Say Bye Bye to Amazon

vantexan

Well-Known Member
It could be that they're running trials in certain areas. FedEx has had stations trying out things in the past. Could explain why some areas have no Amazon while others are slammed.
 

dmac1

Well-Known Member
With more and more companies offering free delivery, even losing Amazon will not hurt volume. Both Target and Walmart push delivery heavily. Suit me fine. Amazon was getting complacent and raising prices over the last two years especially. Now you can get Walmart prices same as you would pay in store and get it delivered if you spend $35 at a time. But, if Bezos is up to really competing with Fedex and UPS, Amazon will offer discount delivery to places like Target and Walmart, and then Fedex will feel a slight sting. I am 100% positive that Bezos can beat fedex ground/HD with service at least as good.
 

BakerMayfield2018

Fight the power.
With more and more companies offering free delivery, even losing Amazon will not hurt volume. Both Target and Walmart push delivery heavily. Suit me fine. Amazon was getting complacent and raising prices over the last two years especially. Now you can get Walmart prices same as you would pay in store and get it delivered if you spend $35 at a time. But, if Bezos is up to really competing with Fedex and UPS, Amazon will offer discount delivery to places like Target and Walmart, and then Fedex will feel a slight sting. I am 100% positive that Bezos can beat fedex ground/HD with service at least as good.
I hate u, and I hate your mother
 

bacha29

Well-Known Member
With more and more companies offering free delivery, even losing Amazon will not hurt volume. Both Target and Walmart push delivery heavily. Suit me fine. Amazon was getting complacent and raising prices over the last two years especially. Now you can get Walmart prices same as you would pay in store and get it delivered if you spend $35 at a time. But, if Bezos is up to really competing with Fedex and UPS, Amazon will offer discount delivery to places like Target and Walmart, and then Fedex will feel a slight sting. I am 100% positive that Bezos can beat fedex ground/HD with service at least as good.
The deciding factor will be how cheap can they get people to work and who runs out of cheap labor first. From that standpoint it would appear that ground contractors are vulnerable . Granted, more so in some areas than others but they'll all begin to feel the effects eventually. And has been the case many times in the past the business will stop growing, start contracting and the transports will once again find itself with too much capacity on it's hands.
 

dmac1

Well-Known Member
The deciding factor will be how cheap can they get people to work and who runs out of cheap labor first. From that standpoint it would appear that ground contractors are vulnerable . Granted, more so in some areas than others but they'll all begin to feel the effects eventually. And has been the case many times in the past the business will stop growing, start contracting and the transports will once again find itself with too much capacity on it's hands.

The difference is that because Amazon is making money on the sale of the product they ship, they don't need to make as much profit on the shipping. Just a small amount of savings with millions of packages shipped can make a huge difference, It actually allows Amazon to pay more if needed to get drivers. If Amazon makes $1 on the sale, some of that profit can go into delivery operations. If they divert 2 cents to delivery operation, It makes a big difference in potential profit. For example, if profit is 7% of revenue, with costs being 93%, on a one dollar sale, fedex could make 7 cents. If costs are reduced 2%, or about 2 cents, profit would be 9 cents. Going from 7 cents profit to 9 cents profit is huge- a 30% increase in profit.

It works the other way too- If Amazon decides to only make 5 cents profit(actually savings vs shipping with fedex) from delivery per package instead of 7 cents, when added to their bottom line, the profit they make from the sale- maybe $1, is now $1.05 when you add in the profit(savings) from shipping the package. Even if Amazon has the same expense as fedex in delivering a package, their profit per sale goes up. They could use half of that extra profit to pay more than fedex does, and still make more money that if they use fedex to ship. They can pay more than fedex, AND increase profit over current levels. Amazon can take whatever profit fedex is making from them, and use even most of it to pay more, and still have a higher profit per sale that they do now. Bezos saw that as money he was wasting, and believes he can deliver his own package, for less than or equal to whart fedex charges.

And there are other savings on shipping vs fedex. Right now, fedex picks up a package from a small Amazon shipper, brings it to the terminal, where it is sorted, and generally goes to some hub, then gets sent to the delivery hub. If an Amazon driver picks up from the small shipper, instead of paying a profit to fedex, Bezos keep the profit, even if it costs the same to pick it up, maybe even if it costs a little more to pick it up. Saving 3-4 cents per dollar on the pickup cost, and another 3'4 cents on the delivery end, suddenly increase his bottom line by a lot, even if his costs for picking up and delivering are the same. So Bezos can pay more, and still make more money than he is now per sale, without a doubt.

