Will Amazon Fire UPS Over Christmas Catastrophe?

JL 0513

Well-Known Member
Amazon may have more revenue than UPS but it may be decades before Amazon makes more money than UPS, if ever.

And when they decide to raise their prices more in line with competitors, the growth will stop. Amazon may then even shrink. Their edge is under-cutting the competition's prices. Once that edge is gone, then there's other places to shop.

You could say their business model is phony in the name of growth. How far can it go?
 

Brownslave688

You want a toe? I can get you a toe.
And when they decide to raise their prices more in line with competitors, the growth will stop. Amazon may then even shrink. Their edge is under-cutting the completion's prices. Once that edge is gone, then there's other places to shop.

You could say their business model is phony in the name of growth. How far can it go?
Actually if you're willing to shop around you can find almost anything on amazon at equal or lower prices. What draws me to amazon and I would guess many others is 1 stop shopping. They have everything and I mean EVERYTHING.
 

JL 0513

Well-Known Member
Actually if you're willing to shop around you can find almost anything on amazon at equal or lower prices. What draws me to amazon and I would guess many others is 1 stop shopping. They have everything and I mean EVERYTHING.

That is true. It seems if it exists, it's on Amazon. And you go on their knowing that you'll find what you're looking for. That is their single greatest strength. But to continually succeed, they will need to offer the lowest possible prices, even if there's someone else that may match it. That lowest price though, makes no money.
 

BMWMC

B.C. boohoo buster.
UPS and Fedex make money on density. Amazon should take a lesson from DHL. Talk is cheap but actually putting buildings, machines, and manpower to work is another matter.
 
M

MenInBrown

Guest
Amazon just started selling in 1995 and look where they are. If you want to grow, you have to invest. That's why investors give them a free pass. It's because they see where the money is going and they are making all the right moves. Walmart started in 1962. Look how long it took them to become dominate and very very profitable.
 

UpstateNYUPSer(Ret)

Well-Known Member
Amazon just started selling in 1995 and look where they are. If you want to grow, you have to invest. That's why investors give them a free pass. It's because they see where the money is going and they are making all the right moves. Walmart started in 1962. Look how long it took them to become dominate and very very profitable.

...and how many casualties they left along the way...
 
Amazon just started selling in 1995 and look where they are. If you want to grow, you have to invest. That's why investors give them a free pass. It's because they see where the money is going and they are making all the right moves. Walmart started in 1962. Look how long it took them to become dominate and very very profitable.

They're accepting applications if you like the color of their grass better.
 

SignificantOwner

A Package Center Manager
Actually if you're willing to shop around you can find almost anything on amazon at equal or lower prices. What draws me to amazon and I would guess many others is 1 stop shopping. They have everything and I mean EVERYTHING.
Carrying everything makes Amazon a great haggling resource. I recently told a major tire store that I'd take four tires if they could get close to the Amazon price. They dropped their price close enough to Amazon's to make paying a little more for less hassle worth it. Saved $100, done in 1.5 hours. Thank you Amazon.
 

worldwide

Well-Known Member
UPS and Fedex make money on density. Amazon should take a lesson from DHL. Talk is cheap but actually putting buildings, machines, and manpower to work is another matter.

An interesting article in WIRED from Monday titled "Christmas Delivery Fiasco Shows Why Amazon Wants Its Own UPS"

Some highlights:

"Jeff Bezos’s wild plan to deliver packages using drones has been way overhyped. But grocery delivery service Amazon Fresh is very real. Amazon isn’t depending on UPS or any other delivery service to get heads of lettuce and bundles of carrots to your door. It’s using its own trucks, driven by its own employees (or contractors).

In the long term, it’s not hard to see the company combining its Locker program — which offers customers the option of having packages delivered to 7-Eleven stores and other public drop boxes — with its own shipping and logistics, eventually creating its very own alternative to UPS and FedEx.

Walmart already is headed that way with Walmart To Go, a same-day delivery service that leverages the company’s national logistics chain (but still relies on UPS for home delivery), and with its own grocery delivery service."

I'm not saying it will be easy or quick for them to do this but all signs point to Amazon having their own delivery vehicles at the expense of UPS and Fedex business. They don't have to deliver everywhere in the US - they can simply offer Amazon branded delivery in metro areas where density is the greatest and where the profit margin is greatest. In essence, they skim the cream and give the rest (suburban and rural) to Fedex, UPS and USPS. Sound familiar? It should, that is the exact strategy UPS and Fedex employ with SurePost and SmartPost.

http://www.wired.com/business/2013/12/amazon_ups/

Another good article on the subject can be found here:
http://www.dailyfinance.com/2013/12/31/amazons-gift-giving-and-future-delivery-potential/

"This is exactly why Amazon will eventually have its own delivery service. Sure, Amazon is helping out the United States Postal Service at the moment, but Amazon is not the kind of company that likes to rely on third parties. To understand companies like Amazon, Wal-Mart Stores , and Google, you must understand that their true long-term goals are to steamroll all competition and industry counterparts and to take over the world from a consumer standpoint.

