Home delivery: the last mile belongs to the delivery giants

As startups attempt to master home delivery services, the last mile still belongs to the titans

The business models of those players vary, with Amazon drawing on its own extensive inventory, and most of the others obtaining product from existing retailers. What they have in common is some form of expedited or same-day service, to feed consumers’ growing appetite for immediate gratification.

All face the same tough question: Can they make a profit? Same-day delivery is brutally expensive to provide, if you don’t have an infrastructure already in place. It’s one thing for FedEx or UPS to deploy an existing network to offer a premium service – quite another for a newcomer to pay for the vehicles and drivers to match it. Especially if the service isn’t tacking on a high delivery charge to cover its costs.

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