Amazon has decided to expand the growth of its business by providing access to its supply chain network to other businesses.
The tech giant’s “Amazon Supply Chain Services” will allow companies in industries like retail, healthcare and manufacturing to use its supply chain network to move, store and distribute everything from raw materials to final products.
Amazon has helmed the digital e-commerce giant’s operations for decades, pitting it directly against logistics heavyweights like UPS and FedEx to spur new growth.
By opening up the service that has also supported thousands of independent third-party sellers around the world, e-retailer Amazon is tapping a new growth opportunity for its e-commerce unit.
Amazon’s fleet includes more than 100 cargo planes and a vast network of warehouses and sorting hubs that could make it a major player in an industry long dominated by FedEx and UPS, potentially intensifying competition on pricing and speed.
The e-commerce platform also offers delivery, fulfillment, and parcel shipping services, allowing companies to take advantage of its quick two-to-five-day delivery timelines and warehousing and inventory forecasting capabilities.
The news came after shares of FedEx and UPS fell 1.8% and 1.5%, respectively, in premarket trading.
Companies can use these solutions across all their sales channels, including their website, social media channels, and physical stores.
Amazon said consumer goods major Procter & Gamble, industrial heavyweight 3M and apparel firm American Eagle Outfitters have already signed up for supply chain services.
The move also takes a leaf out of the playbook of Amazon’s cloud computing unit — Amazon Web Services was launched in 2006 to revamp the company’s own IT infrastructure, and it later grew into the world’s largest cloud services provider.
