The United States Postal Service (USPS) has been in a death spiral for years. The converging forces of rapidly increasing digital communications (meaning less paper mail) and ballooning pension liabilities have created a Detroit in 2008-like situation where bankruptcy or a government bailout are the two most likely options.
Since governmental agencies can’t declare bankruptcy, you all know where this is headed. The USPS is already well on the way to becoming another cautionary tale about what happens when companies and organizations
But now there’s a potential white knight on the horizon, in the form of the world’s largest e-commerce powerhouse, representing the very forces that helped push the USPS towards their current situation. How did Amazon become the USPS’s potential savior? It’s a tale of a relentlessly innovative organization (Amazon) taking advantage of underutilized fixed assets somewhere else (USPS) to help meet their customer’s needs.
What can other businesses take away from this unlikely partnership?
Matching a need with a partner
Amazon knows that they’ll have a lot of packages to deliver this busy holiday season and as a customer-obsessed organization, they want to do whatever they can to get these delivered as quickly as possible. The USPS is closed on Sundays, and they would be on Saturday too if the Congress would only let them. Amazon is looking for extra delivery capacity, and that’s exactly what the USPS has with their nationwide network of offices, workers and delivery vehicles. The USPS is happy to make some money from their fixed assets on a day they’re normally closed and their workers will likely appreciate the extra hours going into the holidays. Most importantly for Amazon, their customers, many who get free shipping with the Prime memberships, now have more delivery options.
The union between the USPS and Amazon makes a lot of sense when you look at Amazon’s needs and the USPS’s established delivery capabilities. But, Amazon already ships millions of packages a year with commercial partners FedEx and UPS. Why turn to a dying governmental agency to expand their capacity? Well, FedEx will deliver on Sunday, but it’ll cost you. That’s not going to work for a company that builds loyalty by providing free shipping to many of their customers. Rather than pay a premium, Amazon was able to hook up with a USPS desperate for commercial relevance at more reasonable rates.
So, do I want to be Amazon or the USPS in this equation?
A good partnership offers benefits for both sides. It’s all about matching capabilities with needs.
- Do you run a restaurant or café that’s closed on the nights or weekends? There’s probably an aspiring chef in your area that’s looking for space to work after hours and could help your business generate some additional revenue from your existing assets.
- Maybe you’re selling products online but don’t have a local distribution network? Could you partner with a local retailer to serve as a pick up spot in exchange for the extra traffic you’ll direct their way?
Amazon might have led the way in forging this partnership, but both sides are likely to benefit from this novel pairing.
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