Amazon is taking on a greater role in how third-party sellers ship
Amazon has already been using local couriers for same-day deliveries in major markets, and has been leaning more heavily on the U.S. Postal Service, including on Sundays.
Amazon is calling this major expansion "Seller Flex", according to the sources. Amazon declined to comment.
As part of the service, Amazon will oversee the pickup of packages from warehouses of third-party merchants and the delivery of those packages to consumers, the report said.
The company has used other delivery services such as FedEx Corp.
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"Amazon is a valued UPS customer", said Steve Gaut, a UPS spokesman. This third-party delivery service is called Amazon Seller Flex. The service will give Amazon more control over its own business and as well providing top customer satisfaction with last minute deliveries. (NYSE:UPS) and FedEx Corporation (NYSE:FDX) typically handle. Amazon is now experimenting with its own shipping service on the west coast, before moving to expand it nationwide. That centralized approach can create logjams, particularly during the busy holiday shopping season. The report, which cited people familiar with the plan, said Amazon is looking to make more products available for free two-day delivery and to relieve overcrowding in its warehouses. And they will still need FedEx and UPS to deliver for them. The company issued refunds to many shoppers and may have signaled that it is too dependent on shipping partners during its busiest times.
Taking over some responsibility for delivery enables Amazon to protect that edge as rivals like Wal-Mart Stores Inc. enhance their own delivery operations.
CEO David Abney at UPS said during a December 2016 interview that the company did not believe Amazon's strategy was to do the delivery and it believes that because of the massive infrastructure UPS has in place and the investment it is making in technology giving them a strong mutual relationship with the online e-commerce giant.
He told analysts that the overwhelming majority of business at FedEx is from business to business as more than 85% of its business does not have anything to do with online sales or e-commerce. "If Amazon does take a few customers, the whole e-commerce pie is growing so fast that FedEx and UPS won't miss a beat".
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