FedEx is moving in on Amazons turf, FBA watch out for FBFEDEX.

Fulfillment
by Amazon the greatest thing since sliced bread for small and medium sized
internet retailers, but recently some of the magic has faded with the increasing
costs for storage and handling fees. Apparently
others have been taking note of the growing frustration experienced by these
sellers and that someone is FedEx. Wait why would FedEx want to get into the
storage business? One word and that is profits. FBA has been a hugely
successful venture for Amazon representing more than 50% of their total third
party sales. That means amazon is not only making money on that sale but also
on storing and packing that item when it sells, why make one small profit when
you can make three? Good business model right? What’s more FedEx is seeing the
writing on the wall with Amazon what with their fleet of jets, delivery trucks
and delivery drones hovering just over the horizon it’s apparent that Amazon is
looking to reduce their reliance on third party carriers like FedEx. So if
Amazon wants you out what do you do? For starters why not try and get in on
that fulfillment business model? FedEx clearly has the expertise and storage
space plus they have one very attractive competitive advantage over Amazon and
that is they are not Amazon. Why is this an advantage? If you are selling your
merchandise on Amazon its goes in an Amazon box but what happens when your
selling your wares on other sites like ebay, Bonanza or your own website and
having it filled by Amazon? It still
goes in an Amazon box start to see the problem? Wouldn’t you as a merchant
prefer your goods to be handled by a neutral third party? Another reason and
perhaps a far more motivating factor is that your sales are not as transparent
to Amazon, this is particularly appealing to the niche market manufacturer or
that entrepreneur that has cornered a particular market. Amazon is a business
and they are not above undercutting one of their third party merchants by going
directly to the manufacturer. It remains to be seen how successful or effective
this program will be and it will certainly be an uphill battle for FedEx to get
the program firmly established but I think that a lot of disgruntled FBA
sellers may be happy to know that there is now an alternative in fulfillment by
FedEx.  

Leave a Comment

Your email address will not be published.

Shopping Cart
Scroll to Top