Amazon to test its own delivery service

For online retailers, shipping is a challenge that many have yet to master. This can happen for several reasons, chief among them is that many of these organizations are run by professionals that have a passion for and experience selling their specific product to consumers and not the shipping aspect.

This arena is also one of the main drawbacks to the digital shopping experience. Consumers do not like the wait that they must endure once they have spent money on a product. Whether it is a large purchase or a small one, consumers need to wait for an order to be processed, packaged and sent out. Paying a substantial shipping charge only drops the wait time to a day or two.

It is because of this that many online retailers are looking for ways to improve their shipping strategies. In many cases, this means partnering with a third party logistics firm that can help solidify this much needed area of the business. For others, like Amazon, it means trying to create your own personal delivery service.

According to a recent article from The Wall Street Journal, Amazon is in the process of creating a the "Last Mile" delivery service which will be available in San Francisco, Los Angeles and New York. The company will supervise its only contractors driving trucks with the company's products. 

The goal for the company is to cut out the middleman for customers when they make a purchase from the website. Currently, orders are made through Amazon and deliveries are handled by specialists like the UPS, the United States Postal Service and FedEx.

This is also an attempt to create a same-day delivery service, which is widely considered the "holy grail" of the online retail market. With its own delivery service, the organization would be able to offer deliveries on its own time frame which could include nights and weekends. This would also be where the rumored drone delivery service would come into play, as it would be able to drop off smaller packages quickly to addresses that are within a specific distance of a distribution center.

"Amazon is growing at a faster speed than UPS and FedEx, who are responsible for shipping the majority of our packages," the posting from the company read. "At this rate Amazon cannot continue to rely solely on the solutions provided through traditional logistics providers. To do so will limit our growth, increase costs and impede innovation in delivery capabilities. Last Mile is the solution to this. It is a program which is going to revolutionize how shipments are delivered to millions of customers."

The reason Amazon is looking to go down this route is that a streamlined shipping system would result in a significant financial savings. According to the most recent quarterly report, shipping expenses rose 31 percent.

Most businesses do not have the ability to create their own shipping solutions. Creating a full logistical system has a number of challenges and a smarter course of action could be partnering with a business shipping solution provider that can handle the warehousing and delivery of products.