Amazon is about to enter in the shipping service area. The company is about to finally launch its new shipping service for businesses in LA in the “coming weeks,” according to a new report from The Wall Street Journal. The service, called Shipping with Amazon or SWA, will directly complete with the likes of UPS and Fedex. The thing to keep in mind here is that it will initially be restricted to companies selling goods on Amazon’s own marketplace.
Amazon introducing such service shouldn’t come as a surprise, to say the least. For many years, the company has been building out its delivery infrastructure, expanding into ocean freight, leasing its own cargo planes, working on ways to deliver packages directly inside your house with Amazon Key, and even bringing drone delivery initiative to the table. Even though it’s been experimenting and seeing where it can really expand, the company isn’t exactly ready to go head-to-head with companies like UPS and Fedex, which spend billions every year upgrading their existing networks.
Since Amazon isn’t looking to compete with big names like UPS and Fedex just yet, that’s exactly the reason why it’s starting small by introducing Shipping with Amazon. The company has tested various pilot programs, including in London, and this initial launch will be limited to Los Angeles. The WSJ reports that Amazon plans to then “expand the service to more cities as soon as this year,” but fell short to provide a time-frame for expansion.
When looking deep into SWA, it reminds us a lot like what Amazon did with its hugely successful cloud computing business, AWS. With AWS, the company first built out infrastructure that serviced its own needs, and then once established, expanded the service by offering it to third parties. Seems like this is the same route that Amazon is looking to take with SWA. While there’s no guarantee that SWA will be as successful as AWS, it just goes to show that Amazon is going to with the tried-and-tested method.