Amazon is opening their own logistics arm to their online retail business. They aren't the world's first online retailer to try this – JD.com is in charge of their own shipping, but it looks like many trust Amazon to, erm, deliver.
According to digitalcommerce360 and the Wall Street Journal, Amazon.com Inc. is expected to launch "Shipping with Amazon" in the next few weeks, a service that will allow the online giant to deliver orders directly to customers' doorsteps. It will also put them into direct competition with FedEx and UPS as well as other logistics service providers worldwide – eventually. Internet Retailer surveyed web merchants over the last few days. Would retailers trust Amazon to deliver online orders to their customers? Would they consider switching from their current carrier if the price was right? Both questions were answered with a resound YES.
Retailers Will Switch – If The Price Is Right
More than half of online retailers would switch carriers, with 55% saying they would switch carriers if Amazon stepped into the logistics show. However, most of them said they would need quite large price breaks to switch carriers and do logistics business with Amazon. 33% of those surveyed said the prices would have to be 20% cheaper for them to think about switching. In choosing a delivery carrier, 66% of those surveyed said that price was the most important factor, with reliabilty being second at 30%.
Tom Spiece, owner of R.I. Spiece Sales Co. and DenimExpress.com had this to say: "We sell on Amazon and I figure if you are delivering your own parcels successfully you would be able to deliver mine. I think we are tied to the guy with the best price, because I know my competition is with my competitors that use Amazon for fulfillment. My only fear would be you would weaken UPS to the point where they would need to raise rates and I would be totally dependent on you and couldn't go back to them. Actually my [U.S. Postal Service] business has replaced a lot of my UPS business because I ship small packages."