What Amazon’s expansion into shipping means for FedEx and UPS
Amazon's move to provide shipping services to its business customers extends a trend at the e-commerce giant of subsidizing its operations by converting a cost center to a revenue source. For the first time, it puts Amazon in direct competition with key logistics providers FedEx, UPS and the U.S. Postal Service.
Why it Matters: Amazon has a history of disrupting incumbents’ billion-dollar categories (think: Amazon Web Services). Expect Delivery-as-a-Service (DAAS) to enter the e-commerce lexicon and shipping expenses to reduce their drain on the company’s earnings.