Shipping by Amazon may cause over half of sellers to switch

Dive Brief:

Amazon is about to launch its new shipping service for Amazon Marketplace retailers, Shipping with Amazon, and the majority of sellers polled said they trust Amazon to deliver orders and would switch from current carriers at the right price, according to Internet Retailer Research.
Over half (57%) of respondents strongly agree (27%) or agree (30%) with the statement: "I would trust Amazon to deliver products to my customers," while 23% said they strongly disagree (12%) or disagree (11%). Only 20% said they neither agree nor disagree.
More than half (55%) said they would consider switching carriers, while 20% said they would not, and 24% said they didn't know if they would. Price is the most important factor in choosing a delivery carrier, according to 66% of respondents, while 30% prefer reliability and 4% touted quality customer service. On price, 55% of respondents said Amazon's fees would have to be 10% to 20% lower to consider switching, while 21% said they would consider a switch if the price was 1% to 9% lower. A small amount (8%) said they'd consider a switch with no savings and 12% would not consider switching.

Dive Insight:

After upending e-commerce and retailing in general, Amazon has set its sights on the logistics world, and carriers like FedEx, UPS and the United States Postal Service are not happy. Amazon's new shipping service for Amazon Marketplace retailers will launch in a few weeks in the Los Angeles market, and a new survey of the sellers shows most are looking forward to it.

This will be a major step in Amazon's efforts to control its logistics operations and lower costs for its Marketplace third-party clients, as well as for the company as a whole. Plans are in the works to expand the service to other cities and businesses very soon, reported the Wall Street Journal.

What will happen to the other carriers? FedEx and UPS saw their stock shares drop when the news was announced earlier this month. Both are in the private sector and have more options than USPS, which depends on the Federal government and current political winds, which at present are not favorable. However, the Post Office has the widest reach of the three carriers and would be the hardest to replace. Local online discussion boards often mention reports of third-party Amazon contractors giving home-delivered packages rough treatment, sometimes with video.

But retailer comments on the survey indicate that they're eager to try out Shipping with Amazon:

"For survival we are embracing anything that strengthens our value in the changing distribution channels. Amazon does everything well and we would trust them to do it better than UPS and FedEx," one post read, from Terry Beasecker, a marketing manager at Mor Electric Heating Association.