Shipping with Amazon set to disrupt the UK post and courier industry

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Amazon Shipping adds Dangerous Goods service

With the launch of Shipping with Amazon, Amazon are set to disrupt the UK courier industry in ways never before seen.

Shipping with Amazon effectively sets Amazon up as a normal courier – they’ll collect parcels from online retailers (regardless of whether the sale took place on Amazon or not) and deliver next day to the consumer.

Amazon already have plenty of experience delivering parcels and even as a private delivery company are one of the top couriers in the UK alongside giants such as Royal Mail, Hermes and Yodel. They have built out Amazon Logistics to deliver products held in their warehouses, either sold by Amazon Retail or through FBA when sold by third party merchants. In recent years, Amazon added Seller Fulfilled Prime where a retailer could keep the stock in their own warehouse and Amazon Logistics would pick it up to deliver, so collections from merchants are nothing new for Amazon.

Delivery options

One of the reasons Shipping with Amazon will become ultra-attractive to consumers is the breadth of delivery options Amazon can offer. Amazon already deliver to your door step, to a neighbour, to a safe place, to a locker, to a parcel shop and are experimenting with drones, deliveries to your car boot, delivery to your garage and even delivery to inside your house. It’s unlikely that all of these options will be available through Shipping with Amazon at launch, but they’ve got the technology to build the most flexible delivery system of any courier as they progress.

Amazon have also built superb tracking into the Amazon app which gives an estimated time of arrival and as the courier nears the consumers home a live map showing where the courier is, how many deliveries they have before yours and an estimated time of arrival. We already know that consumers love this but it’s not clear if it will be available through Shipping with Amazon… but if not we’d expect it to come soon.

Shipping with Amazon gives scale for Amazon Logistics

By taking on deliveries for products they haven’t sold, Amazon will be able to massively scale up Amazon Logistics. They already have thousands of contracted third party couriers across the country and the steady influx of parcels with goods not sold on Amazon will increase this massively. What Amazon are lacking however, is the massive sorting hubs with miles of conveyor belts which can transport a parcel in minutes from the incoming truck to the outgoing truck – Amazon Logistics is still a largely manual sortation process and so the scaling up will hit a ceiling fairly quickly.

Amazon Logistics are set up for products coming out of a fulfilment warehouse and that’s a totally different operation to thousands of parcels arriving on a trailer ready to be sorted. Don’t expect this to deter Amazon however – they have form for building operations needed to run their internal business and then renting them out – look at AWS where Amazon sell could computing, the marketplace itself where Amazon as a retailer allow merchants to sell on their platform, Amazon FBA where Amazon need warehouses but scaled with dozens of warehouse across the country by renting out space for merchants stock. Amazon are aiming to build Amazon Logistics into a massive enterprise and the launch of Shipping with Amazon this week is just the start.

As an indicator of how far Amazon Shipping could go, we need look no further than Hermes. Hermes was founded in 1972 as the private delivery company for the OTTO group. Now they are one of the largest couriers in Europe and there is no reason that Amazon couldn’t follow suit.

Shipping with Amazon gives data to Amazon

Shipping with Amazon will provide a ton of data for Amazon to crunch. They already know what you sell on Amazon but if you start shipping your eBay and website sales as well as those from any other platforms you trade on through Shipping with Amazon they’ll build a picture of your business and discover what percentage of your sales take place on Amazon.

Sales on Amazon, for those that don’t use FBA, will be a natural place to start using Shipping with Amazon. So long as you despatch on time, Amazon will then be responsible for delivery and one would expect them to protect your seller metrics if anything goes wrong. As soon as you start shipping products sold on other venues, Amazon start to build a bigger picture of your entire business and that data has value to Amazon.

The big question that everyone is asking of course, is how long will it take eBay to add Shipping with Amazon as an option so that eBay sellers can upload tracking information and will eBay provide the same On-Time delivery protection for sellers.

9 Responses

  1. With the CWU balloting for Christmas strike action, this is perfect timing for Amazon.

    Their service may be a bit Hermes at times, but it’s better than the no-service RM will be delivering if they go on strike. If we move over to them, I can’t see that we’d move back to Royal Mail (if they even still exist).

  2. Amazon will definitely gain shipping market share as many of the smb that sell on Amazon but warehouse their own stock, they will use Amazon shipping because their seller metrics will be insured for late delivery.

    If a business sells on Amazon and does its own warehousing and shipping. If a product is delivered late consistently then that affects the seller’s metrics on Amazon which can also affect their ranking. If a business uses Amazon shipping and the product is delivered late then Amazon is culpable and not the seller. Where with this the seller’s ranking metrics are insured by using Amazon shipping. Tens of thousands of smb in the UK will use Amazon shipping for this reason.

    What Amazon could do is team up with the major supermarkets and have collection points in side the supermarkets. Where with this Amazon could deliver the general publics parcels.


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