For a number of years now, Amazon has been so much more than merely an online bookstore. As the firm has evolved, it has developed highly efficient ways of getting things done. Rather than reserving these services for in-house use, their philosophy has generally been to then offer these services to the public, and it’s a move that has brought them tremendous amounts of revenue.
They’ve already got B2B services such as Fulfillment by Amazon and Kindle Direct Publishing covered. In fact, third-party sellers now make up 40 percent of their sales. Their once in-house computing cloud has been expanded to become the highly successful Amazon Web Services that many big businesses rely on. While their foray into consumer electronics with things like the Fire Phone has not been as successful as they’d like, one thing that is really taking off for the company is logistics.
Huge, Inefficient Logistics Market Ripe for a Revolution
Amazon is not outsourcing things like inbound logistics and home delivery to the extent that it used to, and everyone stands to benefit.
More than $19 trillion of goods are shipped across borders annually, and international freight spending exceeds $1 trillion each year. Amazon’s keen ability to leverage technology and scale could make a big impact here.
Free shipping and quick Amazon Prime delivery are big money-makers for the firm, but they are not cheap to implement, which is why Amazon started looking into leasing an air fleet and placed its own trucks on the road last year. In November, one of their subsidiaries registered as an ocean shipping provider with the U.S. government in a strong sign of things to come.
If Amazon is successful in cutting its in-house fulfillment and logistics costs, history indicates that they will eventually extend these internal services into third-party services that could have a huge impact on the logistics industry. Freight and delivery companies ought to pay close attention to Amazon and step up their game if they want to remain at the forefront.
This blog post was based off of an article from TechCrunch. View the original here.