Delivery company shares for FedEx and UPS dropped Thursday morning after it was revealed that Amazon is reportedly testing a new delivery service where they will distribute third-party sellers’ products directly to consumers.
The new experiment is intended to make more products available for free-two day shipping and relieve overcrowding in its warehouses, Bloomberg reported.
With the new project, which is called Seller Flex, Amazon will seemingly take over functions that are handled by their longtime partners UPS and FedEx, according to two sources familiar with the project who spoke under the condition of anonymity to Bloomberg.
Shares of FedEx fell 2.2 per cent to $216 while UPS shares fell 3.3 per cent to $116.40 in Thursday’s premarket session. As of 10am ET, shares for Amazon were up 7.3 per cent at $973.38.
Amazon is currently testing a new delivery service where they will deliver third-party sellers’ products directly to consumers (file above)
Delivery company shares for FedEx (file above) and UPS dropped Thursday morning after the latest news with Amazon was revealed in a Bloomberg report
Seller Flex reportedly started in India about two years ago and the online retailer is slowly marketing it to U.S. merchants and plans to expand nationally.
The two sources with company told Bloomberg the project began on the West Coast as a trial and a broader rollout being planned for 2018. Amazon would not comment about the project.
Under Seller Flex, the popular online retailer will pickup packages from third-party merchants’ warehouses and then deliver the products straight to customers’ homes, cutting out FedEx and UPS services, the two sources said.
The company could still use FedEx and UPS for delivery, but it will be decided by Amazon how a parcel will be sent instead of leaving the choice up to the seller.
As of 10am ET, shares for Amazon were up 7.3 per cent at $973.38.
With the new project, which is called Seller Flex, Amazon will seemingly take over functions that are handled by their longtime partners UPS (file above) and FedEx, according to two sources familiar with the project who spoke under the condition of anonymity to Bloomberg
With the option of handling more deliveries on their own, that would provide Amazon more flexibility and control while allowing the company to save money.
On Wednesday, it was revealed that they company has plans for a huge expansion in Seattle.
That news comes less than a month after Amazon announced it was looking for a second headquarters in North America.
The company confirmed on Tuesday that it signed a lease for the entire office portion of a planned downtown skyscraper that will become the second-tallest building in the Pacific Northwest, the Seattle Times reports.
The two sources with company told Bloomberg the project began on the West Coast as a trial and a broader rollout being planned for 2018. Amazon (file above) would not comment about the project
The new 58-story tower called Rainier Square will also include 200 luxury apartments, retail and an adjacent luxury hotel.
The skyscraper will be among the company’s biggest office buildings when it opens in three years, with room for more than 3,500 additional employees.
Last month, Amazon said it will spend more than $5billion to build another headquarters in North America to house as many as 50,000 employees outside its hometown of Seattle.
The news that Amazon was looking beyond Seattle prompted local business and city officials to worry the company might lessen its commitment to the region, and has city and state leaders around the country lining up to try to lure the jobs and benefits of the headquarters.
Amazon confirmed on Tuesday that it has signed a lease for the entire office portion of a planned downtown skyscraper called Rainier Square. It will also include 200 luxury apartments, retail and an adjacent luxury hotel