From 2005 onwards, Amazon delivered products to its customers via its delivery service appropriately titled: Amazon Logistics. The service started as an experiment more than 10-years ago, within San Francisco, Los Angeles, and New York City, but it has grown to virtually every major city across the US. In addition, it is now accessible across Canada, the UK, Germany, Spain, Italy, Ireland, Brazil, and India.
With more than 1.1 million people handling orders and more than 175 fulfillment centers operating worldwide, Amazon Logistics rivals some of the biggest delivery service providers like UPS or FedEx.
Here detailed video on how Amazon is quietly shipping non-Amazon orders to compete with FedEx, UPS and can become a global leader in logistics
What is Amazon Logistics?
Amazon Logistics is a popular shipping and delivery service that complements existing service providers like FedEx, and UPS.
In simple terms, Amazon Logistics is more than a “last mile” shipping & delivery service that gets packages delivered to customers. This means that it performs the same as postal services nationwide, such as Royal Mail, USPS, and commercial carriers like UPS & FedEx.
But, Amazon Logistics LLC isn’t a major corporation like FedEx. Instead, it’s a marketplace driven by technology or network, much like Uber and Uber, where Amazon is the primary buyer of delivery services. In contrast, individual delivery companies and independent individuals are the sellers.
“Capacity” of delivery is provided by:
- Individual drivers who utilize Amazon Flex for delivery of packages (for an amount of time) at any time they wish to. It’s more similar to what Uber calls the “gig economy” model of Uber.
- Independent delivery services often referred to as Amazon DSPs (Delivery Service Partners) with their vans and fully employed drivers deliver Amazon’s shipments to Amazon every day.
Note: Both the above delivery options (individual drivers and Independent delivery service) are not Amazon’s employees. They are bound by Amazon’s contract and work to their standards, but they are more flexible.
The program provides two delivery choices:
- Same-day
- 7-day
There are “individual drivers” and 3rd-party logistics providers are distributed all over the United States to make things happen. This includes bicyclists, walkers, and motorcyclists in specific areas. Amazon has some rules regarding third-party suppliers (regarding the size of vehicles and licensing insurance, and safety-related training). However, it is important to be aware that they’re not Amazon employees.
How Does Amazon Logistics Work?
Deliveries are provided 365 days a year and 7 days a week, all through the day, including early mornings and late nights, which is perfect when packages require a signature. Delivery drivers are considered third-party service providers contracted by Amazon.
The most fundamental requirements for becoming DSP are: DSP are:
- A minimum of $10,000 in investment
- Responsible for recruiting and developing the team
- Supervising the up to 100 staff and 40 vans
- ensuring that the delivery of packages is guaranteed seven days a month and every day of the year
If you start with $10,000, Amazon projects that DSPs operating with 20-40 vans could have annual revenues of between $1M and $4.5M and earnings between $75K to $300K.
What Amazon Logistics Means for Third-Party Sellers
The number of delivery stations, warehouses, and drivers Amazon utilizes to manage shipments has doubled by 2020, increasing delivery speeds and reducing fuel costs. Let’s break it all down and see how it can benefit you as a seller.
Deliveries made by Amazon Logistics appear in tracking as AMZL. If the delivery takes place in the United States, it is called AMZL_US.
Deliveries with this label are delivered to a particular sorting facility where DSPs can pick up packages from a nearby facility and then deliver the goods to the customers.
Amazon offers drivers mobile applications and software that they can use to plan their routes, get instructions for routes, and provide customer service.
Amazon Logistics relies on third-party service providers, so the quality of service provided is different from one DSP to the next. However, the providers such as FedEx, UPS, and USPS provide a standard of service that most customers can count on.
However, the Amazon Logistics delivery experience can indeed be unpredictable, which is why this service could be problematic for sellers who sell through third parties. In addition, the experiences of shoppers using Logistics have been mixed to put it in a nutshell with a range of extreme to extremely disappointing experiences.
How Amazon logistics carrier is different from conventional carriers?
