Why is Amazon all of a sudden not re-investing all its profits?
I find it very interesting to know what Amazon's competitive advantage would be from having their own logistics business.<p>1) Shipping is the definition of a commoditized business. Unlike AWS, for example, they will not be pioneering a new business model or technology.<p>2) What they pay right now to FedEx, UPS, USPS, DHL, OnTrac, etc. should be very close to zero margin, given their position to negotiate those companies against each other in real time. Surely, the margin should be comparable to the cost of capital.<p>3) Amazon seems to represent less than 10% of packages in the US [1]. Given that they have to cover more or less the same area as other shipping companies have, they will not have the economies of scale of other firms, so their cost per shipment may end up higher.<p><a href="https://www.quora.com/Shipping-What-percentage-of-UPS-shipments-are-Amazon-boxes-packages" rel="nofollow">https://www.quora.com/Shipping-What-percentage-of-UPS-shipme...</a>