Here's a business school case for you wanna be corporate execs to chew on.

Should Amazon implement an integrated delivery network? Using their own network, they would set up regional distribution centers and a fleet of Amazon trucks to make direct deliveries to their customers while avoiding UPS, FedEX and the U S Postal Service (USPS).

Couple of things to consider:
...Amazon recently contracted with the USPS to make Sunday deliveries in select markets
...Jeff Bezos rolled out his prototype drone delivery vehicle on 60 Minutes
...Amazon offers a $79 a year Prime service for streaming that also includes two day free shipping

Amazon would incur a massive capital cost to acquire the real estate and trucks, and would face the ongoing personnel costs of drivers, etc.

Certainly Amazon has the data base to determine its cost under its existing model and we can well assume that if they thought it would cut costs, they'd already be doing it.

Nonetheless, let's have some fun. Your analysis is welcome. Have at it.

Who knows.... they know their bottom line.

Would going internal for deliveries with costs, revenues, and control be a cheaper option than outsourcing the shipping contracts? Would your sales go up if you can deliver it "quicker" than the next guy?

I feel pretty sure they have looked at it....

A delivery system that tops UPS…. a tall order indeed.

As a basic rule, Americans don’t typically try to improve on profoundly successful
products and services, rather we try to make them more marketable or affordable.

Then again, I thought Best Buy would be in bankruptcy by now, so what do I know.

(12-07-2013 10:37 AM)PirateTreasureNC Wrote:  Would your sales go up if you can deliver it "quicker" than the next guy?

That's a big "if". Especially since they'd be hurt if they stumbled out of the gate. Either way, this drone thing could kill this entire discussion. The margin for truck delivery shrinks if you can deliver a large % of sales through the air.

It's also worth noting that not all of Amazon's sales are "fulfilled by Amazon". It's a pretty important piece of information to this discussion.

Having trucks on the road is a huge liability and then there is the possibility of unions getting in the way. I'd continue to let UPS deal with those headaches.

I'm with RaiderATO about being curious how much of what is purchased on Amazon is actually "fulfilled by Amazon" rather than from other people simply listing their items.

(12-08-2013 09:04 PM)Monarch_Pride Wrote:  I'm with RaiderATO about being curious how much of what is purchased on Amazon is actually "fulfilled by Amazon" rather than from other people simply listing their items.

Who knows what is stocked by amazon, stocked via the amazon marketplace (i.e. vendors listing on amazon), OR amazon buys vendor direct per purchase via amazon.

(12-08-2013 09:04 PM)Monarch_Pride Wrote:  I'm with RaiderATO about being curious how much of what is purchased on Amazon is actually "fulfilled by Amazon" rather than from other people simply listing their items.

Clearly this is anecdotal, but as a heavy Amazon user at this time of year (I do virtually ALL of my Christmas shopping on Amazon), I'd say that 48 of the 50 or so items I have ordered, have come directly from an Amazon warehouse. Their site will tell you exactly where the shipment is coming from.

(12-08-2013 07:46 PM)smn1256 Wrote:  Having trucks on the road is a huge liability and then there is the possibility of unions getting in the way. I'd continue to let UPS deal with those headaches.

I agree that unions can be a problem but remember, FedEx has been able avoid organization.

(12-09-2013 08:50 AM)QuestionSocratic Wrote:  Clearly this is anecdotal, but as a heavy Amazon user at this time of year (I do virtually ALL of my Christmas shopping on Amazon), I'd say that 48 of the 50 or so items I have ordered, have come directly from an Amazon warehouse. Their site will tell you exactly where the shipment is coming from.

I work in e-commerce and we sell things through Amazon (but we do our own fulfillment/shipping). Excepting books (because I just assume that they have just about all the books in their fulfillment centers), there is obviously no way that its 96%. But, I have no way of even guessing a ballpark percentage (orders, or $$$).

(12-09-2013 08:19 PM)RaiderATO Wrote:  

(12-09-2013 08:50 AM)QuestionSocratic Wrote:  Clearly this is anecdotal, but as a heavy Amazon user at this time of year (I do virtually ALL of my Christmas shopping on Amazon), I'd say that 48 of the 50 or so items I have ordered, have come directly from an Amazon warehouse. Their site will tell you exactly where the shipment is coming from.

I work in e-commerce and we sell things through Amazon (but we do our own fulfillment/shipping). Excepting books (because I just assume that they have just about all the books in their fulfillment centers), there is obviously no way that its 96%. But, I have no way of even guessing a ballpark percentage (orders, or $$$).

Mostly books and toys. So most would be Amazon's standard items. Nonetheless, your point is quite possibly correct.