Cost is only part of the equation. For Amazon customer service is a primary driver. UPS and FedEx both have terrible customer service reputations. USPS isn&#x27;t any better.<p>By setting up their own distribution networks they control the entire chain from first click to final delivery, and to Amazon that is equally important as cost.<p>It also allows them innovate in an area that is sorely lacking innovation, all under their control.<p>This is the lesson of the new economy. You have to control all contact points with the customer. If you don&#x27;t, you are letting a third party &quot;sell&quot; your brand which never works in your interest.