Lower costs give Amazon an advantage over FedEx when it comes to fulfillment — in part because Amazon does not offer drivers benefits like health care or paternity leave, professor Scott Galloway says. (hereandnow)
Amazon blocked its third-party sellers from using FedEx a few weeks before Christmas — ahead of the busy holiday season.Scott Galloway
He says Amazon’s attempts to use fulfillment to establish greater loyalty with its Prime customers means FedEx is being “featurized” — a term he uses to describe when a high-margin, scalable business invests in a low-margin, difficult business as an in-house component. “To be blunt, fulfillment and delivery is all about trust,” he says. “And the most trusted brand in the world right now is Amazon.”
This phenomenon gives Amazon an advantage because it decreases their cost of capital and enables them to “make their own future by massively investing in that category to the extent that other players can't invest,” he says.annually in the U.S. — compared to 3 billion for FedEx and 4.7 billion for UPS, according to Morgan Stanley estimates.
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