FedEx's new service takes aim at Amazon

While we'll need to wait to seem how the implementation works out, I like the basic idea of this basically being Fulfillment By Amazon, but without having the rely on a potential competitor. It seems like you're an importer who uses FBA(or even just lists on Amazon and self fulfills) you have a short window to make money before Amazon eventually moves in on you to start selling the same thing. Even if you're selling your own stuff, you might not be safe(there's some kind of laptop accessory that I'm trying to remember that basically had an Amazon Basics version come out after being on Amazon for a little while).

Don't take this as being against big evil Amazon(I buy tons of stuff from them), but I'd rather them not be the Walmart of the internet that puts all the small web shops out of business.

It was bound to happen eventually. It's not exactly a secret that Amazon is trying to create their own shipping services.

One thing I'm confused about... I can't tell from the article - is this a way of letting people list their products on fedex.com, or is this a way for sellers to hold their products in a fedex warehouse, sell the items on their own website, then tell fedex where to ship it?

More like UPS, which has been doing that sort of thing for years as UPS Supply Chain Solutions.[1]

[1] http://www.ups-scs.com

This service is based on Fedex's acquisition of Genco, in December 2014. Genco is a 3rd party logistics services company, offering a of logistic services:from the standard warehousing an fulfillment(including 130 warehouses), to being somewhat of an industry leader at handling returns(and e-commerce has a relatively high rate of returns, especially in fashion), to testing and repairing stuff, and than reselling those.

At that time, Fedex also bought a software company that helps other retailers with complex stuff like customs handling.

Maybe a total framework to handle all the physical and regulatory stuff and e-commerce play might need. The stuff that enables Amazon to have such a large selection, and the stuff that enables it to be so good at customer service. And that may have been what triggered Amazon to attack Fedex.

They're missing the entire advantage Amazon has in the situation: n items, one box.

When you buy three items from Amazon, they have the opportunity to put both items into a single box and have a much smaller last-mile cost[0]. With this FedEx program, each item will have its own box and maintain the per-item last-mile costs. Last Mile is the largest fraction of an e-commerce retailers costs after actual products.

It's a neat program, but Amazon still has a cost advantage.

[0] (Now, they don't always do that, but that's usually in order to make sure the items get to the customer on time, or maybe they're coming from very distant different warehouses)

If FedEx can give better commission cuts than Amazon fulfillment and pretty much same delivery speeds then it is definitely a winning situation for FedEx. I envision a future where no one goes to brick-an-mortar stores anymore. Online shopping experience needs to be made intuitive and personal enough that goods get delivered at home. Two days shipping is good but not as good as same as shipping with minimal shipping costs. Still needs work. We are getting there.

While this is great to have another fulfillment service available (though there already are other choices than Amazon for fulfillment services), I'm not so sure how much this will actually impact Amazon. Does anyone know what percentage of Amazon's fulfillment services are used for things not sold on Amazon marketplace?

Seems like a smart move for them, and a win for customers across the board.

This is funny, if Amazon decides to use Amazon logistics for shipping FedEx will go bankrupt within 6 months probably.