Shipping With Amazon
In a rather anticipated move, Amazon announced that they will be trying out their Shipping with Amazon in Los Angeles with plans to expand to other US cities within the year. Amazon has already been busy building out it’s shipping infrastructure on the water, in the air, and in your house over the past decade. Now the ecommerce giant wants to take on the likes of UPS and FedEx.
FedEx and UPS vs SWA
Luckily for the two cargo delivery services, UPS and FedEx, it is going to take some time for Amazon’s SWA to grow large enough to compete with them directly. But as we have seen with other Amazon forays, the ecommerce giant moves quickly when it decides to move. However, UPS and FedEx already spend billions each year improving their services and upgrading, so Amazon has some ways to go before they can say they are competing.
Bringing cargo, freight, and package delivery under its own wing is just one more move for Amazon to vertically integrate like it did with Amazon Web Services. First, they build out infrastructure to support themselves, and then they move to selling these services to third parties. It makes perfect sense to figure out how to save your company millions of dollars and then make billions of dollars by offering a better service at large.
Start Internally, Test Small, Unleash a New Service
The common question we hear is “Is Amazon going to take over the world?” We don’t know that yet, but they have offered an incredibly effective blueprint for companies to develop and release products.
In this case, Amazon built up delivery and shipping infrastructure to support their massive business. This allowed them to tinker with it relentlessly without having to deal with other delivery companies or partners. Once they refined it enough for their own liking, they were ready to test it out in a small scale: London. Granted, London is a massive city, but as far as testing shipping services go, a single city is a small-scale test.
Now Amazon is ready to move onward and upward and test their SWA service again in Los Angeles. From there, Amazon will only move to offering SWA in other US cities – some within the year. It is not hard to imagine a time in the not-so-distant future that you log in to your Amazon account using your Amazon internet in order to buy Amazon products that are shipped to your house via Amazon shipping.