3 ms·

Amazon has the leverage

• aaomidi 6y ago
  That doesn't really make sense to me.
• soganess 6y ago
  Do they? If what is being said is actually true, then amazon doesn't have any leverage at all. (again if what is being argued is true) These last mile providers might be taking a small hit to deliver amazon packages, so why deliver them at all? If you answer is: "if they don't deliver these they won't get amazon's business." It would appear they are not getting any of amazon's profitable business (2/3 of delivers), so who cares about getting amazon's crap business?
  • charwalker 6y ago
    It's more that Amazon packages can comprise such a a large % of deliveries/orders that the UPS/etc may need to keep that business, even at near 0 profit, to keep their infrastructure above water. That contract possibly covers a ton of last mile region they want to cover anyway to stay competitive but couldn't keep going due to lack of volume vs cost without Amazon. It's a bit of a catch-22, they can reform their route and coverage to similarly profitable state with less coverage, potentially dooming them in the long run, or they can take the near 0 profit contract from Amazon and stay competitive while having almost no cards at the negotiation table. Amazon knows their business is huge and needed by these groups and is not afraid to point that out.
    • deleted 6y ago
      [deleted]
• atwebb 6y ago
  FDX booted them last year, their stock is way up now...there's a whole lot more to ecommerce than Amazon (though admittedly they are a huge piece).