Let's merge with QVC and crush Amazon!

[purplesky]

To me this seems a crazy idea. All UPS needs to do is make a phone call to Amazon and let them know that unless they cease and desist, the discount shipping will end immediately. At that point, UPS does two things: they effectively end Amazon's ability to invest in their own transportation wing and UPS suddenly makes a far greater profit per package. And while some of that volume may be diverted to FDX, I think it's safe to say that they will limit Amazon's diversion. Amazon isn't the lucrative accounts some people think they are. They are ferocious negotiators and ridiculously demanding. High maintenance, low profit. FDX isn't going to blow up their operations for them.

I agree it is kind of crazy. But Amazons dream of becoming an actual delivery company(is more crazy) with a NATIONWIDE DELIVERY NETWORK would be a game-changer for UPS and FDX.
I don't see Amazon pulling this off anytime soon because their investors are getting tired of no profits and just big spending with no returns on investment.

The amount of volume UPS and FDX move for Amazon(especially during peak) is huge so it is hard to imagine Amazon ever pulling this off as they continue to grow each year.

The irony in all this is that Amazons success and fast growth are due in large part to UPS mostly and also FDX.

 

[bbsam]

I agree it is kind of crazy. But Amazons dream of becoming an actual delivery company(is more crazy) with a NATIONWIDE DELIVERY NETWORK would be a game-changer for UPS and FDX.
I don't see Amazon pulling this off anytime soon because their investors are getting tired of no profits and just big spending with no returns on investment.

The amount of volume UPS and FDX move for Amazon(especially during peak) is huge so it is hard to imagine Amazon ever pulling this off as they continue to grow each year.

The irony in all this is that Amazons success and fast growth are due in large part to UPS mostly and also FDX.

But Amazon's dream comes to an immediate rude awakening as soon as UPS and FDX nullify the cut rate deals they have with Amazon. No need to spend billions to try to imitate Amazon.

 

[purplesky]

But Amazon's dream comes to an immediate rude awakening as soon as UPS and FDX nullify the cut rate deals they have with Amazon. No need to spend billions to try to imitate Amazon.

Apparently the cut rate shipping costs that Amazon supposedly gets now from UPS and FDX isn't allowing them room to make profits?

So they will definitely try and deliver on their own. UPS and FDX will be watching closely. So will Wallstreet.

 

[bbsam]

Apparently the cut rate shipping costs that Amazon supposedly gets now from UPS and FDX isn't allowing them room to make profits?

So they will definitely try and deliver on their own. UPS and FDX will be watching closely. So will Wallstreet.

but eliminating those discounts--not only do they lose more money, they also find it harder to find investors interested in their delivery aspirations.

 

[UpstateNYUPSer(Ret)]

The highest discount out of my center is in the 30% range with no weekly pickup charge. I would have to think Amazon is closer to 50%, if not more. Bringing their discount more in line with other major shippers would send them the message to "leave the driving to us".


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[TooTechie]

I don't see Amazon pulling this off anytime soon because their investors are getting tired of no profits and just big spending with no returns on investment.

They had net income of $108 Million last quarter so they made a profit, however the sad part is they had just shy of 20 Billion with a B in revenue (19.74) Operating expenses were 19.6 Billion.

Amazon makes a ridiculous amount of money. The problem is it's leadership goes through it like water. Their CEO is too quick to spend.

The all you can eat free shipping for a fixed annual fee is a flawed model. While some people may not order enough, others definitely hit them hard. They need to get rid of that and get rid of the free shipping gimmick if your order is over x (while building it into the price) and just show the price for what it is and the shipping price for what it is and let consumers vote with their dollars.

 

[beentheredonethat]

The Amazon Prime is a great model (free shipping with an annual subscription). This gimmick allows people to shop amazon more (studies have shown this). Also, if you look they charge amazon prime items usually higher then if it isn't via amazon prime. In essence they charge you an annual fee for "free shipping" then they charge you extra in the item cost to cover shipping. Brilliant.

 

[beentheredonethat]

The highest discount out of my center is in the 30% range with no weekly pickup charge. I would have to think Amazon is closer to 50%, if not more. Bringing their discount more in line with other major shippers would send them the message to "leave the driving to us".


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Most of the people at companies (similar to amazon or other top shippers) don't know what they get for pricing. Most UPS'ers don't know what these large shippers get for pricing. 30% discounts are relatively small.

 

[purplesky]

but eliminating those discounts--not only do they lose more money, they also find it harder to find investors interested in their delivery aspirations.

Amazon is for now really targeting competitors like Walmart and Target and Best Buy that have actual stores, With this same day delivery concept.

So right now Amazons delivery service plan threatens their retail competitors more than UPS and FDX for now.

But Wall street anaysts have recognized that Amazon could eventually END UP building a network of delivery warehouses nationwide and deliver a very high percentage of orders on their own at a lower cost.

So over a 5 to 10 year period its possible Amazon could really start to push UPS and FDX out of the picture. Not completely but IT WOULD BECOME A GAME CHANGER FOR AMAZON.

So who knows how this will play out?

 

[UpstateNYUPSer(Ret)]

Amazon is for now really targeting competitors like Walmart and Target and Best Buy that have actual stores, With this same day delivery concept.

The big box stores are fighting back by matching prices, including those on Amazon.

 

[upschuck]

The highest discount out of my center is in the 30% range with no weekly pickup charge. I would have to think Amazon is closer to 50%, if not more. Bringing their discount more in line with other major shippers would send them the message to "leave the driving to us".

I have talked to BD about this before, and they have told me that everyone, even Amazon, pays a weekly charge. Maybe small, but they pay one.

 

[beentheredonethat]

I have talked to BD about this before, and they have told me that everyone, even Amazon, pays a weekly charge. Maybe small, but they pay one.

I'm sure for customers who deal with the local district AE's this is true. But for the large enterprise accounts, fees like this are waived. It's a whole different pricing structure for the big shippers.

 

[rod]

The incentive to order from Amazon because you don't have to pay state sales taxes is going away fast. They are not so much cheaper anymore. My Amazon shopping has decreased considerably since Minnesota joined the ranks of states who want their sales taxes collected by Amazon. Target will match prices with them if you ask.

 

[UpstateNYUPSer(Ret)]

I have talked to BD about this before, and they have told me that everyone, even Amazon, pays a weekly charge. Maybe small, but they pay one.

The weekly fee is waived for our largest shippers.

 

[upschuck]

The weekly fee is waived for our largest shippers.

You are wrong. Reconfirmed.

 

[cosmo1]

You are wrong. Reconfirmed.

Why must you argue with Dave?

 

[upschuck]

Why must you argue with Dave?

He doesn't like inaccuracies. That is why must.

 

[beentheredonethat]

You are wrong. Reconfirmed.

Sorry to tell you, Dave is right. Large shippers do not pay those types of fees. I have two very large shippers I deal with and both are near the $100 million range, they don't pay those fees. As I said earlier, for local district accounts that the sales folks deal with do pay those fees probably 99.999999% of time. But enterprise accounts are a different story.

 

[upschuck]

Sorry to tell you, Dave is right. Large shippers do not pay those types of fees. I have two very large shippers I deal with and both are near the $100 million range, they don't pay those fees. As I said earlier, for local district accounts that the sales folks deal with do pay those fees probably 99.999999% of time. But enterprise accounts are a different story.

Amazon does. Is that big enough for you.

 

[beentheredonethat]

I don't know Amazon specifically. But I know a few companies that are smaller then amazon and they don't pay. Have you physically seen an amazon bill? Has the person you are basing this info on? I'm guessing the answer is no. I've seen the bills for other large customers.