Because FedEx isn't a retailer itself, its fulfillment program may be more appealing to customers than Amazon Marketplace, which sometimes becomes competitive with the people it serves.
For the last several months, when we’ve mentioned Amazon and FedEx in the same sentence, it’s been to report on how the online retail company has been encroaching upon the shipment firm’s space. After all, Amazon now has its own fleet of airplanes, ships, and more. But now the tables are making a bit of a turn. Earlier this week, FedEx announced the launch of FedEx Fulfillment, a new network geared towards small and medium-sized businesses that will allow them to store their goods at FedEx warehouses across the United States and Canada. The global shipment company then sends packages off to their final destinations when customers place orders.
Rather than making their way into the world in FedEx-branded boxes, the company is instead offering participants in FedEx Fulfillment the option to use custom boxes branded with unique logos. This might help FedEx to become increasingly competitive in its ongoing battle with the digital retailer.
Notably, the main component of the new program — storage in FedEx warehouses — is something Amazon has been doing for nearly two decades. In fact, Amazon has made it possible for sellers to not only sell their goods via Amazon Marketplace, but also store them in Amazon warehouses since 2000. It’s convenient for sellers, but also a great money-maker for Amazon, which gets a percentage of every sale. And aside from that immediate product, it gives the Seattle-based company information on what products are most popular, helping it make decisions when it comes to stocking its own goods (and thereby competing with the small businesses on its Marketplace).
And its this particular pitfall that small retailers can avoid with FedEx. “We’re focused on the retailer, and doing what’s right for the retailer, in helping them grow their business,” Ryan Kelly, senior vice president of FedEx Supply Chain, told CNNTech. “I think that is differentiated in the marketplace. It’s why we’re getting such great feedback.” FedEx already has a pilot program up and running with some businesses, and has modified its 130 or so warehouses throughout North America to allow for the storage of customer goods.