Amazon recently announced an expansion of its Delivery Service Partner initiative. The company is now incentivizing its employees to start their own package delivery company and offering a suite of perks to aid them in their venture. These include access to Amazon’s delivery technology, hands-on training, and vehicle leasing and insurance.
This development had plenty of other delivery services—including USPS, UPS, FedEx—feeling just a little bit nervous. We asked pundits in the industry to weigh in on what kind of an impact Amazon’s new forays into the delivery world could have on traditional competitors.
There are so many delivery services that customers can choose from, such as InstaCart, DoorDash and more. Because there is so much choice in the industry, I doubt Amazon could take a substantial part of the business away from existing delivery service companies.
Currently, Amazon is offering new services like home cleaning and more. I keep seeing negative reviews on these services so haven’t used Amazon to get my house cleaned. I think that they will discontinue these contracting services soon. I really don’t think Amazon will be getting involved with the delivery services industry due to the negative backlash on existing contracting services.
In my opinion, Amazon will work towards excluding third-party delivery services even more in the future. Amazon has already started expanding its shipping fleet significantly. This has included both vans and airplanes.
Other major shipping companies such as UPS or FedEx can potentially lose millions of dollars in the long-run, since a huge amount of their work has relied on delivering Amazon products.
The Last Mile project keeps growing and will become the only delivery system for Amazon eventually. When this will happen, however, remains uncertain. Amazon keeps growing every year so it still seems impossible that it will completely substitute other delivery services in the near future. What is certain is that the amount of products sent through third-party agencies will be reduced.
Amazon has the delivery systems and infrastructure already in place to disrupt any delivery industry in the U.S. they would care to enter. Their number one priority is keeping customers satisfied, so they’ll only look to disrupt a delivery industry if it is in high demand by their current customers.
Amazon’s advancements into the delivery sector are mainly due to high demands by shoppers. UPS and FedEx will definitely feel the pinch when Amazon rolls out its delivery services and is able to get shoppers their merchandise door to door. The only way to compete will be to find areas where they can provide either faster or cheaper service options.