Amazon is testing its own delivery service to rival FedEx and UPS, according to Bloomberg. Fred Katayama reports.
Amazon is taking on UPS and FedEx with a new delivery service it's testing called Seller Flex, according to Bloomberg citing confidential sources. With Seller Flex, Amazon will oversee a pickup of packages from warehouses of third-party merchants who sell goods on Amazon.com. It will then deliver them to customers. That part is now often handled by UPS and FedEx. Bloomberg reports Seller Flex will give Amazon greater flexibility and control. It will also save Amazon money through volume discounts and help move inventory from its warehouses. Amazon started Seller Flex in India two years ago. It's now marketing the service to merchants in the United States. Disruptive Technology Advisers chief economist Max Wolff. (SOUNDBITE) MAX WOLFF, CHIEF ECONOMIST, DISRUPTIVE TECHNOLOGY ADVISERS (ENGLISH) SAYING: "Amazon is a massive driver of revenue and packages throug the system here, making them very important to FedEx, UPS, and the U.S. Postal Service. The announcement today that they are going to do some more package fulfillment, both, for themselves, as well as for others, is a shot across the bow. They don't move the whole industry, but they certainly shape and make parameters for the industry. I think they're going to be an important part of the industry going forward." Shares of FedEx and UPS fell on the news. Amazon edged higher.