Amazon Reportedly Testing Local Delivery from Merchant DCs

Amazon Reportedly Testing Local Delivery from Merchant DCs

Amazon Reportedly Testing Local Delivery from Merchant DCs

A report from Bloomberg News said that Amazon is testing a new delivery program known as "Seller Flex" in which the company picks up third-party seller packages being sold on its online platform and delivers them to the consumer. The new service would function similar to UPS and FedEx. 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. The service began two years ago in India, and is now being tested in West Coast states, with a broader rollout planned in 2018, the report said.

Amazon has been testing the new service in India for two years, Bloomberg said, adding it was deployed in West Coast states on a trial basis earlier this year. Customers may see their favorite third-party sellers jumping ship rather than be consumed by degrees by Amazon. Amazon recorded an all-time high of almost $7.2 billion lost on shipping in 2016, according to GeekWire's analysis of the e-commerce giant's financial results.

FedEx CEO Fred Smith downplayed concerns about Amazon's potential entrance into delivery during a conference call with analysts last March. There are many sellers on Amazon Central who use P.O. boxes for returns, and UPS does not deliver to P.O. boxes. Amazon declined to comment on the report and has yet to address the situation. Amazon.com would provide free two-day delivery to eligible customers. And they will still need FedEx and UPS to deliver for them.

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Amazon will now have full control of its eCommerce business if the company does launch its own delivery service.

"We are using the same carrier partners to offer this program that we've used for years, including UPS, USPS and FedEx", Amazon spokesperson Kelly Cheeseman wrote in an email to MarketWatch. "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".

Many online merchants who sell on Amazon's marketplace pay fees to store products in the retail giant's warehouses, letting Amazon gather and pack products when orders arrive.

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