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Amazon Wants to Compete with FedEx and UPS, Sets Up Trial Run For Their Own Exclusive Delivery Service in LA

Amazon will begin to ship its own products for businesses in Los Angeles in the “coming weeks,” according to a report from The Wall Street Journal.

The company named their service Shipping with Amazon (SWA), and they desire to compete with rival companies FedEx and UPS. As it rolls out, it will only be allowed to ship Amazon marketplace goods only.

Amazon kept SWA under wraps for years; they’ve been building a delivery system for quite some time. The e-commerce giant began expansion into ocean freight, leased cargo planes and developed services like Amazon Key. Key allows for delivery inside the home, an idea which, until it was released, was unheard of. Despite their advancements, Amazon was still not ready to go against the top delivery businesses, who spend billions on upgrading their established networks.

Amazon starting off small with SWA is best for their business. They began testing in pilot programs in select cities, like London. The next launch will focus only on Los Angeles. The WSJ reports that Amazon plans to then “expand the service to more cities as soon as this year,” but doesn’t have a time-frame for doing so. Amazon operates in 37 American cities with small operation techniques. However, they continue to rely on the U.S. Postal Service when necessary.

SWA follows the business model of Amazon’s cloud computing business, AWS. The company built the infrastructure for its own needs and then sold the tools to third parties. This idea could be useful when considering SWA.

Amazon will continue to try the method and see if success is viable. FedEx and UPS might want to pay attention here because business is about to pick up.

[via The Verge]

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