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Amazon trialing new delivery system that makes FedEx and UPS obsolete

Amazon is testing a new delivery option for third-party sellers, which would increase Amazon’s role in the logistics chain at the expense of UPS and FedEx, its long-time shipping partners. The news comes courtesy of a Bloomberg report, and marks a big step up in where Amazon wants to position itself between buyers and sellers.

The report says that Amazon is trialing a new delivery service, called Seller Flex, with merchants on the West Coast. It involves Amazon picking up products from third-party sellers and shipping them to customers, rather than having third-party sellers handle the entire shipping process themselves.

Currently, third-party sellers on Amazon — people who use Amazon’s website to sell, but don’t store products in an Amazon warehouse — handle their shipping themselves, using Amazon’s tools with UPS and FedEx to ship products. Under the Seller Flex program, Amazon decides how products will be shipped, and handles the logistics chain from warehouse to customer. FedEx or UPS couriers might still be doing the actual delivering, but Amazon’s calling the shots.

The big benefit for consumers is that Seller Flex will enable more products to be eligible for 2-day Prime shipping, which has obvious benefits for Amazon. It also increases Amazon’s role in the decision-making chain, and downgrades FedEx and UPS from all-knowing logistics companies to a glorified courier service.