FedEx Supply Chain, a third-party logistics provider operated by FedEx Corp., announced the launch of FedEx Fulfillment, a multi-channel e-commerce fulfillment and inventory management platform aimed at small and medium-sized businesses.
Businesses using the platform will be able to store their products at FedEx warehouses in the U.S. and Canada, and as items are ordered from their retail locations, websites and other online marketplaces, FedEx will package and ship them to customers in boxes that feature the seller’s branding and logo.
FedEx has already tested the concept with some business customers, and is making adjustments at about 130 warehouses throughout the U.S. and Canada to enable them to store third-party inventory.
As with several logistic innovations in recent years, Amazon beat FedEx and everybody else to the punch with this one, and its move has paid off big-time. However, that first-mover status now matters less, and here’s something that matters more: FedEx Supply Chain is a dedicated logistics company (actually, it was once Genco, which FedEx acquired in 2014). It’s not a retailer, and doesn’t sell any products that compete with the businesses to whom it would provide fulfillment services. Amazon can’t say that.
Any independent seller of any size that has a fulfillment deal with Amazon at some point had to ask itself this question: Did it want to make a deal with the devil? For sellers too small to have their own adequate fulfillment capabilities, it was a question with only one possible answer, entailed with long-term risk: Yes.
Such merchants have needed to get a boost from Amazon if they wanted to get a leg up in the e-commerce business. With FedEx Fulfillment, they may no longer feel captive to Amazon's marketplace and fulfillment capabilities. That could allow them to get into more online marketplaces, while also making shipping offers and guarantees to their customers that are only possible when working with one of the world's most pervasive logistics firms.
Of course, FedEx still needs to ensure that its service is affordable in order for it to succeed with small and medium-sized businesses, and FedEx still needs to make this service make sense for itself on an operational and financial level. The latter is no easy feat, as Amazon itself could tell FedEx, as the e-commerce giant recently has faced challenges juggling inventory space for its marketplace partners. Maybe those challenges make it the best possible time for FedEx to offer another option.