Would You Rely on Amazon as a Shipping Carrier?

By: Ina Steiner

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Amazon is offering sellers an alternative to UPS, FedEx, and USPS for their off-Amazon orders, according to news reports last week. “Amazon relaunches shipping service that competes with FedEx and UPS,” was the headline from ABC News on Friday.

The logistics service is different from Amazon's other services like FBA (Fulfillment by Amazon) and MCF (Multichannel Fulfillment), where you store your goods in Amazon warehouses and it fulfills them, whether it's an Amazon order or an order from a rival marketplace or your own website. With the newly expanding service, Amazon picks up your packages at your location and delivers them to the customer.

From what we learned from a source in 2019, it was a service for merchants who had warehouses. And it makes sense that Amazon might not want to pick up low-volume orders from residential addresses.

Note that Amazon could still use shipping carriers in delivering some of the packages – just as it does with its own orders today (it doesn't say on the Amazon Shipping website). But it is not a stretch to think Amazon would cherry pick the most profitable business – and that could mean UPS, FedEx, and USPS are left with the less profitable business and might feel pressured to raise costs to hold their margins steady.

The very fact that Amazon put the service on hold due to the pandemic, according to the recent media reports, means sellers who rely on Amazon Shipping could be vulnerable to the whims of the company. 

Sellers may remember during the early days of COVID-19, Amazon restricted sellers' use of FBA, as we reported at the time: 

“On March 17 (2020), Amazon stopped accepting sellers' inbound shipments to its fulfillment centers for products other than high-demand goods such as household staples and medical supplies. Many sellers rely on Fulfillment by Amazon (FBA) for their livelihood.”

That doesn't mean sellers shouldn't use Amazon Shipping services, but they should go into it with eyes wide open. What do you think? And which carrier do you rely on for which needs?