Amazon is proving there are pros and cons to being its own best customer

Amazon’s logistics unit has made the company indispensable this holiday season, but AWS outages could ruin the fun.

Amazon loves creating products, then being its own first and best customer. This holiday season is proving that strategy can be a gift and a curse.

Take 2 products where Amazon employs this strategy: Amazon Logistics and Amazon Web Services (AWS).

Amazon Logistics has made the company indispensable for holiday shopping

While many retailers have been in crisis mode due to global supply chain issues, Amazon’s integrated logistics and delivery network has left the company relatively unscathed.

That’s due in part to the company’s transportation investments since 2013, which include growing its delivery fleet to:

  • 400k delivery drivers
  • 40k semis and 30k vans
  • 70+ planes

It also includes Amazon’s investments in freight forwarding, which means playing a middleman role in the trans-Pacific supply chain, such as buying guaranteed space on cargo ships years in advance.

These investments are paying huge dividends now — helping Amazon avoid chaos at the ports, and allowing the firm to offer 3rd-party merchants space at ⅓ the price of other freight forwarders.

On the other hand, there’s AWS…

… which suffered a widespread outage on Tuesday. The outage impacted everyone from individual consumers to tech’s biggest players (e.g., Netflix, Spotify, and Zoom). But the company hit the hardest? Amazon itself.

  • The outage impacted Amazon’s routing software, leaving delivery drivers unable to deliver packages for the day
  • It also caused Amazon’s ecommerce site to experience glitches and slow loading times during prime holiday shopping hours

The outage has since been resolved…

… but it likely won’t be the last. In the last 12 months, Amazon has experienced 27 outages across its services.

The biggest victims of the outage may be Amazon’s delivery drivers, who — already dealing with a 36-hour package backlog at fulfillment centers — now have to make up for lost time.

In other words, for Amazon Logistics to live up to its billing as a Christmas miracle, it may have to overcome its own version of the Grinch.

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