Amazon, in Threat to UPS, Tries Its Own Deliveries | Hacker News Reader

Amazon, in Threat to UPS, Tries Its Own Deliveries

online.wsj.com

25 pointsitry16 comments

This is being told as a story about ambitious new services, but right now I bet it's mostly amazon's traditional squeezing of suppliers. Amazon don't need a comprehensive service for them to be worthwhile: they can selectively cut out areas which deliverers currently make the most profit on, and leave the difficult ones.

It will be interesting to see if this affects relative prices. It could well mean that generalists have to put up their prices in rural areas.

I agree.

Also, I'm not really sure this makes sense, if it is only for delivering Amazon packages. Surely FedEx/UPS have better economies of scale as they can deliver everyone's packages?

It's been a very long time since you've seen a company do total vertical integration well.

At least in the UK the delivery/logistics market has razor-thin margins with relatively high capital costs. Is this really the best use of Amazon's capital vs spending it on developers or content for their other services?

> Also, I'm not really sure this makes sense, if it is only for delivering Amazon packages. Surely FedEx/UPS have better economies of scale as they can deliver everyone's packages?

They also have profit margins that could be taken by Amazon. Amazon has been putting warehouses near where it sells the most product which means average delivery length has been dropping. I could easily see Amazon beating UPS at local delivery. Especially so with grocery delivery in the mix--they're already stopping by your building to deliver food, why not drop the morning's packages as well?

There's also less handling: Amazon would be loading its own trucks that go directly to the customer in cities with warehouses nearby, compared to UPS who have at least one sort step.

In the UK, Amazon also has to take into account future competition as a result of eBay's recent purchase of shutl.it, who specialises in ~1 hour deliveries, coupled with their increasing number of deals with regular stores. E.g. Argos offers a lot of products on eBay, and Argos also used to offer shutl.it delivery for an extra fee.

Perhaps the FCC could build Amazon a special road system for delivery to the last mile.

Mike Moritz saw this coming:

http://www.linkedin.com/today/post/article/20130805231302-25...

In Los Angeles customers who pay $220 up front for Amazon Fresh, the company’s home delivery grocery service, get ‘free’ shipping on orders above $35. It might be ‘free’ but Amazon has their cash. Customers and vendors have helped Amazon build its 90 fulfillment centers, which now enclose about 65 million square feet. That should be enough to make the managements of FedEx and UPS tremble.

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So did Simon Sarris:

https://news.ycombinator.com/item?id=6591112

It's important to note that if any other company spent until their EPS was negative, investors would flip. Amazon is playing with razor thin margins while trying to scale up a platform to end all platforms that we might someday use for everything without thinking about it. If successful, on that day/year/eon dollar bills might as well be printed with Jeff Bezos' face on them. Amazon won't be using UPS and Fedex trucks on that day. They'll be using Amazon trucks. You'll know that era when you see it, I think.

If they could deliver me a quad venti latte in 12.5 minutes, then I'd be impressed.

But in all seriousness, generally the only thing that has ever been disappointing about ordering from Amazon, is the shipping times. Any time I've ever had to call Amazon because of an issue, I've been impressed with their general attitude toward me and their willingness to fix or go beyond what my original issue was.

Having said that, they seem to have some smart people working on logistics for them https://www.youtube.com/watch?v=gcXoj_UBXv8

So it only makes sense for them to move toward the "last mile"

They've been doing this for quite a while ("Amazon Logistics") in London, UK. They have a depot in Croydon. Since late 2013, at least.

In New England (US) too: "A1 Courier"

Is it a "proper" service though? The delivery guy always turns up in a rented van, makes me think they're just outsourcing it to a man in a van or something.

Yes it often looks like casual labour, occasionally we see someone from the depot though. They made a few mistakes at first, delivering to wrong address and leaving parcels in inappropriate places. They seem pretty much fine now.

They don't have the fancy tracking that some of the larger couriers have now (30-minute delivery windows etc) but they seem better than some of the super-cheap couriers (e.g. HDNL).

Will this become as successful as their cloud computing business? Most parcels I get are from Amazon anyhow. I guess its that way for many people. They will have an insane headstart going into this business.

Personally, I welcome our new delivery overlords. I would like to order stuff and have it at my door 1 hour later.

see previous discussion here - https://news.ycombinator.com/item?id=7641861

Own delivery network is already happening in India by Amazon where the delivery partners are not that reliable/costly. Surprising to see e-commerce players take solutions from developing markets to developed markets, rather than the other way round.

When i look at the streets and all that stuff that moves around there, i think: its somehow possible to turn this into a internet of things where stuff moves around like tcp packets in a network.

Without competition, UPS will probably never get there.

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