Many people will say that Amazon isn't capable of building its own delivery system, but remember when every pundit on Wall Street thought Amazon would go bankrupt in the early 2000s? How about when many people felt as though AmazonFresh (food delivery service now available in select cities and growing) would never get off the ground?

The point here is that while it's OK to not bet with Jeff Bezos, you should never bet against him. If he sees an opportunity where he can keep more of his operation in-house, he will take advantage of it. And it will be as efficient as possible."
 

Returntosender

Well-Known Member
Amazon Bends Toward Profit
Wedbush says the site's higher fees for third parties are signs of leverage.
Amazon.com will increase the monthly fee and transaction fee its charges for webstores on Feb. 4. Fees are charged to third parties for the privilege of maintaining a store front that can be accessed via the Amazon.com website or for listing products on the Amazon.com website; many national and international brands maintain store fronts on the site, and countless private businesses sell goods listed on the site under "Selling on Amazon."http://online.barrons.com/article/SB50001424053111903675404579298403554496782.html
 
4

40andOut

Guest
Yep. They have created the world's largest shopping mall. They have many ways of increasing profit other than increasing the price of the products Amazon themselves sell. Since Amazon offers many of the same products these 3rd party sellers offer, this move increases revenue directly from fees...and also likely drives up the price the 3rd parties have to charge. So Amazon can raise their prices as well.
 

lawnphysics

UPS DRONE
Hey Guys,



If you don't want to read my introductory and just want to get to the point at hand skip down to the bold.

I live in a rural area. See this first part as my introductory post, I have a unique perspective on UPS. I started out as a customer. I had NO idea what a package went through to get to my door through any system. As most Americans I just assumed that it "just showed up," and I took the entire system for granted.

I became a driver helper for the driver who allowed me to meet him to pick up my business packages (I have since sold my business), who was in this area for around 12 years and recently took a new route. My business was ran out of my home, and I was the last road on his route.

I respected our driver, and I wanted to make his life easier. He is a good guy, my packages were usually in the middle of the aisle, in his way, and very bulky. Also, those packages were during your peak season, so he was happy to get them off his truck. I have stopped to meet the guys for lunch, ate lunch with them, listened to them talk shop, about their families, the stories the two guys who use to be in this area who retired last year and laughed, and I got to know them, and even during that time had no idea what the packages went through to get to my door, or my truck when I picked them up. I have met two supervisors from his center that I have the utmost respect for, and I have laughed with, and taken seriously everything they told me. I respect the safety point of view entirely, because I am still self-employed, can't afford to get hurt, and now my peak season isn't during the winter months so it works out well for me to work for UPS seasonally.

The guys around here are safe, and watch out for me, and I help watch out for them. It's just an all around, unique "family" to be a part of, and to be blunt it has been a blessing and an amazing learning experience for me. If I ever had the opportunity to work for UPS, or needed full time work I wouldn't hesitate to work at the center the drivers in my area are based out of.

I have always worked like a dog, have a unique business perspective and I have been told my work ethics are amazing. I am easy to get along with, to put it straight I am an old tobacco farm boy that knows what hard work is, a physics major graduate, tons of common sense. I am not tooting my own horn here. I am sure it sounds like it, however I am told I am like this by multiple people....So with the background, lets get to the topic of the actual thread.

I am amazed at what all the drivers go through with UPS. You guys are amazing, I learned this first hand. As a helper, and this is my second season that just ended, and many people may think I am crazy, but I look forward to doing it again for several years to come.

I was able to see thing through everyone's view, the customers, the drivers, management, the part time loaders that I worked with when we were moving pick ups from one truck to another, and I am grateful for the entire system, and in the process of my experiences I gained an amazing understanding of the whole thing.

Hands down, no one can compete with UPS. The Amazon drone model may work well in large metropolitan areas, but this is simply is not going to work in states like West Virginia, or even Kentucky, I would really like to see this tried in Alaska. Grizzly bear gobble the darn thing right up. So just take any rural area and it just simply will not work. Even though a drone can fly straight to my house as a crow flies, the time to navigate one package here is going to be strategically impossible.

