Ever wondered why most of Amazon’s products are delivered by Amazon itself? It is part of their long-term strategy, though it comes with a cost.
Once upon a time, Amazon (like most e-commerce platforms) depended on third-party delivery services like FedEx to deliver its product. But very soon the company realized that to beat its competitors, it has to be better than them in more than one ways. Delivery has been one of the prime strengths of the e-commerce giant. “Amazon Fulfilled” has almost become a standard of quality, as customers found out to be much more reliable than regular delivery.
In 2019, Amazon delivers almost halfof its products. Compare this to last year, where the numbers stood at just 20 per cent. In doing so, it has challenged two of the biggest logistic players in the US – FedEx and UPS. Of course, the race didn’t come cheap for the company. Between June and September, Amazon spent $9.6 billion on fulfilment – 50 per cent more than their usual expenditure. It has also edged closer to its competitors in sheer numbers too. Amazon currently delivers 2.5 billion packages each year, compared to FedEx (3 billion) and UPS ( 4.7 billion).
While some of this aggressive expansion could be attributed to its One-Day Delivery program, much of it relates to the company’s general desire to control all aspects of its marketplace. Amazon already sells a lot of products under its own brands. It is also expanding its fleet and using drones to deliver packages. Very soon, Amazon might not need any other industry to run its online marketplace.
