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Amazon Doesn’t Want to Take Over Delivery, Just Supplement It

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Amazon

Delivery companies breathed a sigh of relief Tuesday when Amazon chief Jeff Bezos said the online behemoth isn’t trying to compete with them.

Despite taking a series of steps over the past two years to gain more control over its transportation and shipping costs, including the acquisition of a French parcel delivery company and a British shipping service as well as leasing a fleet of Boeing planes, Amazon does not want to unseat FedEx or UPS.

Speaking at the Code Conference in Rancho Palos Verdes, California, hosted by technology website Recode, Bezos said the moves are preemptive and necessary for such peak selling seasons as gift-giving holidays, the Wall Street Journal reported.

The news was likely music to investors’ ears, too. While Amazon is said to retain 91 percent of first-year subscribers to its Prime service (which costs $99 per year and offers free one- or two-day shipping on most items, among other perks) and recent estimates have put the number of U.S. memberships at 54 million, fulfillment fees weigh heavy on the company’s coffers.

In fact, they cost Amazon $13.4 billion in the year ended Dec. 31, which in turn bruised the bottom line. As the Journal noted, continued investment in an area where it’s less likely to dominate—like last-mile delivery—could knock the now-profitable company back into the red.

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