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Amazon’s Logistics Fund, Prime Expansion Latest Efforts to Edge Rivals

Amazon.com Inc. is turning up the heat on UPS and FedEx, with its latest moves this week to invest $1 billion into new supply chain technologies as it expands its Prime delivery program to companies outside its marketplace.

The company said Thursday it established the Amazon Industrial Innovation Fund (AIIF) to invest $1 billion into new technologies in the fulfillment, logistics and supply chain space. The first handful of companies AIIF invested in focused on robotics and safety technologies for warehouses.

Those companies include wearable safety tech maker Modjoul and inventory management system developer Vimaan, along with robotics companies Agility Robotics, BionicHIVE and Mantis Robotics.

“We see an opportunity to look beyond our own experience and empower companies that are developing emerging technologies in customer fulfillment operations, logistics and the supply chain,” Amazon vice president of Worldwide Corporate Development Alex Ceballos Encarnacion said in a post announcing AIIF. “We know there are companies out there that share our curiosity and excitement to invent. Whether our investment helps them grow or leads them to work with Amazon, or both, we’re excited to help advance these technologies as online shopping becomes even more important to people who are looking for more convenience and time savings.”

Amazon said AIIF’s investments would target companies at all stages of development, from early to mature, and investments would vary by company. Amazon also said it does not have a target number of companies it intends to invest in with the fund.

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“These industries are inherently complex,” Ceballos went on to say. “With our scale, Amazon is committed to investing in companies that will ignite innovation in emerging technologies that can help improve employee experiences and safety while seamlessly coexisting with workforces across the supply chain, logistics and other industries.”

The company’s cloud platform, Amazon Web Services Inc. (AWS), said in a separate announcement Wednesday it is funneling $30 million into startups headed by Black, Latino, LGBTQIA+ and women founders. The investments are being made through a new program called the AWS Impact Accelerator and will offer companies $225,000 worth of cash and AWS credits, along with access to mentors and networking.

AIIF’s reveal comes a day after Amazon said it will expand its Prime program to shoppers of companies outside of its online marketplace, broadening the e-tailer’s fulfillment and logistics services to third parties and now further ramping competition with parcel carriers such as FedEx and UPS.

The program, called Buy with Prime, allows Prime members to shop from other companies’ sites, while receiving the same free delivery, free returns and other offerings associated with the Prime program through Amazon.com.

Buy with Prime is currently being offered to Prime members by invite only and will also only be available to companies who use Fulfillment by Amazon and are invited into the new program.

Fulfillment by Amazon is the company’s e-commerce logistics services arm. It offers sellers in its online shop fulfillment, order tracking, delivery and inventory storage. Fulfillment pricing starts at $3.99 per unit. Storage pricing starts at 83 cents per cubic foot.

Last week the company confirmed sellers using Fulfillment by Amazon would see a 5 percent surcharge added to existing rates in response to inflation and rising fuel costs, which equates to 24 cents per unit.

The number of Buy with Prime program participants will continue to expand throughout the year and the pool of participating sellers will also later include those not currently selling on Amazon or using the company’s fulfillment services.

“Allowing merchants to offer Prime shopping benefits on their own direct-to-consumer online stores is an exciting next step in our mission to help merchants of all sizes grow their business—whether on Amazon or beyond,” Amazon vice president of Buy with Prime Peter Larsen said in a statement.

The company said sellers using the service on their own online shops will be charged on a per unit basis, calculated based on a service, payment process and fulfillment storage fee.

Amazon currently counts more than 200 million Prime members globally.

In other company news, Amazon also said this week it is set to have its operations working fully off of renewable energy by 2025, which would make it five years early to hitting a goal it originally set for 2030.

The company said it has begun 37 renewable energy projects, including 23 in the U.S., five in Spain, one in France and eight in the United Arab Emirates. The projects range from solar wind farms to rooftop solar installations.

Bloomberg New Energy Finance reported earlier this year Amazon was 2021’s largest buyer of clean power, topping a list that also included Microsoft and Meta.