Amazon makes its next competitors clear with a regulatory filing
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Amazon makes its next competitors clear with a regulatory filing

Ecommerce giant Amazon is rapidly expanding into so many new industries, it might just end up competing with everyone! In a recent regulatory filing, the company has added “transportation and logistics services” to the ever-growing list of areas in which it operates, putting it in direct competition with shipping partners like FedEx and UPS – which, confusingly, will likely see Amazon remain a valued customer. At least for now.

Amazon’s share price has appreciated by 11% so far this year

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Source: Yahoo Finance

Amazon’s been making moves in the delivery space for a while now, and it’s easy to see why: control over shipping and delivery is the ‘other half’ of online retail – something Amazon does better than pretty much anyone else. Previously, Jeff Bezos has discussed using drones to deliver packages, and the company has begun using delivery robots in a recent trial.

Over the last year or so, Mr. Bezos’ attempts to have a bigger hand in the delivery of Amazon’s shipments have taken a more practical turn. The company has leased fleets of trucks and planes, and started a “Shipping with Amazon” program that sees drivers pick up packages from third-party sellers and deliver them.

One reason Amazon is big on deliveries is the extent to which Prime has grown. Last year, Amazon’s shipping costs came in at $9 billion – 23% higher than they did in 2017 – as customers eagerly took advantage of Prime’s free delivery offer.

This is what Amazon wrote in its annual filing: “The worldwide marketplace in which we compete is evolving rapidly and intensely competitive, and we face a broad array of competitors from many different industry sectors around the world.” If anything, that may be an understatement!

Disclosure
Dominion holds Amazon in its Global Trends Ecommerce Fund.


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