AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Mon June 24 2019 23:34:13

Amazon Reacts to Reports of FedEx Price Slashing

By: Ina Steiner

Sponsored Link

Amazon played it cool when word leaked out 2 weeks ago that FedEx would not be renewing its contract for Express air delivery. "We respect FedEx's decision and thank them for their role serving Amazon customers over the years," Amazon told us at the time.

But today, an Amazon executive was more expressive upon reading reports that FedEx was slashing prices on Express air service to certain large customers.

In "FedEx Slashes Prices to Fill Its Planes," the Wall Street Journal (via Marketwatch) said FedEx was offering two-day air for the same price as ground service, "hoping to lure customers from UPS and boost flagging Express network," citing unnamed sources.

In response, Amazon Senior Vice President of Worldwide Operations Dave Clark responded on Twitter with head-slap and shoulder-shrug emojis. Could the snarky tweet indicate Amazon was not as happy with the contract termination than it had initially led on?

Either way, online sellers will probably be doing some head-slapping of their own. If larger merchants get reduced prices for 2-day air delivery, it makes a tougher competitive environment for small sellers.



Comments (7) | Permalink

Readers Comments

Perminate Link for Amazon Reacts to Reports of FedEx Price Slashing   Amazon Reacts to Reports of FedEx Price Slashing

by: mcposty This user has validated their user name.

Tue Jun 25 12:16:10 2019

Why certain large customers? Why not give all sellers the same cheap price, that will certainly fill up your planes.

Perminate Link for Amazon Reacts to Reports of FedEx Price Slashing   Amazon Reacts to Reports of FedEx Price Slashing

by: Whatever This user has validated their user name.

Tue Jun 25 14:59:33 2019

can't sell on Amazon (gated) so I don't shop on Amazon so I don't care and wish for an early demise for them

Perminate Link for Amazon Reacts to Reports of FedEx Price Slashing   Amazon Reacts to Reports of FedEx Price Slashing

by: angryllama This user has validated their user name.

Wed Jun 26 05:34:50 2019

WHO ARE all these crazies who think that COMMERCE was ever meant to be FAIR and IM-balanced in favor of SMALL CUSTOMERS?

SMALL CUSTOMERS  are often Very Low-Profit Margin Customers even though THEY pay "list price".
Why?  Because for MEGA-Companies LOSE MONEY on a SMALL "SALE" like shipping labels for UPS FedEx USPS.  Think Lousy Packaging, Improper Labeling/Addressing, Bogus Insurance Damage claims over a $4 item and tying up Counter employees with myriads of questions and vain attempts to get THAT customer's package to Aunt Becky in Cedar Rapids by Friday for $6.

Negotiated Service Discounts to Large Clients is the NORM for just about Any Industry, Any company providing a Service, and is one of the Linchpins of Free Enterprise.

Just for a moment think of SHIPPING LABEL cost for any given package as though it were a Brand New Current Model $26ki Car.   Would anyone NOT a knuckledhead ever expect that U.S. Federal Government, HERTZ or AVIS approaching Ford for a blanket FLEET DISCOUNT on 60,000 cars a year to pay what Joe Blow (Tire Kicker) with IFFY credit wanting to Punch Above His Weight Class to slide into the seat of his DreamCar Mustang GT?

Buy a Clue ....    or at least RENT one.    

Perminate Link for Amazon Reacts to Reports of FedEx Price Slashing   Amazon Reacts to Reports of FedEx Price Slashing

by: Moonwishes This user has validated their user name.
Web Site

Thu Jun 27 01:47:17 2019

I can't remember the details, but a story I read online yesterday mentioned that Fed-ex is having money trouble.

Perminate Link for Amazon Reacts to Reports of FedEx Price Slashing   Amazon Reacts to Reports of FedEx Price Slashing

by: Chicago48 This user has validated their user name.

Thu Jun 27 03:32:01 2019

Does anybody know how well Amazon Air is doing?

Perminate Link for Amazon Reacts to Reports of FedEx Price Slashing   Amazon Reacts to Reports of FedEx Price Slashing

by: Coolstraps This user has validated their user name.
Web Site

Thu Jun 27 06:48:07 2019

I think this is probably comparable to bulk wholesale pricing. It's a competitive strategy and if it works for them, that's great. Our task as sellers isn't to complain that they are competing successfully. Our task is to sell more so we can also take advantage of their reduced rates.

Perminate Link for Amazon Reacts to Reports of FedEx Price Slashing   Amazon Reacts to Reports of FedEx Price Slashing

This user has validated their user name. by: DeathFromAbove

Fri Jun 28 00:18:03 2019

Is it a coincidence that less than a week after USPS lowered their dimensional weight divisor, I get a call from a FedEx rep, offering me a greater discount?  No.

USPS effectively forfeited the mid-sized package business, and the private carriers smell blood in the water.  The strategy we can expect to see now is much like the traditional terrible cable company, Lure us all in at a low, low price to become dependent, then gradually raise the rate 5% annually.  Then no escape until there is another choice of carrier or a renewed discount.

USPS is going to reverse course on this - they don't have a choice - they just gave away revenue and profit for free.  What a terrible business decision.  We can only hope they move fast when they do, or they are going to be doomed.  Letters, crap express mail that no one uses, flat rate boxes, and 1st class parcels, and dinosaurs standing in retail lines to buy postage stamps and passports aren't going to save them.



Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.