Case Study Fed Ex

Topics: Electronic commerce, Online shopping, Amazon.com Pages: 3 (2050 words) Published: October 29, 2014
FedEx Changes for Ecommerce Kyle Ryan University of Nebraska Omaha Abstract The objective of this case study is to identify the key challenges that Amazon will face in regards to FedExs new dimensional pricing scheme, and provide recommendations on how the company should handle the changes in delivery costs with their customers. Separate shipping options will be discussed as well, so that Amazon can have alternatives to shipping with FedEx if the same type of problem occurs in the future. The case will also provide examples of two separate online retailers that will be affected by FedExs new shipping guidelines, and how it will impact their business as well. FedEx Changes for Ecommerce In todays society convenience is a key factor in most decisions for consumers. This is why online shopping has become increasingly popular over the past decade consumers enjoy being able to satisfy their needs with a click of a button. What do consumers dislike about online shopping The answer is simple, shipping fees. Most consumers will do anything they can to find a loophole around a large shipping fee. Online retailers such as Amazon have been able to offer affordable shipping on a most of their orders, and this is one of the biggest catalysts for the companys growth since its inception. Now Amazon is facing a huge obstacle, one of their biggest shipping partners, FedEx, is going to be changing their pricing scheme that will result in drastic increases in shipping prices. All ground packages are going to price on a size basis, and this means an increase of more than 33 of the companies ground shipments in the US over the next year (Stevens, 2014). Now the big question for Amazon is who is eventually going to end up paying for these additional costs, the company or its customers. Key Challenges Outsourcing Shipping Strong business relationships are essential for success in almost every industry in the business world. When companies have the ability to form strong ties...
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