Amazon (NASDAQ: AMZN) now wants to control the entire, online retail experience. The next piece of the puzzle for Amazon appears to be the final stage of an online retail purchase...the delivery.
Looking to create a more consistent experience for Amazon shoppers, and to have greater control over the logistics of it's third party packaging, Amazon has started delivering packages on their own. The service is now in testing mode on the West Coast, but if you follow Amazon's history, you know it likely won't be that way for long. Here's how it works currently. The company has a new program it's calling Seller Flex which allows third party sellers on Amazon to list their products with the ability for Prime, two-day shipping. Amazon will personally pick up the packages from sellers and in many cases will handle delivery to the customer.
This news has put pressure on the current logistics companies that Amazon works with now, United Parcel Service (NYSE: UPS), and FedEx (NYSE: FDX). A report from Bloomberg says that Amazon will use the delivery companies in some specific instances, but hopes to take over more and more control over time.
This idea is not new for Amazon. For two years they tested this program in India, and now are testing on the West Coast. Also, they have been working with third party sellers for almost two years now, allowing them to give the Prime, two-day guarantee if they could prove that the timeframe was "feasible" by the seller. The packages do not need to be housed in any of the Amazon warehouses. They have also been able to use the Prime badge if the third party sellers had their products in one of the Amazon fulfillment centers, but the company seems to be concerned with overcrowding and looking for other alternatives.