Amazon – the e-commerce giant – has silently begun another battle against a new business sector. According to a report, the company, which is headed by Chief Executive Officer Jeff Bezos, has started delivering packages from third-party retailers who operate stores on the online retailing site.
Amazon tries out a new delivery program called “Seller Flex”
This new test program is being held on the West Coast before an anticipated national rollout next year. The test program is aimed at hiking up the amount of goods available for two-day delivery. In addition to this, the program is giving investors in UPS and FedEx a huge fear of competition because those two national delivery companies are managing the deliveries of the online retailer currently.
According to reports of Bloomberg, the e-commerce giant is calling the project ‘Seller Flex.’ News site Bloomberg cited a person familiar with the test for its report. The U.S.-based e-commerce company would, under the program, decide which third-party packages it would deliver to customers directly and which packages would be delivered to the homes of its customers through UPS and FedEx.
The overnight delivery companies handle the delivery process currently. The shares of FedEx declined less than 1% after this news. The news about the online retailing site making a move into home delivery of third-party goods sent shares of UPS down by 1.3% in early Thursday trading.
Amazon says it is using the same carrier partners
Managing more deliveries would give the online retailing site more flexibility and more control over the few last miles to the doorsteps of shoppers. According to Bloomberg, which was the first news site to report on the Amazon test, the new program will allow the online retailing site to save money through volume discounts and assist in avoiding congestion in its own warehouses by keeping merchandise in the facilities of outside sellers.
Control over delivery could be important for Bezos. A late rush of orders in 2013 into the holiday shopping season caused UPS and FedEx to miss the promised delivery dates. The U.S.-based e-commerce giant was compelled to issue refunds to consumers who did not get their gifts in time.
According to Bloomberg News, the e-commerce company will pick up packages from third-party sellers selling on its platform under its new delivery program dubbed “Seller Flex” and will deliver the products to consumers. However, in a statement, the e-commerce company said, “We are using the same carrier partners to offer this program that we’ve used for years, including UPS, USPS and FedEx.”