its extensive logistics network, shipping is an untapped opportunity for Amazon. According to a recent report which cited data from consultancy Shipmatrix, Amazon currently handles 10 percent of its own shipping traffic. Meanwhile, USPS handles 62 percent of Amazon’s traffic, UPS handles 21 to 26 percent and FedEx handles 8 to 10 percent. An owned and operated shipping service opens up possibilities to scale the service to companies outside of Amazon’s ecosystem.”
KC's View:
This all seems inevitable to me. As Amazon looks to exercise greater control over its delivery systems - both for economic and branding reasons - it almost certainly will look to sell those services to others as a way of exerting dominance and amortizing the costs.

It is funny that when I first read this story, I wondered if such efforts were distracting Amazon from more important priorities, like Whole Foods. But this probably represents linear thinking, and mostly reflects the fact that I’m not able to walk and chew gum at the same time.

Amazon seems to recognize no such limitations.