The 2020 Mid-Year Economic Update_long

Can Amazon ‘Uber’ Distributors?

Online company continues bringing chaos to traditional commerce.
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Whether or not Amazon succeeds with its plan to bring an Uber-like experience to package delivery – wherein customers hire a private driver to bring them whatever knickknacks they need right away – the company continues to disrupt the business status quo.

According to numerous sources, the company is considering a crowdsourced delivery system where people will sign up to make deliveries the same way they sign up to shuttle passengers through Uber or Lyft. Customers can use an app to have a driver bring them a package from an Amazon distribution center to their house the same day.

Although it is designed for the business-to-consumer market, the model could potentially work for the company's newly formed Amazon Business, which recently replaced the now-defunct AmazonSupply. And that means it could threaten cargo companies and distributors the same way Uber and Lyft have taken market share from taxicab operators.

Too many questions remain for distributors or package delivery companies to worry yet, including the willingness of customers to choose this option for their goods and the potential cost of insuring private drivers.

But Amazon continues to create chaos in the traditional business model, just as it did with company founder Jeff Bezos' claims of bringing drone delivery to homes. FedEx CEO Fred Smith called delivery drones "amusing" during an earnings call in late 2013, yet the shipping giant is actually researching the technology.

The idea reminded me of something I heard at United Stationers' (now Essendant) show for suppliers and distributors in February when author Jeremy Gutsche spoke about the need for businesses to "avoid the traps of a farmer, who is 'complacent, repetitive and protective,'" and instead pursue the instincts of a hunter, who is "insatiable, curious and willing to destroy."

Examples of companies that did this and, in the process, put a competitor out of business or cut into their market share are Netflix (Blockbuster) and Uber (taxi companies). Another was Amazon (Borders).

"Opposing the mainstream fuels success," Gutsche said. "And chaos creates predictable opportunity."

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