Where I am located there are multiple packages on one truck in this area just from amazon, so I am sure this is repeated across the entire country, not just one route, so with that assumption...this means that no amount of drones or time, even working 24 hours per day, 7 days per week, will be able to match the UPS system. Maybe in 300-500 years, when star trek teleportation becomes feasible, if it even is feasible, but not as long as we are still burning fossil fuels (making a point, not saying we should stop burning fossil fuels).

Even if Amazon develops their OWN shipping network, the investment will take 100 plus years to pay off, and more than likely, once they get started, they will realize the HUGE mistake they made and their system will get gobbled up by UPS once they realize they just can not handle their own volume. It is one thing to manage an e-retail system and wrap packages up with pretty blue and black tape, and another all together to deliver the packages. Many companies have failed for diversifying too quickly, and having too many irons in the fire. Amazon should stick to what they are good at. Does Amazon really want the added liability and the extra insurance bill to boot? What about paying all the additional employees? I am all for the added jobs to our economy, but this isn't going to help the problem at hand. What would help is if Amazon, and other e-retailers would give incentives for ordering EARLY not at the LAST minute. UPS should also have a cut off date for Amazon at-least 4-7 days or so from December 24st it should be stated in the contract, on the websites, that no guarantees whatsoever for on-time delivery even for next day air except businesses or medical deliveries.

I believe, for now that this is a PR stunt. I think it is all smoke a mirrors. I see UPS and Amazon upper level management playing a smoke and mirrors game together, (in bed together so to speak), on their customers here, they know that the typical American has short term memories, they puff some magic smoke around saying they are going to fix things for a month or so, and then let it die out in the press, by the time next black Friday gets here, the majority of Americans won't even remember this being on the news , the customers who got burnt this year will probably order early on to avoid it next year. Lesson learned (hopefully).

Strategically, Amazon will have to account for the rolling terrain, power lines, high-tensile power lines) phone lines, customer flag poles, garden gnomes, expensive BMWs pets, birds, wind, snow, possible magnetic disturbances from the sun shutting down the entire GPS network. What happens if this does happen? How do they recover 100,000 drones when they all fall out of the sky at the same time due to solar flare activity? Are they going to have customers box them up and ship them back through UPS? Solar flares could easily happen, without notice. What a slap in the face when your delivery drone is being delivered back to you by UPS. It's laughable.



The sheer amount of variables that come into play to make this happen just doesn't work. What about computer hackers? They hack the system, fly the drone to some remote location and they get the package and steal the drone, drive off, no one to hold accountable, just gone. Its already been proven that no system is hack proof. We see privacy concerns every day. Take the recent Target Credit Card Theft.

The variables never end. What about the random redneck that's gonna shoot these things down just for fun/target practice. Once 20-30 of them are destroyed, so is a million dollars. You have these guys out there that are going to see them as NSA spy drones too that will take a shot at them. If you owned an insurance company would you insure these drones?

I live in an area that the brown trucks and guys are highly respected. They are friendly, wave at you, cautious on the road, know their customers. They do their job, and they do it well. This year my driver purchased lunch for me EVERY day this year, I never asked him to, had money to pay for my lunch, but he did it anyway, and I thanked him over and over this year. I worked like a dog for him, learned the board, learned how to leave delivery notices, pile numbers, learned how to sort the truck, I watched and learned he did. So I did everything I could to make his day easier.

I do think, however, that you guys (the union, and if not them, that UPS CEO and board), should seriously do something about this UPS Surepost thing. USPS is leaving packages with UPS logos on them and UPS tracking numbers on them on mailboxes, by the road, and in subdivisions on top of the brick mail posts, in the elements. This is bad business. It just looks bad, it doesn't matter that once the USPS has the package it's no longer a liability issue to UPS, the fact is several customers are going to see that tracking number and the familiar UPS shipping label and think you guys delivered it and left it there to be stolen.

Yelp, Surepost needs to go, one of the worst business decisions ever made by upper management in UPS.

I mention the USPS to say in regards to this Amazon drone post:

If UPS is already manhandling the USPS through their system, are you going to do it for Amazon too? That's where this is headed. UPS will be used by amazon to deliver their packages to their local delivery trucks/drones. They will use your distribution network to ship their packages to a local center and then their drones to deliver to the homes/businesses. Why would anyone at UPS, management drivers, part-timers, and helpers want this? It's less hours for you guys. The only people that benefit are OTR truck drivers and the UPS Air. It will just further burden and clog Louisville and other sorting facilities. If Amazon asked UPS to do this they should say no, because it is a conflict of interest, I see the USPS Surepost as a conflict of interest.


Back to being a customer for another 10 months, thanks guys for all the hard work. There are those of us out here that think the world of "the ole brown truck" as my Grandpa calls it.
 
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