Amazon.com, Inc. (NASDAQ:AMZN) is reportedly planning to launch its own delivery service called “Shipping with Amazon.”
According to these reports, the online retailer is looking to first launch the delivery service in Los Angeles. It will be allowing third-party vendors that sell items through its website to make use of Shipping with Amazon. However, it also plans to bring the offer to other businesses in the future.
While the reports claim that the service will only be available in Los Angeles at launch, it won’t likely stay that way for long. Anonymous sources say that there are already plans underway to bring Shipping with Amazon to more cities in 2018.
The online retailer hasn’t directly come out an confirmed the reports about Shipping with Amazon, but it isn’t shying away from their, either. One spokesperson for the company said that it is “always innovating and experimenting” in an effort to “create faster lower-cost delivery choices,” reports The Wall Street Journal.
Plans from Amazon to launch a new delivery service will put it in direct competition with FedEx Corporation (NYSE:FDX) and United Parcel Service, Inc. (NYSE:UPS). It will be interesting to see how the two delivery companies respond to Shipping with Amazon when it becomes a larger threat by expanding to more cities.
Shipping with Amazon will also likely benefit customers with an Amazon Prime account. With Amazon controlling the shipping process, it can guarantee items make it in time for free two-day delivery. Even if the product comes from a third-party seller.
AMZN, FDX and UPS stock were all down 2% as of Friday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.