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If Amazon Breaks, Everything’s Broken
With people not leaving their homes in the face of the Coronavirus, you’d expect sales to be booming for the home delivery behemoth…
And they are. So what’s the problem?
The company that’s far and away the best in the history of the world at logistics, all of a sudden can’t keep up.
So it’s changing its business in a way that could have far-reaching consequences. Specifically, what Amazon’s doing right now in addition to trying to hire a whole bunch of new people all at once, is limiting access to businesses that fulfill through Amazon. That is, 3rd party companies that typically deliver product they sell through Amazon to Amazon, and then Amazon turns around and ships it out, for a fee. In many cases these 3rd party sellers have been incentivized (some might even say forced) by Amazon to use Amazon, and not having access may mean losing a lot or most of their business. Amazon says those businesses will for now have to store and ship their product on their own, which many businesses are no longer equipped to do, and this is hardly a time to ramp that up.
And this doesn’t represent just a small slice of Amazon’s business: 3rd party sales are about half.