Many delivery companies are regarded as steady, reliable, and slow to shift. It is possible for these companies to:
- Send packages during normal working hours
- Send packages on normal business days
- Only deliver if the recipient agrees to the package
- Put security ahead of comfort
Amazon Logistics inquires about these rules to ensure they do not break these conventions. For example, certain of these services could be unprofessional or inefficient compared with other delivery services.
But, the same methods generally are more popular with customers that include:
- Deliveries are made on weekends, in the late into the evening, and on holidays
- Option to give orders with neighbors so that they can be sure your package will be “safe” rather than leaving it at the door unattended
- Do not require signatures for the delivery.
How To Minimize The Risks Of Amazon Logistics?
Be aware that your reputation, as well as sales, are at risk. So, the ideal strategy should be as efficient as possible, starting from the moment you make a sale until delivery.
- Set up a well-automated messaging system for soliciting feedback from the seller following the time the customer has received the product. When an order is declared “delivered,” generate that message!
- Make sure that your customers have a variety of ways to contact you. If they understand that you’re always available to help them in case of issues with shipping or poor service, the seller’s incompetence should not be the reason. Provide them with multiple links to track, such as Amazon’s storefront link or review link, and so on.
- To reduce the importance of Amazon Logistics as the customers’ most disliked shipping method, consider calling customer support. This could lead customers to different shipping methods.
Innovations in Amazon Logistics
Although the service provided by Amazon isn’t ideal, the latest technologies are providing them with an advantage over their rivals.
- Amazon’s Cargo Airline. Amazon is currently working on its drone delivery service, named Amazon Prime Air, to deliver packages to customers within thirty minutes or less. Additionally, Amazon contracted to lease twelve Boeing 767-300 cargo planes to bring its fleet total to over 80 aircraft.
- Amazon Flex. The service is an Uber-like service that makes use of contract drivers to deliver products to consumers.
- Metro Markets. Amazon Prime members are entitled to the same-day delivery service for free, as Amazon extends its delivery services to more than 75 US metro areas.
- Air Traffic Control Software. Amazon is building an exclusive software for drones to integrate it into the aviation traffic management system going forward.
- Parachute Deliveries. Yes, you heard right, parachute! This is the way Amazon intends to transport the drones that deliver packages to its customers.
- Underground Deliveries. Amazon is developing tunnels beneath the earth for the transportation of containers and parcels.
- Delivery with voice assistants. Prime subscribers can now place orders through Prime Now and alcohol-delivery service with the help of voice search, available through Alexa.
- Self-driving cars. This new technology allows you to safely deliver Amazon orders to your customers using driverless vehicles.
Pros and Cons of Amazon Logistics
As a coin does have two sides like a coin, the Amazon Logistics program also has advantages and disadvantages:
Pros
Orders from customers are shipped more quickly. Actually, alternatives like same-day delivery or even two-hour delivery are also offered in certain areas.
Amazon has updated its map tracking that allows customers to keep track of their purchases. A photo confirmation option has been added to make sure that the parcel arrives.
Amazon Logistics also keeps up with the demands during peak and seasonal volumes of shipping. This prevents overcrowding in Amazon warehouses.
Cons
The seller cannot choose the delivery service provider who will deliver his orders; therefore, if there’s had a negative experience with one particular service provider, that is likely to occur again.
Delivery that is delayed or handled poorly could result in bad reviews about any vendor. This could affect his sales in a significant way.
The sellers do not have the power to control Amazon Logistics. Additionally, sellers aren’t able to provide any advice or tips to improve the process of shipping.
Amazon continues to provide the most efficient eCommerce services to consumers. And with Amazon Logistics is building a bigger and more extensive shipping network.
Conclusion
It’s evident that Amazon is expected to become the most popular platform for fulfillment services for the foreseeable future. Therefore as a seller, it is essential to stay up to date with the latest products and the best practices to ensure that your customers receive what they purchase quickly.
With their increased emphasis on logistics and third-party shipping, it is essential to help your customers manage, place their orders, and keep track of their purchases. Providing consistent delivery and knowing exactly how the Amazon logistics system functions could mean the difference between satisfied and dissatisfied customers.
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