And I believe the ADPs will have lower expenses, and could be more productive. Fedex ground ICs need to be able to handle oversize and heavy packages. Amazon delivers a higher percentage of smaller package. That makes the Amazon drivers' jobs easier. And because Amazon is mostly residential, that makes their jobs easier. I know it was always easier to deliver to a residence than a business. So Amazon drivers have the potential to be more productive, increasing what they can earn without even costing more. Add that in, and potentially an ADP can make a lot more money, especially when measured against investment. And a real business is measured by ROI, not just by gross profit, or even net profit. I'd rather make $50k per year with a $10k investment vs $60k per year with a $300k investment. You would have $290k left over to make another investment, netting you a much higher return overall.

And because Amazon is contracting for delivery, like ground, they don't care about having too much delivery capacity.
 

bacha29

Well-Known Member
The difference is that because Amazon is making money on the sale of the product they ship, they don't need to make as much profit on the shipping. Just a small amount of savings with millions of packages shipped can make a huge difference, It actually allows Amazon to pay more if needed to get drivers. If Amazon makes $1 on the sale, some of that profit can go into delivery operations. If they divert 2 cents to delivery operation, It makes a big difference in potential profit. For example, if profit is 7% of revenue, with costs being 93%, on a one dollar sale, fedex could make 7 cents. If costs are reduced 2%, or about 2 cents, profit would be 9 cents. Going from 7 cents profit to 9 cents profit is huge- a 30% increase in profit.

It works the other way too- If Amazon decides to only make 5 cents profit(actually savings vs shipping with fedex) from delivery per package instead of 7 cents, when added to their bottom line, the profit they make from the sale- maybe $1, is now $1.05 when you add in the profit(savings) from shipping the package. Even if Amazon has the same expense as fedex in delivering a package, their profit per sale goes up. They could use half of that extra profit to pay more than fedex does, and still make more money that if they use fedex to ship. They can pay more than fedex, AND increase profit over current levels. Amazon can take whatever profit fedex is making from them, and use even most of it to pay more, and still have a higher profit per sale that they do now. Bezos saw that as money he was wasting, and believes he can deliver his own package, for less than or equal to whart fedex charges.

And there are other savings on shipping vs fedex. Right now, fedex picks up a package from a small Amazon shipper, brings it to the terminal, where it is sorted, and generally goes to some hub, then gets sent to the delivery hub. If an Amazon driver picks up from the small shipper, instead of paying a profit to fedex, Bezos keep the profit, even if it costs the same to pick it up, maybe even if it costs a little more to pick it up. Saving 3-4 cents per dollar on the pickup cost, and another 3'4 cents on the delivery end, suddenly increase his bottom line by a lot, even if his costs for picking up and delivering are the same. So Bezos can pay more, and still make more money than he is now per sale, without a doubt.

And I believe the ADPs will have lower expenses, and could be more productive. Fedex ground ICs need to be able to handle oversize and heavy packages. Amazon delivers a higher percentage of smaller package. That makes the Amazon drivers' jobs easier. And because Amazon is mostly residential, that makes their jobs easier. I know it was always easier to deliver to a residence than a business. So Amazon drivers have the potential to be more productive, increasing what they can earn without even costing more. Add that in, and potentially an ADP can make a lot more money, especially when measured against investment. And a real business is measured by ROI, not just by gross profit, or even net profit. I'd rather make $50k per year with a $10k investment vs $60k per year with a $300k investment. You would have $290k left over to make another investment, netting you a much higher return overall.

And because Amazon is contracting for delivery, like ground, they don't care about having too much delivery capacity.
Can't be all that great given that Bezos is offering warehouse level employees 10K in cash , financing and 3 months salary if they'll start up their own tr:censored2: business.
 

Operational needs

Virescit Vulnere Virtus
I was talking to a manager and he said the Amazon contract was not renewed and after June 30 Fedex Express will not be delivering Amazon. I didn’t think to ask him about Ground.
 
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