It’s been a busy start to the year for Amazon, as it has announced new perks for Whole Foods shoppers along with rumblings about a future in the healthcare industry. Today, a new report from the Wall Street Journal details upcoming plans for Amazon’s own in-house delivery service that would rival offerings from UPS and FedEx.
While this seems like a massive undertaking on the surface, it’s hardly a surprise that Amazon is trending in this direction. Bringing delivery under its larger umbrella of services will allow the online retailer greater flexibility in any number of areas. The question is, how long until Shipping with Amazon gets off the ground?
According to the Wall Street Journal report, Amazon is pretty far along in the process of getting its delivery service off the ground. The Los Angeles area is expected to be the first location to see full-scale delivery from Amazon on all packages, not just Prime Now offerings.
Obviously, Amazon has been tinkering with in-house delivery for some time with two-hour windows in larger metro areas, but today’s news takes it to a whole different level.
In the last year, Amazon has started dabbling in various areas to get its delivery service off the ground. That includes developing its own line of ocean freighters and its recent launch of Amazon Key, which allows drivers access to your home in exchange for secure drop-off. Amazon also recently leased some 40 aircraft in a move that established its own delivery hub.
The elephant in the room is whether or not Amazon will be able to scale its latest venture to the same size as UPS and FedEx. As established players in this space, both services have massive networks already in place that allow for delivery across the country and the globe. But Amazon’s long-term aspirations to be involved in nearly every aspect of consumer’s lives makes this a natural next step.
By developing its own in-house delivery service, Amazon is potentially side-stepping some legal landmines on the horizon. As opposed to merging or purchasing an existing service, Amazon can avoid some anti-trust issues and build out its network methodically.
To recap the last year, Amazon spent $13.5 billion on the Whole Foods acquisition while ramping up its content production for the Prime Video streaming service. Both have proven to be costly ventures, but ones that should pay off for Amazon in the long-run as competitors scramble to sustain their business in these emerging categories.
An official launch date for Shipping with Amazon has yet to be formally announced, but we expect to see additional details in the coming weeks.
Source: Wall Street Journal