There are a few strategic reasons why Amazon may be ready to enter the refrigerated shipping market.
Last week, Amazon.com Inc. announced its $13.7 billion bid for Whole Foods Market Inc. Whole Foods sells beer in more than 40 states (and Washington D.C.).
Amazon has been experimenting with alcohol delivery in Ohio and Washington, but beer still can’t be shipped legally in Washington. Beer can only be shipped in Arizona, Florida, Hawaii, Nebraska, New Hampshire, D.C., Delaware, Massachusetts, Montana, North Dakota, Ohio, Oregon, Vermont and Virginia, and only by someone licensed to do so. While we don’t doubt that Amazon could procure such a license, the United States Postal Service still wouldn’t ship it. That means shipping it with restrictions — and, likely, with a premium — through United Parcel Service Inc.
If Amazon were to launch its own delivery service – they could further dominate the online retail sector and home delivery business. Refrigerated deliveries would just be one piece of the puzzle. With a national fleet of delivery vehicles and options, Amazon could continue to reduce shipping fees, expedite shipping times and improve the customer experience. It seems to be a natural extension which would only have a positive upside. Sure, there would be capital investment costs – but in the long run, there are too many benefits for Amazon to ignore. We’ll stay tuned to see how this unfolds…