Economy

Amazon testing its own delivery service for some products

Amazon testing its own delivery service for some products”

Amazon itself will handle the pickup of packages from sellers.

Shares of United Parcel Service Inc. dropped 2.3% and of FedEx Corp. shed 2.0% in premarket trade Thursday, after Bloomberg reported that Amazon.com Inc. was testing a new delivery service.

Amazon is trialling a service called "Seller Flex" that will provide delivery services for third-party merchants on its platform, according to a new report from Bloomberg.

Right now, in order to be listed as an Amazon Prime product, third-party retailers have to ship their products to Amazon, which stores them and processes the shipping, usually utilizing UPS or FedEx. Amazon previously tested it in India for two years.

For the time being at least Amazon will still use FedEx and UPS and other couriers for delivery services, but the company will now decide a how a package is handled instead of leaving the decision up to the seller, the Bloomberg report added.

In the past, both FedEx and UPS have scoffed at the idea Amazon would eventually become less of a partner and more of a competitor. Its Fulfillment by Amazon offering already lets merchants ship goods to Amazon warehouses around the US, where they can be stored, packed and shipped to customers. UPS said in 2016 that Amazon lacks the fundamental infrastructure necessary for a broad-scale delivery service. A rush of last-minute holiday orders in 2013 forced Amazon to issue refunds to shoppers who didn't get gifts in time, highlighting the perils of being overly dependent on partners for a main part of its business pledge - quick, reliable delivery. Online holiday spending in the USA will hit $129 billion this year, up 12% from a year ago, according to Forrester Research Inc.



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